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HomeMy WebLinkAboutDenali Commission Program & Policy Review 2007Denali Commission Program and Policy Review Prepared for: THE DENALI COMMISSION and BUREAU OF PUBLIC DEBT Prepared by: FMcDowell G R O U P Juneau * Anchorage * Kodiak August 2007 Table of Contents Section 1: EXECUVE SUMMA ciice.ccsescsetsceetecesecsuccestecctseissessestesssniessessevessvevss 1 -1- Purpose of the: ReViCW smacaanes anima de ricerca erences en emer eee 1 2 M@thOGOIOGY <.. 2... <5 eccteccaenee tose neecetere ceeesnsaneeeeteseatetseestontstssereessaesnturesetntetseeseennesceits 2 1.3 Denali Commission PUrPOSE............cccccccccceesssseeceessseeeeeececsessseeeeeeceeneeeecetseeeeeeeetetseees® 2 1.4 Principle Findings sis sess ssvssecs oss care supe awwes voneseus seavonsene uns eesveeceensens cuss vanes vers uaus scaseenes socesorens 3 1.5 Recommendations Section 2: Purpose of the Program and Policy Review..........:::ccssssssseseee 13 Section 3: Methodol OGY sisvccsscosecccssveciscecevesesevvsscoccoccccucsccssvecscerensesevsevssvecswance 14 3:1 Team: COmpoSition sere. ccscseas sess arms sovs sens sues enta oasee cus pees wea ta reams anes amen anes neesustaauee pasenenmte woes 14 SiZHRESCALCH MASKS oh htctalsstitateterelsssteasme cave Wmresemetisteetatataleleeitettstaleeeeiamialsiletebehclsp se saumhaen seayemaens ase 5 14 3.3) Allocation: Of EttOmts sc. ces.ccssessee tases cece igdevene cv cg Sadevvara do avosae see ssten se sesveeeueee oseesdes eecesees 20 Sr4eDeSRNINOM Ol) CIS fs serc cece ese cree eee ees ee ee oe cee ee eo 20 Section 4: Overview of the Denali CommMisSiOn .................ceeeeeseeeeeeeeeeeeeeee 24 “1 MISSION ANG GOANS soc cars ce cece seer ccs woe secs ou scares Fores sereares sense roses saeoerons aneacsees susscera eas seoees esse 24 DSU CLUE ere aac Sled cred strc tts one aostemer etaomcrcs antea ete pee amen ene vera terac stairs anima stot wom ieee een semerneec anes 27 A SOPOT ALIOMS sade bee decer core ttle een ckiclesouetcataed depeeueuadeberueyauel: ennevotens sci Menideeloeserlotehsvarsegeneldeleerions 29 Section 5: Synthesis Of FINdINGS ......... cee cece eeeeseeeeeeeeeeeeeeseeeeeeseeeeeeeneeee 31 5.1 Program Environment ........0..ccccccccceesseceseceesseeeesseeceeeeseseeeesesseeesesseeseseesesseesenseesenseees 31 52s POG Mea ae OD) CCU CS xcs eres ea occ eee eee ee 32 5-Siimpacts of Programs ss: seseess- ee sence sone cant oeneeurnsccracatn cares seen sce sues oss dae ous tes snes reset es 37 5.4 Effects of Policies................ssccccsssssecessssssssersestecceceneeeensestensceonsssesecsoneceeersensesersnnseneeees 57 Section 6: Program-by-Program ReVieW ........ccccceeeeeesseeeeeesessseetensseeeneeees 71 61 EN OGY isresesesneemmnenn erneeares eee aes oe ES ee ee ES eS “A 6.2 Health (Including Health Facilities, Elder Housing and Domestic Violence)............... 90 GS FAN MMING ce vlat cotaet scans crate apc w ot eta x eee eel od in does acc gee cadences oes sen nce setcl easly anetebet gente ssescues 108 6.4 Economic Development .............ccccccceeeeeseeesceeeeeeseeeenseeeecesseeeeecsseeeeeeceeeeeiseeeeteeeeeeeeea 119 6/5 MOAGCHESN FOUSING 1. .e. ened ence lnc letey stdin ansalernmehauerspuabeneielseaneenebunciedgineksnannsrileeailee sossu cases 125 6.6 Transportation 6.7 Other Programs (Multi-use Facilities, Washeterias, Solid Waste)... 131 6:8 Government Coordination. ..... io. cccsscessenessasseacmes seeeatsteeoncrseanetancenemesepmotateseman talnnsecinade 141 Section 7: Bibliography .............ceeceeeeeseeeseeeseeeeeeeeeeseeeesseeeeessseeeeeessneeeeeeeesas 149 PPDEMGICES .1.....1s0reentocscrensedesreseuenatesenesassenscsadesensesaeveendcacssiseesdenentnncsnoseesnacsics 151 Appendix 1 — List of Interviews Appendix 2 — Site Visit Reports Appendix 3 — Scope of Work ii SECTION 1: EXECUTIVE SUMMARY 1.1 Purpose of the Review The purpose of this program and policy review is to provide an independent analysis of the performance impacts and outcomes of Denali Commission programs and policies as of the end of calendar year 2006. Since 1998, the Denali Commission has funded 1,600 projects in more than 200 communities throughout Alaska with more than half a billion dollars in total funding. Denali Commission programs include: » Energy * Elder Housing * Health * Teacher Housing * Training * Domestic Violence * Multi-use Facilities * Economic Development * Washeterias * Transportation * Solid Waste * Government Coordination Energy, Health and Training represent the largest investments (80 percent of total Commission funding) and the most extensive operating records. The remaining programs were either designated to the Commission by Congress or represent “emerging” programs, the potential of which is still being explored. Transportation, Government Coordination, and, to an extent, Economic Development fall into the last category. This review also examines the impacts of seven Commission policies. These include: * Sustainability * Private Enterprise * Cost Containment * Open Door * Investment * Business Planning * Community Planning Descriptions of the programs and policies may be found in the body of the report. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 1 1.2 Methodology Major tasks for the review included the following: * Semi-structured interviews with current and former commissioners and _ staff, representatives of major program partners and funding partners, and other key informants * Confidential, structured interviews with residents of 53 affected communities (91 interviews with residents with knowledge of local Denali Commission funded projects) «A telephone survey of 250 past participants in Denali Training Fund trainings to measure the effect of training programs on trainees’ ability to find work * Site visits and in-person interviews with key informants in nine communities in four regions of Alaska: ¢ Nome/Golovin * Kodiak/Port Lions * Bethel /Kwethluk and Napaskiak * Klawock/Craig on Prince of Wales Island = Secondary research including a variety of documents related to the Commission, including Commission Annual Reports and strategic planning documents, commercial publications, government reports, a sampling of grant documents and other Commission files, and other literature by and about the Commission. Extensive use was also made of the Denali Commission on-line project database. 1.3 Denali Commission Purpose The Denali Commission Act of 1998 defines the organization’s purposes as follows: * 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, water and sewer systems and other infrastructure needs. The Commission’s mission statement identifies collaboration as a means to accomplish the purposes in the Act: 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. The Commission has also developed a vision statement and various principles, goals, policies, and other statements of its intent. These are described and discussed in the body of the report. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 2 1.4 Principle Findings = The Commission has facilitated and funded an impressive number of essential infrastructure projects in rural Alaska. The legacy programs in particular have been well-conceived and effective. » The Commission is widely viewed as an effective and necessary organization. = In terms of performance measures, the Commission’s focus has been on outputs rather than outcomes or impacts. * The Commission’s policies are appropriate in concept, but unclear in practice. Overview of Program Accomplishments * The Denali Commission has been effective at establishing a substantial quantity of badly needed infrastructure in rural Alaska and is widely regarded as essential for that purpose. For example, Commission-funded projects include: * 160 completed energy projects * 100 completed health projects * 100 other completed infrastructure projects ¢ Employment training for more than 2,000 Alaskans * The work of the Denali Commission has resulted in improved access to healthcare for rural Alaskans, greater environmental safeguards around fuel storage, more efficient power generation, and a better-trained workforce than would have been the case in the absence of the Commission. * A wide variety of tribal, non-profit and other service organizations around Alaska are stronger and more effective as a result of receiving Commission grants and of partnering with the Commission in carrying out its programs External Perceptions of Commission Programs and Policies * Leaders in most communities believe critical, local projects would not have been accomplished without the Denali Commission. The 200-plus community representatives and rural experts interviewed were nearly unanimous in saying the Commission fills a unique need and has a central role to play in the future well-being of rural Alaska. * The Commission's role as an innovator and catalyst of rural development is highly valued by members of other agencies and by residents of affected communities. * Community leaders consider the Commission more flexible and responsive than other agencies. At the same time, many community leaders say the Commission’s process should be less prescriptive with more local participation. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 3 = The concept of “sustainability” has become a keystone of Denali Commission programs and has, in principle, widespread support. However, there is frustration and confusion over what sustainability means and how it is to be achieved. "Neither the Commission nor any other agency systematically evaluates the cumulative demands placed on a community by multiple projects, including those funded by the Denali Commission and those funded by other agencies. There is concern that those demands could exceed the financial capacity of a significant number of communities. "There is concern about whether the scale of some projects is appropriate. Site visits and interviews in communities suggest there has been and is potential for infrastructure projects to be designed at a size and level of sophistication that exceed a community’s needs and/or its ability to support the infrastructure. * The Commission’s process of implementing projects through program partners has significantly strengthened the base of technical knowledge and operating capacity represented by those organizations. However, there is some concern the Commission can’t ensure that the goals and priorities of its partner organizations are consistently aligned with those of communities or the Commission. While grant agreements and other documentation often address common goals, goals are not consistent for all partners and are typically confined to the construction process. * Most community residents and many local leaders are unaware, for a given project, of what the Commission’s role was. The Commission's partner organizations have become the public “face” of most projects. Further, many small villages depend on one or two individuals, or on someone from a borough, housing authority, health provider or other organization, to represent the village with respect to Denali Commission projects. * The Denali Commission's “distressed/non-distressed” criteria are widely perceived as arbitrary and overly restrictive, even by Commission staff. This is particularly true when the criteria are applied outside their originally intended purpose, which was to indicate a community’s ability to contribute matching funds to a healthcare project. There is also concern that the criteria are used, inappropriately, to prioritize projects for active processing by the Commission. Further, the designation alone is not a reliable basis for tracking incremental progress or lack thereof in communities. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 4 Review of Program Impacts Performance Measures * The Commission's current performance measures track “outputs,” that is, the number and status of funded projects. Such measures are useful for evaluating progress relative to the Commission's statutory purpose of providing for infrastructure needs. * The Commission’s output performance indicators do not reflect the impact or “outcome” of the Commission's programs and policies on the sustainability of projects or the wellbeing of communities. With the exception of the Training Program, the Commission has not identified outcome performance measures. * Beyond an accounting of the number of projects completed in each program area, there is little quantitative data available to measure the Commission's contribution to a community's economic diversity, sustainability or self-sufficiency. This is due to: ¢ Lack of meaningful local-level socioeconomic or other indicators of community wellbeing. In Alaska, most ongoing data collection and publication is at the census area level. The decennial US Census provides some detailed community and village level information, however, that information is timely for a short period only and in any case provides no useful trend data for evaluating programs that have been in place for only a few years. * Local economic and socioeconomic conditions that may be affected by Denali Commission projects are typically subject to a range of forces unrelated to — and beyond the control of — the Denali Commission. * Although it engages regularly in discussions with regional organizations and other agencies, the Commission has not adopted a strategic framework that defines the changes it is attempting to achieve at the community or regional level, either within each program or collectively across all programs. Neither has the Commission articulated how it expects its role to be complemented by the roles of other agencies. "The Denali Commission’s major programs and numerous sub-programs are too loosely coordinated with one another for a third party to assess their combined effect. This heterogeneity is largely the result of congressionally directed funding, rather than strategic choices by the Commission. * Information about the Commission and its programs that is readily available to the public, either in the Commission's project database or in other easy-to-find documents, is not sufficient for a third party to understand the effects of most projects. The Commission is actively engaged in updating the database structure to make it more comprehensive and easier for all stakeholders to use, including grant recipients. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 5 Energy Program The Energy Program is one of the Commission’s three largest programs (known as the “legacy” programs). It funds primarily bulk-fuel storage and power generation projects. The program also funds power distribution systems and some alternative /renewable-energy projects. * As a result of Denali Commission grants, 61 bulk fuel facilities are now in compliance with Coast Guard and other regulations. Another 48 are in the process of being made compliant. * Many of the 36 rural power system upgrades completed by the Commission have resulted in cost savings through improved efficiency and heat recapture. * Rural residents benefit from more reliable heat, power and other critical services, as well as better access to fuel, as a result of Commission projects. Health Program The major (legacy) component of the Health Program funds primary care clinics, both upgrades and new construction. Other funding components developed over time include behavioral health facilities, domestic violence facilities, elder housing, primary care in hospitals (primarily funds for new equipment), emergency medical services, and hospital design. * The Commission has funded primary healthcare facilities in 84 communities. Facilities are under construction in another 34 communities and planning / design is underway in 59 additional communities. * Commission-funded clinics are providing the foundation for new, more efficient and effective rural service strategies by regional and other healthcare providers. Regional provider statistics show more local patient visits and more preventative procedures, as well as new kinds of service, after Commission-funded clinics are built. Some healthcare providers estimate significant savings in patient transportation costs. * Residents in communities where new clinics have been built or renovated say they now have access to better emergency care. They also highly value the increased privacy and new services made possible by the clinics. * No data is available that correlates changes in rural public health with Commission projects. Health Sub-Programs * Elder housing projects are too new to show impacts on residents or communities. However, residents perceive these projects to be key to community and family stability. These projects also help keep elder-care funds and retiree income circulating in the community. * Domestic violence program grants have improved the safety and functionality of shelters, based on anecdotal information. There is no data available on the client impacts of these grants. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 6 Training Program The third legacy program, the Training Program, provides job training and other economic development services in rural communities, particularly communities that meet the Commission’s “distressed” criteria. Training is coordinated through the Alaska Department of Labor and Workforce Development (DOLWD), with training provided by a variety of partner organizations. * Based on DOLWD data, Commission training grants correlate with increases in employment and income for trainees, and those increases persist in subsequent years. * Survey research conducted for this study indicates Denali Commission-funded training programs have increased the employability of trainees. More than 2,000 people had received Commission-funded training by March of 2006. Based on the results of a random-sample survey, 70 percent of trainees who were not employed at the time of the training found work immediately after the training. Two-thirds (64 percent) of those who found work said they would not have been able to get that job without the training. * Trainees report greater confidence in themselves and stronger communities overall as a result of Commission funded training. Economic Development Program The Commission has funded a broad range of economic development projects, primarily through the Alaska Department of Commerce, Community & Economic Development (DCCED). Sub-programs include DCCED’s Mini-Grant Program, a community mapping program, and business lending (through Alaska Growth Capital), as well as various marketing initiatives, and economic development conferences organized by the Alaska Federation of Natives and others. » Past and ongoing evaluation efforts for Economic Development sub-programs demonstrate positive impacts in many cases, but ones that are difficult to generalize. Teacher Housing Program The Teacher Housing Program was congressionally designated in 2004 and funds upgrades and new construction based on priorities developed from a statewide survey of school districts. * Reductions in teacher turnover correlate with Denali Commission grants that have improved the quality of housing for teachers in very small communities. "Districts and teachers believe better teacher housing is critical to teacher retention and therefore to the quality of education in rural Alaska. At this time there is no data correlating improved teacher housing with student performance. Washeteria and Multi-use Facility Programs Both these congressionally designated programs provide funding for facilities considered important by many rural residents. In some communities the local washeteria is the only access to potable water and laundry facilities. = Washeteria and multi-use facilities funded by the Commission have met high- priority community needs. However, measurable public health and other benefits to the community are difficult to identify. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 7 * The financial performance of these facilities after completion is not monitored, and community interviews indicate that some are not likely to be fully self- supporting. Solid Waste Program The Solid Waste Program funds improvements to solid waste handling in communities where existing conditions threaten drinking water supplies. * Residents report cleaner communities and improved operator safety resulting from Solid Waste Program grants. However, there is no data correlating solid- waste projects with water quality or local health. Transportation Program The Transportation Program was funded by an act of Congress in 2005. It has two primary elements: roads and waterfront development. The Transportation Program funds smaller projects that typically are not part of the State Transportation Improvement Plan (STIP). * There is broad support for the “gap-filling” strategy of this program and the advisory committee concept specified in the establishing legislation. Government Coordination The Denali Commission’s government coordination efforts encompass a variety of activities from convening meetings to facilitating workgroups around topics relevant to other Commission programs. In the past, these efforts have lacked elements of structure normally associated with a “program” in that no explicit goals or budget allocations were adopted. The program is currently being modified and revitalized. =» Program and funding partners report better agency coordination and more innovative approaches as a result of the Commission’s work. * Regional and local organizations report they have been strengthened by their relationships with the Commission. Review of Commission Policies General Comments As a whole, the Commission’s completed projects do not represent the impact of consistently applied policies. Policies emerged and have been adapted within programs to meet complex and disparate situations, rather than to reflect a fully formed strategy. Many projects pre- date policy requirements. Inconsistent and confusing language and formats make the policies difficult to interpret and challenging to apply. The Commission has not attempted to track compliance of funded projects with its policies beyond the construction phase. There is little post-construction monitoring to confirm that projects are proving sustainable or are being operated in a way that is consistent with the Open Door and Private Enterprise policies, for example. Denali Commission Program and Policy Review McDowell Group, Inc. + Page & = The Commission's stated “vision, na“ nw, y yo“ mission,” “policies,” “principles,” “values,” and “goals,” are so complex as to be more of an obstacle than an aid to understanding what the Commission is trying to do and the extent to which it has succeeded. The Commission’s various memoranda of agreement, along with other official documents, including planning documents, are similarly difficult to interpret, in part because concepts such as “sustainability” are presented in multiple contexts and with varying modifiers and implications. Sustainability The concept of infrastructure-project sustainability is widely supported by communities, funding partners, and program partners. However, Commission documents give limited direction on how to apply the policy. Based on application documents and interviews with program managers and partners, project sustainability as a concept is an important factor in the Commission’s infrastructure project selection. Prior to grant award, community and business planning requirements, community and regional support, appropriate project partner selection, and other factors are used to assess project sustainability. Program managers generally have neither the tools nor the resources to address concerns about sustainability should they arise after projects are constructed,. With the exception of 20 business-plan reviews commissioned by the Alaska Energy Authority, limited effort has been made to determine if funded projects have proven to be sustainable after completion. Including “renewal and replacement” costs in the definition of project sustainability is perceived as unrealistic for some communities. Application of the Sustainability Policy to infrastructure projects is confused by many with the much broader and ill-defined goals of rural sustainability or rural economic self-sufficiency, as discussed in some Commission documents. Investment The Investment and Sustainability Polices overlap. The Investment Policy appears, at its core, to be a policy of project sustainability, for example, “The Commission will promote investment in infrastructure where the promise of sustainability can reasonably be demonstrated...” The Investment Policy does not address the heart of most investment issues, the relationship between risk and return. Program managers use the policy as a check-list to help identify potential project problems. However, the relative importance of the ten criteria in the Investment Policy is not defined and neither are cumulative thresholds to help differentiate projects that are desirable from those that are not. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 9 Business and Community Planning The concept of promoting business and community planning has widespread support. However, the quality of plans is difficult to assure or confirm, in part because many communities depend on partners or consultants to prepare the plans. With a few exceptions, neither the Commission nor its partners systematically monitors the performance of the plans over time. Most projects pre-date the community plan requirement, which was adopted in 2005. Open Door and Private Enterprise The Open Door Policy is designed to assure that Commission-funded infrastructure is available to all Alaskans. It was created for health projects, but occasionally has been applied in other programs, for example Multi-use Facilities. Open Door has been an issue in only a small number of projects. The Private Enterprise Policy is appropriate in its intent but is vaguely defined. The policy offers little structured guidance or predictable constraint on investment in those areas of rural Alaska where private enterprise is at work. There has been little effort to determine if funded projects have been compliant with the policy post-construction. Once a project is built, the Commission has little control over program partners who may not have the same interest in avoiding competition with private enterprise. Cost Containment The promotion of cost-control techniques is perceived as appropriate by program partners. However, program staff question the usefulness of some Commission benchmarks. Detailed audits would be necessary to assess the degree to which cost control measures affect individual projects. Program partners report that project costs can be substantially affected by the timeliness, or lack thereof, of grant disbursements. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 10 1.5 Recommendations N Refine the mission and goals so that the Commission’s priorities are clear to staff, Commissioners, and the public. The mission of the Denali Commission is too broad and its principles and policies too complex for consistent interpretation or assessment. The Commission may choose to refocus on building infrastructure, or to pursue a broader mission of rural development. In either case, the mission should articulate the areas where the Commission intends to have measurable impact. Refining the mission may require discussion with other stakeholders. The new mission and goals should relieve the Commission of the perception that its program success is directly linked to the sustainability or self-reliance of rural Alaska communities. The issues affecting the long-term sustainability of rural Alaska are complex and diverse. The Commission lacks “the resources and the authority to address this issue other than as part of a larger, as yet undefined, strategy. The Commission must clarify internally, but especially externally, what it will be held accountable for and what will fall to other entities. For example, the Commission can play only a small role in the “effectiveness and efficiency of government services.” If the Commission adopts government efficiency as a goal, the mission should identify what the Commission’s contribution to efficiency will be. Similarly, the Commission may train workers, but it cannot ensure they will be “employed in a diversified and sustainable economy.” What workforce challenges will the Commission tackle? Develop a system, possibly in conjunction with other agencies, for tracking and assessing the aggregated impacts of multiple infrastructure projects on communities and regions. This includes the financial impacts on local governments and residents of meeting sustainability requirements for what is typically an increasing number and range of projects. In addition, if sustainability continues to be a core objective for Commission projects, take steps to bring the concept more fully into the public arena in order to develop a broader understanding of its implications as practiced by the Denali Commission, the State of Alaska, and others. Promote discussion and analysis of how sustainable projects are related to each other and to local and regional social-economies. If sustainability remains a core objective for Commission projects, establish a more effective system for monitoring projects after construction and for intervening or arranging assistance, when project sustainability appears threatened. If, on the other hand, the Commission chooses to focus purely on project planning and construction phases, then another entity or entities will need to accept the task of monitoring facility operations and management if sustainability is to be ensured. To get the most benefit from Commission investments, initiate bi-annual program evaluations that assess performance program-by-program, and as a whole, toward better-defined goals. Identify indicators and require program partners to collect and report needed data regularly. Define more specifically the process by which communities, partners and _ the Commission reach a common understanding of the priority, scale, timing, and potential impacts of projects. The process should ensure that the expectations of all parties — not simply those of the Commission — are clear. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 11 6. Reconsider the purpose and language of Denali Commission policies. Though its purpose and application are currently confusing, the Investment Policy addresses many of the Commission’s strategic priorities. Consider reformulating the Investment Policy as the primary project evaluation tool and develop project assessment measures defined narrowly for that policy. Sustainability, Open Door, Private Enterprise, and Cost Containment might be best used and described as principles or translated into criteria that are specific to the individual programs for which those criteria are relevant. 7. Look for more ways to tap the considerable expertise of the Commission's own staff. The review process demonstrated that current and past staff and Commissioners represent a valuable storehouse of institutional knowledge. One way to tap it might be to give staff opportunities to develop “white papers” and other in-depth analyses of issues and choices confronting the organization and the field of Alaska rural development in general. Analyses might be purely for internal use or, where appropriate, for public discussion. At minimum such analyses would provide valuable context for current and future Commissioners and help the Commission's different programs be more consistent and focused in their efforts. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 12 SECTION 2: PURPOSE OF THE PROGRAM AND POLICY REVIEW Since the Denali Commission started making grants in 1999, several evaluative processes have been conducted. All have been of limited scope. This program and policy review represents the first effort to describe the full range of the Commission’s impacts, including its programs, its major policies, and its role in coordinating with other government agencies. The methodology (see Section 3) was guided by two considerations: = Animportant purpose of the review is to inform a strategic planning process to be undertaken by the Commission. * Recognizing that representative sampling of all the Commission’s programs, projects, and affected communities is beyond the scope of effort, the review is designed to apply a broad perspective in combination with more detailed analysis of selected projects and communities in order to develop as well- rounded a view as possible of the Commission’s impacts. The review focuses primarily on the Commission’s three “legacy” programs (Health, Energy, and Training) each of which is composed of several sub-programs. These programs have accounted for approximately 80 percent of the Commission’s grants. The review addresses seven other programs in less detail: Economic Development, Teacher Housing, Transportation, Multi-use Facilities, Washeterias, Solid Waste, and Government Coordination. The review process combines the insights of many of the individuals who know the Commission’s history and projects best with first hand observation and primary data collection in affected communities. The review is not intended to substitute for systematic, ongoing data gathering and evaluation of grant impacts, program progress, and Commission strategies. This report presents the methodology employed and a brief overview of the Commission and its activities. Those sections are followed by a synthesis of findings from all phases of the research, and then a program-by-program review. Other information, including additional detail from the site-visit research, may be found in the appendices. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 13 SECTION 3: METHODOLOGY 3.1 Team Composition The McDowell Group has conducted socio-economic studies throughout Alaska for 35 years. The firm has offices in Juneau, Anchorage and Kodiak. Composition of the study team was as follows: Project Oversight Partner Project Manager Lead Analyst Assistant Project Manager ~ Executive Interviews Four Site Visit Teams Survey Manager Interview Coordinator Training Participant Survey Community Resident Interviews Telephone Surveyors Telephone Interviewers 3.2 Research Tasks The components of the methodology were developed in consultation with the Denali Commission to address seven broad areas of interest: 1. Program: To what extent were the documented objectives of Commission projects achieved? N Policy: To what extent were Commission policies followed and what was the impact of those policies, including the relationship between pre-development activities and project outcomes? 3. Performance measurement: How appropriate and relevant are the Commission’s performance indicators? 4. Change: What have been the expected and unexpected impacts of the Commission at the individual, community, organization and regional levels? gl Reason for change: What policies and strategies were employed to achieve the observed changes? 6. Process: How effective are Commission administrative and oversight processes? Appropriateness of project selection: How well did the projects funded match community needs and the overall mission of the Commission? N Denali Commission Program and Policy Review McDowell Group, Inc. + Page 14 The methodology includes five main research tasks: Secondary research Executive interviews Telephone survey of training program participants Site Visits oe of = Interviews with residents of affected communities Secondary Research Secondary research sources included a variety of documents related to the Commission, including Commission Annual Reports and_ strategic planning documents, news articles, government reports, a sampling of grant documents and other Commission files, and other literature by and about the Commission. Extensive use was also made of the Denali Commission on-line project database. Although the database is not designed for evaluation purposes, it contains a great deal of information about funded projects and the Commission as a whole. Executive Interviews In-depth, semi-structured interviews were conducted with 67 experts on rural Alaska and Alaska rural development, including: = Current and former commissioners and Denali Commission staff = Major program partners * Major federal and funding partners * Regional development experts and other key informants Trainee Survey A telephone survey was conducted with a random sample of 250 training recipients drawn from the Denali Training Fund database of the Alaska Department of Labor and Workforce Development (DOLWD). Survey questions addressed employment and other outcomes associated with the Denali Commission-funded training. Site Visits Site visits were conducted, including approximately 50 additional local interviews, in four widely dispersed areas of Alaska. Not only are these communities geographically disparate (Craig and Nome are 1,300 miles apart), they are socially, culturally and economically different as well. Sites chosen suggest the diversity that characterizes Alaska’s communities, people and lifestyles. However, the sites are not intended to be, and should not be interpreted as, representative of Alaska communities or Denali Commission projects in general. No small sample of communities represents all the state’s rural residents. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 15 Three of the four site visits were conducted by teams of two analysts, the fourth by the project manager. Because the site visits were conducted in January and February, locations were chosen that were relatively accessible. Partly for this reason, no visits were conducted north of the Arctic Circle, on the Aleutian chain, or deep in the interior of the state. Additionally, because of the concentrated time period available and the breadth of projects in each area, McDowell Group assigned at least one researcher to each visit who was familiar with the area from prior work. In three cases, research teams included a McDowell staff member who is a current or past resident of the area. Site visit locations: * Craig and Klawock, located on Prince of Wales Island in southern Southeast Alaska * Kodiak and Port Lions, located on Kodiak Island in the central Gulf of Alaska * Bethel, Kwethluk and Napaskiak, located approximately 400 miles southwest of Anchorage, on the lower Kuskokwim River, in Southwest Alaska * Nome and Golovin, located on the south coast of the Seward Peninsula in Northwest Alaska Table 3.2.1 — Site Visit Community Statistics Community Pop Pop Per Capita bs 9 bs ba (Census (2006) Income Individuals Alaska Gov't Unemployed 2000) (Census below Native Empl 2000) e858 (Census (Census 2000) 2000) Bethel 5,471 5,812 20,267 11% | 68% 37% 9% Craig 1,397 1,105 20,176 10 | 31 15 7 Golovin 144 154 13,261 4 | 92 67 4 Klawock 854 776 14,621 14 51 23 11 Kodiak 6,334 5,937 21,522 7 11 19 5 Kwethluk 713 721 6,503 30 95 54 16 Napaskiak 390 464 8,162 20 98 56 3 Nome 3,505 3,540 23,402 6 | 59 30 11 Port Lions 256 211 17,492 12 64 63 4 Source: Alaska Department of Commerce and Community Development, Division of Community Advocacy Community Database Denali Commission Program and Policy Review McDowell Group, Inc. + Page 16 Table 3.2.2 — Site Visit Community Status Community ANCSA Regional Borough b-Toi store) mOJi tg less Corp Bethel Calista Unorganized Lower Kuskokwim 2nd Class City Craig Sealaska Unorganized | Craig City 1st Class City Golovin Bering Straits Unorganized | Bering Straits Unincorporated Klawock Sealaska Unorganized Klawock City 1st Class City Kodiak Koniag Kodiak Island Kodiak Island Home rule City Kwethluk Calista Unorganized Lower Kuskokwim 2nd Class City Napaskiak Calista Unorganized Lower Kuskokwim 2nd Class City Nome Bering Straits Unorganized Nome Public Schools 1st Class City Port Lions Koniag Kodiak Island Kodiak Island 2nd Class City Source: Alaska Department of Commerce and Community Development, Division of Community Advocacy Community Database Community Interviews Structured telephone interviews were conducted with between one and four residents in each of the communities in Table 3.2.3 below (more than 100 interviews altogether). Interviewers prepared by familiarizing themselves with a socio-economic overview of each community and a list of local Denali Commission projects. Subjects typically were a tribal, municipal, or school officials. Interviewers made extensive attempts to find subjects who were knowledgeable about particular projects, as well as about the overall impacts of Denali Commission projects on the community. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 17 Table 3.2.3 — Locations of Community Resident Interviews ets errs S31 CTs este) School District incorporation be feleoli ie La] Akutan 773 | Aleut Aleutians East Aleutians East 2nd Class City No Ambler 283 | NANA Northwest Arctic Northwest Arctic 2nd Class City No Anaktuvuk Pass 308 | Arctic Slope North Slope North Slope 2nd Class City No Anderson 546 | Ahtna Denali Borough Denali Borough 2nd Class City Yes Aniak 528 | Calista Unorganized Kuspuk 2nd Class City No Anvik 99 | Doyon Unorganized | Iditarod 2nd Class City Yes Arctic Village 174 | Doyon Unorganized Yukon Flats Unincorporated Yes Barrow 4,199 | Arctic Slope North Slope North Slope 1st Class City No Beaver 64 | Doyon Unorganized | Yukon Flats Unincorporated Yes Chenega 82 | Chugach Unorganized i Chugach Unincorporated No Alaska Chickaloon 292 | Cook Inlet Matanuska- Matanuska- Unincorporated No Susitna Susitna Chignik Lagoon 86 | Bristol Bay Lake & Pen | Lake & Pen Unincorporated Yes Chuathbaluk 95 | Calista Unorganized Kuspuk 2nd Class City No Cold Bay 89 | Aleut Aleutians East Aleutians East 2nd Class City No Eagle 100 | N/A Unorganized | Alaska Gateway 2nd Class City Yes Elfin Cove 25 | N/A Unorganized Chatham Unincorporated Yes Gambell 643 | N/A Unorganized j Bering Straits 2nd Class City Yes Glennallen 525 | N/A Unorganized Copper River Unincorporated Yes Grayling 174 | Doyon Unorganized Iditarod | 2nd Class City Yes Hamilton 0 | Calista Unorganized Lower Yukon Unincorporated Yes Holy Cross 204 | Doyon Unorganized i Iditarod 2nd Class City Yes Hooper Bay 1,157 | Calista Unorganized Lower Yukon 2nd Class City Yes Huslia 259 | Doyon Unorganized Yukon/Koyukuk 2nd Class City Yes Hyder 92 | N/A Unorganized Southeast Island | Unincorporated Yes lliamna 82 | Bristol Bay Lake & Pen Lake & Pen Unincorporated No Kiana 401 | NANA Northwest Arctic Northwest Arctic 2nd Class City No Kotzebue 3,104 | NANA Northwest Arctic Northwest Arctic 2nd Class City No Larsen Bay 90 | Koniag Kodiak Island Kodiak Island 2nd Class City No McGrath 321 | Doyon Unorganized Iditarod 2nd Class City No Mekoryuk 217 | Calista Unorganized Lower 2nd Class City No | Kuskokwim Metlakatla 1,377 | NIA Unorganized Annette Island Unincorporated No Mountain 796 | Calista Unorganized Lower Yukon 2nd Class City Yes Village Naknek 577 | Bristol Bay Bristol Bay Bristol Bay Unincorporated No Nanwalek 228 | Chugach Kenai Peninsula Kenai Peninsula Unincorporated No Alaska * “Distressed” is a Denali Commission designation. See Definition of Terms, below Denali Commission Program and Policy Review McDowell Group, Inc. + Page 18 Table 3.2.3 - Locations of Community Resident Interviews (continued) Community Pop ANCSA School District incorporation Pei tgs tts] Ltcre lloras) Byes rai) Nondalton 196 | Bristol Bay Lake & Pen Lake & Pen 2nd Class City Yes Northway 79 | NIA Unorganized Alaska Gateway Unincorporated Yes Nuiqsut 411 | Arctic Slope North Slope North Slope 2nd Class City No Old Harbor 192 | Koniag Kodiak Island Kodiak Island 2nd Class City Yes Ouzinkie 193 | Koniag Kodiak Island Kodiak Island 2nd Class City Yes Perryville 114 | Bristol Bay Lake & Pen Lake & Pen Unincorporated Yes Pilot Point 66 | Bristol Bay Lake & Pen Lake & Pen 2nd Class City No Point Lay 235 | Arctic Slope North Slope North Slope | Unincorporated No Quinhagak | 648 Calista Unorganized Lower / i 2nd Class City Yes Kuskokwim Ruby 183 | Doyon Unorganized | Yukon/Koyukuk | 2nd Class City Yes Saint Paul | 460 | Aleut | Unorganized Pribilof 2nd Class City No Savoonga | 712 | Bering Straits | Unorganized Bering Straits | 2nd Class City Yes Selawik 841 | NANA | Northwest Arctic Northwest Arctic 2nd Class City | Yes Seldovia 287 | Cook Inlet Kenai Peninsula Kenai Peninsula i 1st Class City Yes Shageluk 124 | Doyon Unorganized Iditarod | 2nd Class City | Yes Slana 94 | NIA Unorganized Copper River | Unincorporated Yes Stebbins | 612 Bering Straits | Unorganized Bering Straits 2nd Class City Yes Tatitlek 117 | Chugach AK Unorganized Chugach | Unincorporated Yes Tenakee | 109 | N/A Unorganized Chatham 2nd Class City Yes Thorne Bay | 486 | N/A Unorganized Southeast Is. 2nd Class City Yes Tyonek 199 | Cook Inlet Kenai Peninsula Kenai Peninsula Unincorporated Yes Ugashik 17 | Bristol Bay | Lake & Pen Lake & Pen Unincorporated No Whittier 188 | N/A | Unorganized Chugach 2nd Class City Yes Yakutat | 634 | Sealaska Yakutat Yakutat Home Rule | No Source: Alaska Department of Commerce and Community Development, Division of Community Advocacy Community Database * “Distressed” is a Denali Commission designation. See Definition of Terms, below Denali Commission Program and Policy Review McDowell Group, Inc. + Page 19 3.3 Allocation of Effort In consultation with the Denali Commission, study resources were allocated approximately as follows: » LEGACY PROGRAMS - Energy, Health, Training (75% of effort) » CONGRESSIONALLY DESIGNATED PROGRAMS - Multi-use Facilities, Washeterias, Solid Waste, Teacher Housing, Elder Housing, Domestic Violence (20% of effort)! * EMERGING PROGRAMS - Economic Development, Transportation, Government Coordination (5% of effort) 3.4 Definition of Terms Annual funding level — Unless otherwise specified, fiscal-year funding and other annual funding references in this report refer to the federal fiscal year, which begins October 1 and ends September 30. Congressionally designated — These are programs (and associated funding) that have been assigned to the Denali Commission by acts of Congress subsequent to the original Denali Commission Act of 1998. The Denali Commission is required to implement congressionally designated programs according to the individual stipulations attached to each by the Congress. Congressionally designated programs addressed in this program and policy review are listed in Section 3.3, above. Distressed/non-distressed — The designation refers to communities and is an indicator required by statute as a threshold for determining the amount of matching funds required by the Commission for certain health projects. A distressed community is required to provide up to a 50 percent match to Denali Commission clinic-construction funding. A non-distressed community may be required to provide up to an 80 percent match. The Commission determines the specific formula for the designation and adjusts it annually based on data provided by DOLWD. A “distressed” community, as updated in 2006, is defined as meeting all three of the following thresholds: 1) Per capita market income no greater than 67 percent of the US average, 2) Poverty rate 150 percent or greater than the US average, and 3) 3-year unemployment rate 150 percent or greater than the US average. Alternatively, a community may have twice the US poverty rate and qualify on one of the other three indicators. Funding partner - An organization or agency that works with the Denali Commission to provide project funding. In some cases the Commission is the “lead” funder, providing most of the funds for a project. In other cases, Commission funding is secondary to one or more other sources. The Denali Commission is unusual among federal agencies in that it is able to partner with private sources of capital, such as the Rasmuson Foundation, and quasi-public sources such as the Trans-Alaska Pipeline Liability Fund. Public funding partners include: = US Department of the Interior » US Department of Agriculture Solid Waste ' Elder Housing and Domestic Violence are now organized by the Commission as sub-programs of the Health Program Denali Commission Program and Policy Review McDowell Group, Inc. * Page 20 * US Environmental Protection Agency (EPA) * US Department of Agriculture Rural Utilities Service (USDA-RUS) = US Department of Labor * US Department of Housing & Urban Development (HUD) = US Department of Health & Human Services Hub community - A community that acts as an economic and transportation center for rural communities in the region. The designation is neither official nor precise. However communities that are generally considered regional hubs include: = Bethel —- West Alaska * Dillingham and Kodiak - Southwest Alaska * Nome and Kotzebue — Northwest Alaska = Juneau and Ketchikan — Southeast Alaska = Barrow — Northern Alaska * Fairbanks — Northcentral Alaska * Anchorage - Southcentral Alaska and statewide, with the exception of Southeast At least a dozen other communities function as smaller, sub-regional hubs. Multi-use facility - A facility used to consolidate essential community serv ices including, but not limited to, health clinics, fire departments, washeterias, and jails.* Policy —- The word derives from the root for “police.” The Merriam Webster Online Dictionary defines “policy” as: “a) a definite course or method of action selected from among alternatives and in light of given conditions to guide and determine present and future decisions; b) a high-level overall plan embracing the general goals and acceptable procedures especially of a governmental body.” For purposes of this program and policy review, a policy is considered to be a formal document written to influence or direct deliberations toward a predictable, though not necessarily pre-determined, end. The Denali Commission has seven major policies. The extent to which these policies meet the working definition above is discussed in Section 5.4. Program — A program is a staffed, funded, systematic effort to address a defined condition by implementing a strategy. A program must include: * A definition of the problem = A budget * A strategy or hypothesis (sometimes called a “logic model”) that explains why a given set of actions is expected to produce a desired result = A goal that represents the desired condition to be achieved «A set of actions designed to achieve the goal* * Ibid * McDowell Group working definition. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 21 The Denali Commission has 11 major programs and roughly 20 sub-programs. The extent to which these meet the working definition above is discussed in Section 5.3 and Section 6. Program partner — An organization or agency that contracts with the Denali Commission to deliver goods or services to individuals or communities. The Commission’s major program partners include: * Alaska Department of Labor and Workforce Development (DOLWD) * Alaska Department of Commerce, Community & Economic Development (DCCED) * Alaska Department of Environmental Conservation (DEC), Village Safe Water (VSW) * Alaska Department of Health and Social Services (DHSS) * Alaska Department of Transportation and Public Facilities (DOT&PF) * Alaska Energy Authority (AEA) * Alaska Village Electric Cooperative (AVEC) = Alaska Native Tribal Health Consortium (ANTHC) and various regional Native health providers * Alaska Housing Finance Corporation (AHFC) Among the Commission’s many other program partners are: * Alaska Mental Health Trust Authority (AMHTA) * Alaska State Hospital and Nursing Home Association (ASHNHA) * Alaska Works * First Alaskans Institute (FAI) * Associated General Contractors (AGC) * University of Alaska - Allied Health Program * Regional housing authorities * School districts * Municipalities * Tribal organizations = Local utilities Subsistence — The hunting, fishing, and gathering activities that substitute to varying degrees for a cash economy in Alaska communities, particularly rural communities.’ Sustainable — There is no generally accepted definition of what is “sustainable” with respect to rural communities or rural development efforts.” * McDowell Group working definition. * For example, the US Economic Development Administration no longer uses the term in its planning or program documents because staff have found it impossible to define. (Personal communication, Deputy Assistant Secretary Ben Erulkar, US Department of Commerce, Economic Development Administration.) Denali Commission Program and Policy Review McDowell Group, Inc. * Page 22 With respect to its projects, the Denali Commission has defined “sustainable” projects as those that can demonstrate that revenues will balance expenses over the life of the project. This includes funding a reserve for renovations and replacement. (See Section 5.4.) With respect to organizations, the Denali Commission’s practice is to consider an organization “sustainable” if it has an operating history and documented financial strength that indicate it will be able to supply contracted or anticipated goods and services for the applicable duration of the project or projects in question.° The Commission has established, to its own satisfaction, that its major program partners are sustainable. Washeteria — A small, public facility serving as the primary, or only, local access point where people can obtain treated drinking water.’ Washeterias often also include a community’s only showers, restrooms and laundry facilities. ° McDowell Group working definition based on the study team’s interpretation of Denali Commission literature and observation of how the Commission has applied the principle. Denali Commission Annual Report 2006, p. 31. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 23 4.1 Mission and Goals The Denali Commission Act of 1998 (Title III, P.L. 105-277, 42 USC 3121) defines the organization’s purposes as follows: "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, water and sewer systems, and other infrastructure needs. The Commission has expanded substantially on the language of the establishing legislation with respect to its goals and priorities. Among the guidelines that appear in annual reports and other Commission literature are a vision statement, a mission statement, four “strategic goals,” seven “major policies,” eleven “guiding principles”, and five “values.” Language for each statement below is taken from the Commission’s 2006 annual report, except where noted. Vision Statement 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 Statement 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. Four Strategic Goals (2005 Annual Report’) 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 in 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. * These goals are also present in the Commission’s Five-Year Strategic Plan (2005-2009) but are not mentioned in the 2006 Annual Report Denali Commission Program and Policy Review McDowell Group, Inc. + Page 24 4. Federal and state agencies will simplify procedures, share information, and improve coordination to ensure equitable delivery of services to all Alaskan communities. Seven Major Policies These policies differ in scope and application from program to program. They are paraphrased here and discussed in Section 5.4. * Sustainability — projects should be able to demonstrate pro forma that they will provide benefits over their useful lives and that revenues will cover operating costs, maintenance, renewal, and replacement value. * Private Enterprise — projects will be considered where private enterprise cannot or does not “provide needed services at an affordable price.” Projects also should neither unfairly compete with, nor unfairly advantage a private business. = Cost Containment — projects should be designed and implemented to minimize cost. = Open Door — healthcare facilities funded. by the Commission must serve everyone who can pay for services, regardless of race or other factors. * Investment - ten complex factors (listed on the Commission’s website) are identified to help assure that projects will “maximize the sustainable long- term benefits to Alaskans.” The Investment Policy is summarized in the Commission’s Five Year Strategic Plan (2005-2009) as an effort “to ensure that the level of funding provided by the Denali Commission to infrastructure projects in small, declining, and/or environmentally threatened communities services a public purpose and is invested in the most conscientious and sustainable manner possible.” In addition, the Commission has adopted policies requiring that applicants for most facilities grants submit copies of business plans — showing how the facility will be operated and financially sustained - and community plans — showing that the facility has been recognized as a priority by the community at large. The business plan requirement was implemented in 2002 and the community plan requirement in 2005. Eleven Guiding Principles® The eleven principles encompass some of the five policies, above. 1. The Denali Commission will give priority to funding needs that are most clearly a federal responsibility. 2. Denali Commission funds may supplement existing funding, but will not replace existing local, state, federal government, or private funding. 3. Denali Commission funds will not be used to create unfair competition with private enterprise. 4. Projects must be sustainable. “The Commission’s Five Year Strategic Plan (2005-2009) contains slightly different wording for some principles. In particular, it describes the Investment Policy in conjunction with sustainability. The Plan also contains a twelfth principle: “Projects should be community-based and regionally supported.” Denali Commission Program and Policy Review McDowell Group, Inc. + Page 25 10. 11. 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 narrower benefits. Projects should have broad public involvement and support. Evidence of support might include endorsement by affected local government councils (municipal, tribal, etc.), participation by local governments in planning and overseeing work, and local cost sharing on an “ability to pay” basis. Priority will be generally given to projects with substantial cost sharing. Priority will generally be given to projects with a demonstrated commitment to local hire. Five Values 1 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. 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. The Commission will provide the opportunity for all interested parties to participate in decision-making and will carefully reflect their input in the design, selection, and implementation of programs and projects. The Commission will promote programs and projects that meet the current needs of communities and provide for the anticipated needs of future generations. The Commission will set measurable standards of effectiveness and efficiency for both internal and external activities. Priority will be generally given to projects with substantial cost sharing. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 26 4.2 Structure The Denali Commission Act of 1998 created a state-federal partnership to address crucial needs of rural Alaskan communities, particularly isolated Native villages and other communities lacking access to the national highway system, affordable power, adequate health facilities, and other impediments to economic self-sufficiency. — Denali Commission Five Year Strategic Plan (2005-2009) and Fiscal Year 2006 Work Plan The Denali Commission Act provides for a five-member panel of statewide organization presidents, or their designees, to be appointed by the Secretary of Commerce: President of the University of Alaska, President of the Alaska Municipal League, President of the Alaska Federation of Natives (AFN), Executive President of the Alaska State AFL-CIO, and President of AGC. The law further provides that the Governor of Alaska serves as the State Co-Chair. The Federal Co-Chair is nominated by the Senate and the House of Representatives and appointed by the Secretary of Commerce. The Denali Commission describes itself as “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 latest long-range plan (2005-2009) summarizes the Commission’s operating strategy as follows: “The overarching goal of enabling economic self-sufficiency is based on effective community comprehensive planning and regional support.” The Commission is limited by statute to a maximum administrative overhead of 5 percent. It keeps overhead low, in part, by keeping its staff small. The Commission supplements its staff with personnel who work at the Commission while acting as liaisons with other agencies and remaining on the payroll of the other agencies. As of December 2006, program staff and administrative staff were augmented by staff from the AFN, the Governor’s Office, RurAL CAP, the Alaska Legislature (in the capacity of Inspector General), and the USDA Forest Service. Typically, the Commission also maintains staff liaisons to USDA Rural Development and HUD. The Commission’s Transportation Program is currently managed on contract by a former DOT&PF employee. Denali Commission Memorandum of Understanding (July 2003) The foundation for the Denali Commission’s role as a coordinator of government services is a Memorandum of Understanding (MOU), signed initially by 16 state and 9 federal agencies. Currently there are 33 signatory agencies. The MOU is designed to “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 document outlines the following points of common understanding: A. Sustainability - The parties to this understanding recognize the importance of minimizing life cycle costs when investing in public infrastructure projects as an essential “first step” in achieving sustainability. B. Regional Strategies — The parties to this understanding recognize that systematic planning and coordination on a local, regional, and statewide basis are necessary to achieve the most effective results from investments in infrastructure, economic development and training. "Denali Commission Memorandum of Understanding. July 2003. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 27 * Community Plans - A single community 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. * Economic Development — Sound economic development facilitates growth of self-sufficient communities and the parties [to the MOU] agree to coordinate activities that stimulate economic growth. * Workforce Development (Vocational and Technical Training) — Workforce development is a critical component to building sustainable public infrastructure and self-sufficient communities in Alaska. C. Non-Profit Organizations and Other Community Organizations — Non-profit and other community organizations in Alaska are valuable resources for state and federal agencies. They provide regional planning, program support, and partnering opportunities. Denali Commission Sub-structures The Commission employs several sub-structures to obtain input and promote discussion. Workgroups At various times, several workgroups have been active, including: * Housing & Infrastructure Workgroup * Sustainable Utilities Workgroup * Planning Workgroup » Insurance Workgroup The workgroups are described in more detail in Section 6.8, Government Coordination. Transportation Advisory Committee Funding for the Transportation Program is provided by an act of Congress. The Act requires that a Denali Access Systems Transportation Advisory Committee (TAC) be appointed by the governor and that the TAC will: * Recommend transportation priorities and funding strategies * Develop public involvement and coordinate planning programs; develop annual capital budget recommendations = Coordinate multi-region projects Denali Commission Program and Policy Review McDowell Group, Inc. * Page 28 Health Steering Committee The committee is an advising body with membership by: * State of Alaska Department of Health and Social Services (DHSS) * Alaska Primary Care Association = Alaska Native Tribal Health Consortium (ANTHC) * Alaska Mental Health Trust Authority (AMHTA) * Alaska Native Health Board (ANHB) = Indian Health Service (IHS) = Alaska State Hospital and Nursing Home Association (ASHNHA) = University of Alaska 4.3 Operations The Denali Commission Act requires the Commission to develop an annual work plan that solicits project proposals from local governments and other entities and organizations. The Commission develops its own basic operating principles and funding criteria. A proposed work plan is submitted to the Federal Co-chair for review and then published in the Federal Register, providing for 30 days of public comment. The Federal Co-chair takes into consideration the information, views, and comments received from interested parties and consults with appropriate federal officials in Alaska. These include, but are not limited to, Bureau of Indian Affairs, Economic Development Administration, and USDA Rural Development. The Secretary of Commerce is responsible for final approval of the work plan. The commissioners meet at the call of the Federal Co-chair at least two times, and typically four times, each year.'' Some meetings are held in regional hub communities. The following two tables show the Commission’s sources and uses of funds in FY 2006. Historical funding for individual programs is discussed in Section 6. "' www.denali.gov /Legislation.cfm?Section=DC_Operations Denali Commission Program and Policy Review McDowell Group, Inc. + Page 29 Table 4.3.1 - 2006 Sources of Funds FY06 Funding Sources Funding Amount Energy & Water Development Bill $50,000,000 Trans-Alaska Pipeline Liability Funds (TAPL) 4,227,258 USDA Rural Utility Service Funds 15,000,000 Health & Human Services Funds 39,283,200 US Department of Labor Funds 6,784,560 | USDA Solid Waste Funds 750,000 US Department of Transportation (Obligating Authority) 18,074,700 Rescission (withdrawal of a percentage of funds across 507,500 all agencies in government) Total Funding Source: Denali Commission Annual Report 2006 Table 4.3.2 - 2006 Uses of Funds FY06 Funding Uses | Program Obligated Liabilities $133,702,218 Funding Amount Energy & Water Development Bill $47,025,000 | Trans-Alaska Pipeline Liability Trust Fund (TAPL) 4,015,895 USDA Rural Utility Service Funds 14,400,000 j US Health and Human Services Funds 37,319,040 | US Department of Labor Funds 6,530,832 i USDA Solid Waste Funds 303,353 US Department of Transportation (Obligating Authority) 8,873,909 Total Program Obligated Funds $118,468,029 Administrative Funds | Operating Funds 4,629,937 Program Supplemental Funds 1,905,174 Total Administrative Obligated Funds I 6,535,111 T Committed Funds | Program Funds 8,699,078 Administrative Funds : Total Committed Funds | $8,699,078 Total Funding $133,702,218 Source: Denali Commission Annual Report 2006 Denali Commission Program and Policy Review McDowell Group, Inc. * Page 30 SECTION 5: SYNTHESIS OF FINDINGS 5.1 Program Environment The impacts of Commission projects and programs must be interpreted in the context of a number of what might be termed “inconvenient truths” about rural Alaska. Interviews with Alaska rural development experts and rural residents, as well as observations in affected communities, consistently suggest that: * Every village is different. While many key needs are similar from place to place, programs must be prepared to respond to local needs, both with respect to how projects are implemented and how they are evaluated. * The capacity to generate and sustain projects or economic growth involves complex inter-relationships among people and_ organizations. Those relationships vary from village to village. * Very few rural communities have the potential to be sustainable - ie. “economically resilient” — except as part of regional and/or industrial networks that often include a hub community that serves multiple villages. * Currently, there is not enough consistent and reliable socio-economic data to give an accurate measure of the resiliency of small, rural communities over time. = In addition to lack of data, an impediment to understanding rural Alaska is lack of a generally accepted vision or strategic framework within which to assess short- to mid-term progress.” It is these inconvenient truths that make the Denali Commission important to Alaska. The more than 200 rural residents and rural experts interviewed for this evaluation were nearly unanimous in saying that the Commission fills a unique need and has a central role to play in the future health of rural Alaska. In negotiating this challenging environment, most observers believe the Denali Commission must match accountability and transparency with responsiveness, flexibility and innovation. The latter three qualities are typically noted as important Denali Commission strengths. Commission programs implicitly recognize that the magnitude and immediacy of rural Alaska challenges call for a degree of program risk, and the agency is seen as better able than most others to address uncertainty. The Commission’s many program areas and wide variety of alliances and partnerships help make communications an ongoing challenge. The Commission must be able to speak, both figuratively and literally, the languages of the Beltway, the Railbelt and the Bush. Interviews with Commission staff and Commissioners show that considerable thought has been given to the implications of this complex funding and socioeconomic environment within which the Commission works. ' For example, DCCED collects and posts regional development plans to a page of its website on behalf of itself, the Denali Commission, USDA Rural Development, USDA Alaska State Natural Resource Conservation Service, and the US Economic Development Administration (EDA). As of August 2007, the site contained 22 separate plans posted by Alaska Regional Development Organizations (ARDORS), Resource Conservation & Development (RC&D) Councils, and other entities from around the state. The web page is an effort to encourage strategies that “complement each other for the benefit of the people and resources of the region.” It also highlights the challenges of coordinating rural development. DCCED’s “Plans Library” database contains dozens more “community plans,” “community action plans,” “comprehensive plans,” “economic development plans,” and various other geographically specific strategy documents. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 31 5.2 Program Objectives Stated Program Goals Table 5.2.2 shows goals and priorities as derived by the study team from various program documents posted on the Denali Commission website. Goals are more clearly articulated for some programs than others. Documented Project Goals Individual project goals are most commonly documented in grant agreements and/or business plans filed as part of the funding application process. Availability of these documents in the Denali Commission project database is inconsistent. However, program staff were able to supply fairly complete documentation for a sample of projects on request. ~ Where significant gaps exist in project documentation, it may partly be due to the fact that planning requirements, policies and document templates have been phased in over time. Community plans, for example, were not required until 2005, and projects already under construction at that time were exempted from the requirement. As a result, many completed projects do not have accompanying community plans. Lack of documentation also reflects the fact that most projects are implemented by partner organizations. Where partner organizations are well established or have a long history with the Commission, documentation in the project database is typically limited to photographs and contract performance requirements that end with the construction phase and do not include impacts on people or communities. Agreements with long-standing partners such as AEA, AVEC and ANTHC vary. Typically, they do not contain the type of explicit covenants often used, for example, by large foundations. Such covenants may make funding contingent on achieving specific expectations for job creation, poverty alleviation, ‘health improvements and other outcomes. Instead, the Commission and its program partners generally agree to abide by basic principles such as those laid out in the Commission’s policies and in various memoranda. The degree to which these principles are clear and aligned from one organization to another varies considerably, as discussed later in this section. Other Denali Commission Goals In addition to funding projects in rural Alaska, the Denali Commission was formed to improve the cost- effectiveness of government service delivery. No baseline cost data or benchmarks for cost effectiveness were established, however (other than the statutory stipulation that the Commission confine its own administrative costs to 5 percent or less of its budget). As a result, the Government Coordination program, along with the Commission’s many other activities to foster cooperation and communication among agencies to date, may be assessed only qualitatively (see Section 6.8). Denali Commission Program and Policy Review McDowell Group, Inc. + Page 32 Outcomes and Outputs The Denali Commission has been primarily output-oriented. Its major health and energy programs are designed to address a prioritized list of facility deficiencies developed by other agencies (DHSS and the US Coast Guard, respectively). Commission performance measures track progress with respect to building or upgrading those facilities. As a result, the project database is designed for easy retrieval of the number of facilities funded and their stages of planning and construction. The facilities are tangible “outputs” that have resulted from program investments. With few exceptions, the database and other grant documents do not address “outcomes.” Outcomes are the changes a program is intended to produce in a physical or social condition. For example, an outcome of a program designed to improve student performance might be that graduation rates increase. Though not explicit, outcomes implied by the Commission’s programs and mission are considered by most to be related to health, safety and economic security. However, the only outcomes measured by the Commission are employment-related and apply mainly to training programs. In spite of the Commission’s emphasis on sustainability, Commission documents and data files seldom address the financial or mechanical condition of funded facilities once they are in operation. Outcome Measures The Denali Commission has funded several efforts to explore potential impact measures applicable to rural Alaska communities. These include: * Several papers and reports on rural economic development performance indicators and an analysis of rural utilities by the Institute for Social and Economic Research (ISER)"* * An Annotated Bibliography of Selected References on Economics and Social Indicators by Northern Economics, June 2004 * Grants to First Alaskans Institute (FAI) to explore poverty measures and community-specific socio-economic indicators" The challenge of identifying such indicators is widely acknowledged to be immense. The Commission is not alone in the attempt, nor in the lack, so far, of success. As a result, the Commission has not adopted a set of rural quality-of-life indicators or a framework within which to interpret them. While the progress of communities remains undocumented, it is possible to identify a great number of individual program impacts, as discussed in Section 5.3, below. Interpreting those impacts is challenging, however, because of a lack of clear expression at the Denali Commission and elsewhere of how infrastructure provision is intended to lead to economically sustainable communities. In the McDowell Group’s experience, outcome measures and the data needed to assess them are best specified during the program design process. To do so requires that several conditions be met: " For example: Economic Development Performance Indicators: 3 Briefing Papers, June 2004 and Sustainable Utilities in Rural Alaska, July 2003. 4 For example, Literature Review on Economic Growth and Poverty Reduction, July 2006, by Donna J. Goldsmith, Esq. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 33 * First, the relationship between the program and the outcome must be well understood, such that the outcome is truly correlated with the program activities. (This is the “logic model.”) * Second, the outcome must be measurable over a period of time that is brief enough to be useful for managers and decision-makers. * Third, managers or evaluators must be able to adjust for exogenous influences, that is, changes in outcomes that are caused by factors outside the program in question. All three conditions are challenging for Denali Commission programs. The third is perhaps the greatest obstacle to impact evaluation because exogenous influences are inherent in the nature of infrastructure development. One may build a clinic, but whether health and safety subsequently improve depends on whether people know about the clinic and can afford to use it, whether it is staffed with the right professionals, offers the right services, is the proper size, is in the right location, etc. Further, health outcomes are also a function of genetics, diet, environmental risk and many other variables. Additionally, to judge a program by its aggregated outcomes means that the program must be formulated to maximize those outcomes, but this is not appropriate for many Commission programs. Denali Commission funding is not necessarily awarded where it will have the most impact on a per-capita basis. If it were, then grants would be concentrated in larger communities. Internal practices such as using a combination of force account (local) and union labor make employment impacts harder to generalize. Finally, understanding local impacts often depends on understanding the interplay of cash and subsistence economies, as well as the role of local cultural values. Potential Performance Indicators Table 5.2.1 shows a selection of performance indicators applicable to broad development programs and roughly how often they are used as formal indicators by the Denali Commission and its program partners. Where indicators are shown as “not used” it means that examination of selected Commission and partner records did not reveal instances where those factors were being tracked in a formal, evaluative fashion. Formal tracking means, at minimum, that data is defined and tracked over a specified time period. A stricter interpretation of “performance measurement” would require that targets be established prior to program activity and data collected to assess whether targets have been attained. The Commission establishes annual targets with respect to certain outputs (for example, numbers of facilities begun and completed) but not for the other indicators in the table. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 34 Table 5.2.1 Denali Commission Use of Performance Indicators Indicator Program Partners Denali Commission Number of facilities begun and completed Construction management indicators (on- time, cost control, quality of design and construction, etc.) Operations and maintenance monitoring Life, health, safety improvements Employment and earnings Human capital-building* Community-building Partner processes and priorities *Since the 1990s the United Nations and many other world development organizations have focused on human-capital- building as a rural strategy. Human capital was defined by Adam Smith as “the acquired or useful abilities of all the inhabitants or members of the society.” Performance measures suggested by experts interviewed for this program and policy review as generally applicable to Denali Commission efforts include: * Changes in quality-of-life in rural Alaska * The degree to which local communities make what contributions they can to building and maintaining the projects * Life, health, safety indicators * The degree to which agencies now work together to accomplish projects that individual agencies might not have attempted prior to the Commission Appropriateness of Denali Commission Indicators Simple output measures were largely appropriate with respect to the original impetus for the Denali Commission, namely to mitigate documented deficiencies in bulk fuel storage facilities. The same logic could be applied to many of the other Denali Commission programs. Access to functional medical clinics, potable water (washeterias), habitable work environments (multi-use facilities), decent teacher housing, a place to go when home is not safe (domestic violence shelters) — these are things that Americans depend on in most parts of the country. If infrastructure is a basic right, it is not unreasonable to measure an infrastructure program by what it builds. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 35 On the other hand, output measures do not contribute much to our understanding of how to sustain or strengthen rural Alaska. Currently, the Commission’s mission describes “a diversified and sustainable economy,” and its Economic Development Program is explicitly concerned with economic change, not just infrastructure. To the extent that it accepts responsibility for achieving these goals, the Commission must be concerned with how its infrastructure is used. However, without a strategic framework, it is easy to focus on the wrong indicators. For example, the Denali Commission’s 2004 Office of Management and Budget “Program Assessment Rating Tool” (PART) evaluation suggests that a key measure for the Commission should be movement of villages from “distressed” to “non- distressed” status. Identification of an “attained” condition is comparable to the approach used by the Appalachian Regional Commission, where the concept is applied mainly to counties. However, Alaska is much larger and more rural than Appalachia, and the Denali Commission is less than a decade old. To expect whole boroughs (the closest entity in Alaska to a county) to show improved economic status in such a short time as a result of 800 or so completed grants distributed across 586,000 square miles is over-reaching. Further, the distressed /non-distressed dividing line has significant shortcomings as an indicator, as discussed in Section 5.4. Though challenging to develop, the most useful impact measures for most Denali Commission projects would be locally and regionally specific. That is, they would be designed to reflect the context of individual communities and their surrounding regions. Measures designed for Southwest Alaska would be different from measures designed for Southeast Alaska. Measures for Aniak might be different from those for Hooper Bay. Local impact measures could, at least initially, be simple and project- specific. Regional measures are more challenging, but could be developed gradually as the interactions between projects and communities become better understood. Further, the Commission’s focus on sustainability demands attention to post construction monitoring. The foundation for effective monitoring already exists in AEA’s business plan monitoring, AEA’s on-line, real-time video and instrument monitoring of power plants, audits performed by the Commission’s Inspector General, DOLWD’s annual Denali Training Fund analysis, and the DCCED Rural Utilities Business Advisor (RUBA) program. In addition, Denali Commission program partners such as AVEC, regional health corporations, regional housing authorities, rural school districts, and other regional entities regularly communicate with, and obtain information from, rural communities. In addition to simply doing more of this type of monitoring, the Commission needs a plan for how the information will be used. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 36 5.3 Impacts of Programs This section summarizes findings with respect to the individual and collective impacts of Denali Commission programs. (Program-by-program impacts are discussed in more detail in Section 6.) As noted, attempts to generalize about Denali Commission impacts are hampered because: * Conditions, priorities, and financial and human capital vary from community to community and region to region * Project implementation varies from program to program and program- partner to program-partner, as well as having changed over time * Post-construction monitoring of Commission projects has been limited However, a wide range of program impacts was identified during the review, including improvements in: * Perceptions of quality of life * Health and safety * Local skills and employment * Cost of energy and access to healthcare » Effectiveness of government services * The capacity of communities to plan and execute local initiatives Much of the evidence for project impacts is qualitative. This is in part because the operating history of most completed projects is short. It is also because systematic efforts by the Commission and its partners to identify and track quantitative measures in a form that makes them useful for outside evaluation have so far been limited. Few negative impacts from Commission projects were identified. However, the review found that some of the Commission’s programs and practices have potential to produce unintended consequences. Table 5.3.1 shows the general goals for each program and the types of impact evidence identified with respect to those goals. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 37 Table 5.3.1 Denali Commission Individual Program Goals and Priorities Program Stated Goals or Priorities Evidence of Impacts Energy Safe and reliable energy Some savings from larger bulk fuel purchases and infrastructure in Alaska while reduced reliance on emergency deliveries minimizing efforts and expenses Improved generator efficiency and waste-heat recovery Improved compliance with oil spill and other regulations leading to reduced probability of spills Improved reliability and convenience Resident feelings of improved confidence and well- being Health Improve healthcare delivery for rural | Expanded and more efficient system of regional Alaskans ... to ensure all Alaskans service delivery receive safe and reliable healthcare | Requced need for patient transportation Increased access to new services (especially behavioral health and dental) Increased preventive care visits Improved privacy and feelings of safety for residents Training Ensure local residents have the skills | Increased employment and earnings necessary to become employed on Increased worker confidence and aspirations the construction, operation, and | TL maintenance of Denali Commission Improved maintenance of facilities and other public infrastructure New local construction and long-term employment projects in rural Alaska opportunities Multi-use Encourage consolidation of Impact data not readily available Facilities compatible essential community Some indication that projects are financially fragile services, eliminating duplication of services and increasing the efficiency with which services are delivered (with priority for funding) to uses associated with life, health and safety Washeterias Projects chosen from the state Capital Improvement Program (CIP) and the Indian Health Service Sanitary Deficiency System lists with preference for “projects where there are possibilities for collaboration, project sequencing, and co- mobilization with other infrastructure projects” Impact data not readily available Central role of potable water widely acknowledged, but life, health, safety impacts difficult to isolate. For example, a longitudinal comparison of comparable villages with and without washeterias would face many practical challenges Some indication that projects are financially fragile Solid Waste Help relieve conditions that threaten contamination of rural drinking water Anecdotal data on improved functionality and operator safety from new equipment Data linking projects with water quality not available Allow elders living in rural Alaska to stay in their home communities (with priorities based on an AMHTA needs assessment) Elder Housing Most facilities not yet operational Keeping elders in the community expected to support family stability and retain income stream associated with elderly Denali Commission Program and Policy Review McDowell Group, Inc. * Page 38 Table 5.3.1 Denali Commission Individual Program Goals and Priorities (continued) Program Goals or Priorities Evidence of Impacts Teacher Gap funding to (reduce teacher Persuasive anecdotal and some quantitative Housing turnover and) increase the quality of | evidence of improved teacher recruitment and education ... by improving the reduced turnover availability and quality of housing for | Data linking projects with student performance not teachers available Domestic Upgrade and construction of shelters | Anecdotal data on improved functionality and safety Violence for victims of domestic violence and of facilities, including some increased capacity child abuse (based on priorities Quantitative data not currently available developed by the Council on Domestic Violence and Sexual Assault (DCVSA) Economic Help ensure that good businesses Sub-programs are consistent with well-established Development and business ideas have a chance to become long-term, self-sustaining enterprises needs and development practices Qualitative impact evidence (Mini-grant Program evaluations), but quantitative benefits not tracked over time and vary from project to project Transportation | An appointed committee ranks Potential to measure health and safety impacts in projects based on multiple criteria the future, for example to link boardwalks and local road improvements with reduced respiratory distress Government To deliver the services of the federal | Data not available to demonstrate cost-reduction Coordination government in the most cost- effective manner possible ... eliminate duplication, share resources, and bring a “best practices” approach to doing the public’s business History of working groups shows evidence of a wide variety of inter-agency communications and cooperation Summary of Quantitative Analysis Existing impact data on individual projects is mostly confined to what is collected as operating data by program partners during the normal course of business. In most cases, that data is not systematically conveyed to the Denali Commission. As a result, much potentially useful data is not readily accessible, not comparable from one organization to the next, or not structured in a way that lends itself to evaluative analysis. Another obstacle to quantitative analysis is that projects are not old enough nor, in most cases, concentrated enough to cause identifiable changes in broad socio- economic or public health indicators. Such indicators are widely lacking at the level of the individual community. Finally, impacts of similar projects often vary greatly from community to community. This means there are few instances in which aggregating impacts across communities provides an informative overall picture of a Commission program. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 39 The extent to which impacts may be aggregated is discussed below. More detail on quantitative measures associated with each program, and with individual projects, is available in Section 6. Project Outputs A conservative accounting of the Denali Commission’s productivity, where multiple grants for a single project or facility are counted only once, shows that, in seven years the agency has been responsible directly, or in partnership with other funders, for: = 158 completed energy projects, including 60 code-compliant bulk fuel facilities and 60 power generation and distribution upgrades or replacements * 105 completed health projects including 82 new or substantially upgraded rural primary care clinics * Training sessions attended by more than 2,000 Alaskans * 100 other completed infrastructure projects ranging from washeterias to docks to new teacher housing * Nearly $14 million in economic development grants The table shows the approximate number of projects and their status at the end of 2006. Multiple grants for a single project or facility are counted as one. Training grants are not included. Some programs do not recognize a “planning/ design” phase, and instead designate all projects as either “complete” or “in-progress.” Table 5.3.2 Project Status by Program as of 12/31/2006 Program Complete Construction or Planning/Design “in progress” Energy 158 78 56 | Health 105 52 74 Training 2,000 individuals through 2005 Multi-use Facilities 10 6 12 Washeterias 17 7 Solid Waste 28 11 Elder Housing 19 Teacher Housing 21 10 8 Domestic Violence 22 Economic 252 40 Development Transportation 60 Government N/A N/A N/A Coordination Total 615 293 138 Denali Commission Program and Policy Review McDowell Group, Inc. + Page 40 Changes in Perceived Quality of Life Survey research on trends in perception of quality of life in rural Alaska has been limited. Statistical research linking quality of life perceptions to Denali Commission projects is not available. Changes in Health and Safety Direct impacts of Commission projects are not discernable in public health data. Indirect indicators were identified that suggest: * An increase in clinic visits in communities with Commission-funded clinics, as reported in Medicaid 1A reports and in data provided voluntarily by a few regional healthcare providers. (Yukon Kuskokwim Health Corporation (YKHC), Southeast Alaska Regional Health Consortium (SEARHC) and ANTHC records.) * An increase in immunizations and other preventive procedures associated with new clinics. (YKHC and ANTHC records.) * An increase in patient-visits for behavioral health and dental services associated with new clinics. (YKHC and ANTHC records.) Other health-care-provider organizations reported having similar data, but did not provide it. In most cases, local knowledge is necessary to interpret standardized (ie., Medicaid) data with respect to its relevance to Commission projects. Local skills and employment = 95 percent of Denali Training Program participants consider the training they received valuable or very valuable. * 98 percent would like to see more training available. Program records show that 28 percent of participants have received more than one Denali Training Fund training. = 83 percent of trainees surveyed work in their home communities, and 87 percent say the Denali Training Fund has had a positive effect on their communities as a whole. * DOLWD data shows that increases in wages in the first four months after training tend to be sustained in following years (Table 5.3.3). For example, the table shows that people who were trained in 2001 earned 35 percent more in the four quarters after their training as they had in the four quarters before their training. More importantly, they continued to earn at the same increased level (36 percent) in subsequent years. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 41 Table 5.3.3 Percent Increase in Annual Average Wages for Denali Training Fund Trainee Cohorts Program Increase in Avg Wages in the Increase in Avg Wages for all Exit 4 quarters following exit post-training years compared Year compared to the 4 quarters to the 4 quarters before before training training 2001 35% 36% 2002 27 36 2003 28 42 2004 8 10 2005 11 23 Cost of energy and cost of access to healthcare * Conversion of approximately 60 bulk fuel facilities from non-code-compliant to compliant has reduced spills, preventing environmental damage and saving clean-up costs. Data to quantify savings are not available. * Upgrades of approximately 60 power generation and distribution systems have reduced fuel consumption and increased re-capture of excess heat. The total impact may not be quantified. The data obtainable was from AEA and is based on theoretical efficiency gains, rather than actual fuel purchases. It covers 13 projects and shows an imputed average annual savings in fuel costs of $37,000 per project. AVEC reports having similar data, but did not provide it. * Substantial savings from reduced need for patient transportation due to more and better local and sub-regional clinics may be inferred. YKHC estimates that one of its four sub-regional clinics saves patients $1.9 million annually in travel. However, no data is available on the number and cost of actual trips. Effectiveness of government services * There is a great deal of qualitative evidence that the Commission has contributed substantially to the effectiveness of government services. No quantitative measures and no pre-Commission baseline for comparison have been identified. The capacity of communities to plan and execute local initiatives * Application of aggregated quantitative measures is not practical. In part because many projects are initiated or facilitated by program partners, consultants and others outside the local community, evidence of increased human capacity in villages to undertake successful development initiatives is mixed. The remainder of this section describes perceptions of the Commission in the form of major themes and examples from major research tasks, including approximately 200 interviews. Themes are organized as follows: * Key informant interviews * Community interviews Denali Commission Program and Policy Review McDowell Group, Inc. « Page 42 * Key site visit observations (including impacts of local projects) * Training survey and training-provider interviews Key Informant Interview Themes The following comments are paraphrased (or occasionally quoted) from in-depth interviews with individuals who are experienced with development issues in rural Alaska. Many of the comments highlight Commission accomplishments. Others offer ideas for improvement. Many are thought provoking and offer no easy solutions, reflecting the complexity of the Commission’s mission and activities. Improved Government Coordination and Responsiveness * Former Commission staff and other rural development experts tended to agree that, “The Denali Commission has brought many different agencies to the table that would have been difficult to convene otherwise.” = “Cooperation, joint-coordination and information sharing between funding agencies has dramatically improved as a result of the Denali Commission,” and this has made it easier to improve and implement programs. * The quarterly funders forum sponsored by Denali Commission around the state have been good at getting people thinking and talking. Funding agencies look at projects and ask who can take different parts. * Efforts to consolidate documentation and other funding application requirements for projects with multiple funders have been important and should be continued. For example, a single business plan format should meet the requirements of all agencies. "The Commission is open and proactive about collaboration. For example, the state has not been very successful working with tribal governments. The Commission is a very valuable bridge in that kind of situation. * Denali Commission is a good access point between villages and funders. They should ask regional councils periodically what they need. = The Denali Commission does a good job at tapping the talent of people in government. It would be a disaster to lose the Denali Commission and see agencies slip back into their own turf-oriented thinking. * Delegating staff from other agencies is effective. Whether or not it really reduces administrative cost is a question, but it is good for collaboration between agencies. They are really invested, more so than would happen just from the money the Denali Commission brings to the table. = The spirit of cooperation comes right from the top at the Commission. Before the Commission it was mainly the Rasmuson Foundation that was trying to influence the funding culture in Alaska to be more collaborative. Then the Commission and USDA Rural Development joined in to solidify that progress. "= Denali Commission funding is typically fast-paced, which is good. Delays in funds can really throw off a construction schedule and budget where there are short construction seasons and dependence on barges and other seasonal transportation. * Look for a long-term change in inter-agency dynamics. Infrastructure is the entry point for strategic dialogue with the state about how to get measurable health outcomes. Choice of outcome measures must involve all the key players. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 43 Community Impacts and Relationships = The scope and magnitude of the Commission’s grants have been key. For example, the addition of behavioral health and dental facilities to new clinics is a systemic approach that is more significant than new clinics alone. It represents an evolution of healthcare to get new services to villages. The infrastructure made this possible. * For evidence of success, look at the level of community “buy-in.” How much is a community willing to invest in its own improvement, including non-cash contributions? = The business plans can be a heavy load. Are those expectations always appropriate? Are we second-guessing too much? For example, how far do people need to go to show that a source of revenue is sustainable? Is a state grant sustainable? The Commission had to pass a resolution that Medicaid is sustainable. The business plans should be used locally as a vision for the village. The Commission doesn’t hold applicants to this. You can’t treat infrastructure simply as life, health and safety. It needs to be part of a bigger plan. * Tying training actively to the infrastructure in, for example, healthcare, increases the capacity of a community to get benefits. The Denali Commission must engage the state and tribes to promote jobs, etc., to get maximum benefit from the projects. The Commissioners are underutilized in making these connections. The Denali Commission is in a perfect position to convene policy dialogue. The Commission should acknowledge this as part of their core mission. Understanding Community Needs and Priorities = The Denali Commission must engage with the community, and the locus of a project must stay in the community. At the same time, economics must be looked at region by region. "The reality of the 40 or 50 person village must be confronted. You can’t create even a part-time job managing infrastructure in tiny villages. For the communities that can handle it, sustainability and maintenance are fine. But there will always be communities that need financial (e.g., an endowment) and technical help to stay current. * The clinics in general have been very successful. The only real issue has been whether the space has been used as intended. This just needs a bit more structure, nothing heavy-handed. People will always game the system to some extent. For example, one community that got funding for a clinic already had one that met their needs. The village council saw the new clinic as a way to free up the old building to be used as a tribal office. = New clinics should have an impact on fundamental indicators of community health. However, tracking requires ongoing engagement that may not be practical or appropriate for the Denali Commission. Is it realistic for the Commission to take responsibility for how clinics are used after construction? = I have mixed feelings about some of the public projects. ANTHC and the Denali Commission developed a water plant and lagoon that may be over-built — needed a larger population to support a project of that size. It put a strain on the community, raising electricity costs for everyone. Funding spent on clinics is good but in some cases the community could have probably done with weatherizing (new windows, insulation) and upgrading (plumbing) old ones, saving money. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 44 Potential Improvement to the Commission Process It’s a fact that villages with the best grant writers (or with the money to hire grant writers) have an advantage. It doesn’t mean the village is really developing “capacity.” The communities that are the most ready tend to rise to the top of the list, sometimes at the expense of those with greater needs. This also applies to how ready the regional partners are to engage. This is a function of how sustainability plays out. To some extent, the rich tend to get richer. (The saving grace is that none of these communities is “rich”). It’s not clear that the Commissioners and the staff of the Denali Commission are always on the same page. That's to be expected, given the nature of the Commissioners’ roles, but it warrants consideration. Different planning requirements by different agencies (Denali Commission, HUD, DCCED) are a major burden. Business plan and other templates were originally designed on the basis of provider (partner) input, not village input. Early teacher housing projects were a nightmare. Process with AHFC was cumbersome and dealing with school districts was very time-consuming. The Commission had too many mandates and reporting requirements. Still, it was important for teachers. The use of pre-development partnerships is great, e.g., Rasmuson, Denali Commission, AMHTA, etc. In a negotiation, the Commission needs to present the full list of requirements up front. Don’t piece-meal issues and questions. The Commission could make itself more rural-friendly. Maybe it needs to meet around a weekend to get rural people to the table. The Denali Commission could do more to bring legislators to rural sites more often. They need to see multiple sites and to stay overnight. Recognize that no one speaks for villages except villages. Nonprofits, agencies, AFN, state —all have their own agendas and incentives. Comments and Questions about Commission Strategies The Denali Commission can’t have expertise in all the areas needed to do comprehensive rural development. Look at the Canadian approach to small villages. A menu of services and infrastructure that's available and appropriate. It’s not enough to have federal/state cooperation. You need federal/state/regional cooperation. There is a broad movement toward regionalized approaches. The Denali Commission must realize that regional leadership must arise from within. It can’t be chosen on the basis of who the Denali Commission or another agency feels comfortable with. Energy cost is a time bomb in rural Alaska. We must look further out to craft energy programs. The rush to commit to diesel generation was short-sighted. The Denali Commission has potential to address significant challenges like energy and regional transportation planning. Planning and coordinating are the keys, not just delivering dollars. It’s critical to recognize the structural problem with rural economies that results in local spending leaking almost immediately. Training is one way to counteract this. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 45 * The hardest thing to fund with respect to housing is water/sewer/roads. There is money for houses but not for the support infrastructure. There is a big need for regional infrastructure planning. Similarly, we need an energy plan for rural Alaska. Villages can’t live with the volatility of fuel oil prices. When fuel prices go up, more people go on food stamps. What is the goal for energy programs? * To maintain infrastructure will require some kind of endowment. * The Detiali Commission could stretch its dollars by getting more partner investment in bulk fuel. * Currently, there is a cap on force account wages. Why are we doing that? Is that a policy? Is there a rationale for why a cap at a certain level is necessary or appropriate? * Focus more on economic development training. Village residents need to acquire business and entrepreneurship skills. Community Interview Themes The purpose of the community interviews was to get first-hand insight into the impacts of projects at the community level. The study team found it challenging to identify individuals, particularly in smaller communities, who were familiar with the Denali Commission processes and requirements. Many small villages depend on someone from a borough, housing authority, health provider or other organization to represent the village with respect to Denali Commission projects. Comments below were made by individuals in a variety of village roles. Typical respondents were city and tribal administrators or individuals involved in the management of specific facilities such as tank farms, power utilities and clinics. The Commission and Accessing Funding Almost all the community representatives interviewed said funding from the Denali Commission was crucial to infrastructure development in rural Alaska. Many said that without Commission funding, important projects would not have been implemented or would have been much more laborious and time-consuming. Typical comments include: * Working with the Denali Commission was a positive experience — we would not have been able to do the project without them. = It’s been a God-send. * = The Denali Commission has been very important. The city is going to the Denali Commission more and more each year for funding. As the community transitions from a logging community to a “new” type of community, the city requires more and more resources to develop other industries, etc. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 46 * The Denali Commission has been very supportive and positive, and that has given them (people in the community) a sense of accomplishment. * The Commission's new reporting requirements system is confusing and difficult to follow. Additional instructions or training are needed. * The community was late to learn about the Denali Commission (learned about it through the Southeast Conference) and has felt at a disadvantage in the application process because they are an unincorporated community. The community feels it must compete against communities with full-time organizers and grant-writers who are much more experienced with the process. Also, Commission projects are often “above” the basic needs of small, unincorporated villages. Community Benefits from Development/Organizing Where projects were developed mainly by program partners or other outside entities, community-level development and organizing skills may not be substantially affected. Communities that engaged actively in the planning/ development process reported impacts such as: = (The village) has had to set-up and run a non-profit that will own the elder housing facility, so learning to organize and implement this new organization was a great learning experience for the community. = When facilities are built or upgraded, there is a sense of pride within the community and residents are motivated to keep them clean and running well. = Town meetings were held to discuss potential projects and the community strengthened its organizational skills. The application process will continue to get easier as the town has more practice with the process. = The process has brought the community together and also helped them learn to work well with outside groups. Communication and Matching Projects with Community Needs In some cases, residents said project design and construction flaws could have been prevented if community representatives had been consulted more extensively. However, interviews also suggested that, even in small communities, residents may have divergent views of what the community truly needs. "The control boxes are made of stainless steel, which does not work in this wet climate, and there is a lot of corrosion on the controls. The community did not have enough say in the design and construction and is now left to deal with problems that could have been prevented. = The fuel facility didn’t need the large overhaul it got; it just needed certain smaller upgrades. The current facility is worse than the original in some aspects. = The community wasn’t looking for a new clinic, just some fairly minor repairs to the old one. But the Denali Commission sent a team of people and began planning for a new clinic. It hasn't been built yet, and the repairs to the old clinic haven't been made. = The burn box is not as efficient as the prior system because it is too big for the community's needs. (This seems to have resulted from poor communication between the community representative and the outside designer.) Denali Commission Program and Policy Review McDowell Group, Inc. * Page 47 The language barrier between outside organizers and the elder residents of the village was a problem. English was often a second language for the elders and trying to explain detailed information to them was difficult. The project is ‘overkill’ for a community of 200, especially since people are moving out of the community to find jobs. Because Denali Commission funding does not cover water and sewer, we had to plan and co-locate the new clinic with the new community center, to utilize its water and sewer. The initial advice that the village received from Commission staff was not clear. The village plans to apply for additional money, but fears they do not have enough political clout to grab the attention of the Commission. The Denali Commission should be more open to different types of projects, depending on the community's need and not necessarily the Commission's “project of the month”. The Commission tends to group Alaskan villages/communities together in terms of types of projects, rather than looking to communities to identify the most needed projects. Unfunded Communities A limited number of interviews were conducted with residents of communities that have not received Denali Commission funding to date. Respondents were asked whether they had applied for funding and, if so, why they had not received it: The board only applied for grants that would benefit them personally. They were finally voted out in 2006. The community doesn’t pursue grants very often because we usually have enough of what we need. We were unable to get Denali Commission funding for a dock project. We have since obtained other sources of funds. Our application was rejected. We understood that the grant was intended for economic development, but, judging from the grants that were awarded, the real priority was dust control. The city never heard back from the commission and has never really understood why they were rejected. (They plan to reapply in the future.) Our village is too small to qualify for Denali Commission funding. We hope to apply when we reach the minimum population (25 year-round residents). forward. We are just Previously, there was no city administrator to move projects finishing the baseline requirements now —community and business plans. Key Site Visit Observations This section is a distillation of information obtained during the four regional site visits. The Site Visit Appendix provides a detailed account of the four regional site visits conducted for the review. The site visits included first-hand observation of a wide range of projects and interviews and conversations with residents of both rural villages and larger hub communities. Many of those interviewed were local or regional leaders in rural development and services. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 48 Site visits revealed both similarities and differences among the chosen communities. Among the most important: Denali Southeast Alaska has a significantly more developed cash economy than the other regions visited. Further, economic and social conditions may vary widely from community to community, even for communities in close proximity. Full alignment of priorities among all the residents of a community or between communities and the regional program partners that serve them may not be assumed and is more likely to be the exception than the rule. The Commission is seen as, in general, easier to work with than other agencies and critically important to addressing local needs. Local leaders often are not familiar with the Commission’s role in projects as they frequently interact with program partner organizations. Communities value the extent to which the Commission is able to act as a central access-and-referral point for community-based development efforts. Commission Process Overall, there is strong support for the Denali Commission and its programs. The Commission is seen as flexible and a source of support that would otherwise not be available. All of the projects funded by Denali Commission were or are local priorities (none were imposed on the communities). The consensus from Nome and Golovin informants is that the Denali Commission's application and grant process is more efficient than those of other federal funders, particularly when dealing with multiple funders. However, one grantee objected to what he said was an evolution of requirements over the application process. Providing one point of contact for multiple funding organizations is considered a vast improvement over applying for individual federal grants. Accessibility to, and support from, Commission staff regarding application questions and project issues were also appreciated by many people who had been locally involved in Commission-funded projects. Strong and active intermediary organizations, such as Norton Sound Health Corporation (NSHC), Kawerak, and AEA are widely seen as key to facilitating the granting process, as well as project planning and implementation. Kodiak informants commented that the Denali Commission effectively brought diverse types of funders to the table (ranging from private donors to state and federal funders) to talk about development projects. Kodiak informants generally agreed that joint coordination between funding agencies has improved over time and that funding partners communicate more and share information more openly as a result of Denali Commission coordinating efforts. Residents noted the challenge of submitting separate applications to several funding agencies in order to receive funding for one project. The suggestion Denali Commission Program and Policy Review McDowell Group, Inc. + Page 49 was made that agencies coordinate their processes to a greater degree so that multiple applications and approval processes are not necessary. * Port Lions informants said they had little direct experience with the process of bringing various funding agencies to the table in order to make projects happen. They suggested that Denali Commission staff try to spend more time “on the ground” in communities applying for or receiving funding. * Port Lions community members suggested that a regional approach to project funding by the Denali Commission might improve their programs. They believe that different regions in Alaska have different infrastructure needs and that current programs may not match well with certain regions. * Informants noted flexibility, thoughtfulness, and knowledge of Alaska as among the Commission’s strong points. The Commission’s funding process is seen as less burdensome and more responsive than that of other government agencies. Denali Commission Benefits * Community members almost universally believe that Prince of Wales Island residents are better off as a result of Denali Commission investments in healthcare and other areas. * Nome interviewees said the Denali Commission plays an important role as a funding magnet and inter-agency coordinator. * The Port Lions experience suggests that communities that plan proactively and and reach common goals are positioned to maximize the benefits of the Commission. * Community members found that their needs aligned well with the Denali Commission project priorities and funding opportunities. * Without exception, informants believe that Denali Commission funding has had a positive impact on the health and wellbeing of local residents and moreover, that many of those impacts would not have been possible without the Commission. The role of the Commission as a facilitator and coordinator of government programs is also widely considered important and unique. = Meetings with Lower Kuskokwim School District (LKSD) and YKHC identified program data that may help to demonstrate Denali Commission impacts. However, the site visit generally confirmed that numerical data on impacts is rare. Other Issues and Challenges * Apparent conflicts between SEARHC and representatives of Craig’s healthcare sector may have led to some planning and funding inefficiencies. "Perceived competition between healthcare providers in Craig and the Denali Commission-supported Alicia Roberts Medical Center (ARMC) remains an issue with some people in Craig. Because of this competition, and because of the greater federal government support required to operate ARMC, some informants believe the Denali Commission funding for expansion of the clinic was contrary to the Commission’s sustainability and private enterprise policies. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 50 * Denali Commission has supported projects and processes that will require additional financial support. Commission supported planning for the Craig healthcare campus will lead to a need for construction funding. Similarly, the next step in Commission supported planning for Klawock water supply improvements is construction funding. = Some interviewees questioned the Commission’s “distressed” and “non- distressed” criteria. Nome informants felt that these groupings did not account for middle-sized communities, such as Nome, which are not necessarily distressed communities themselves, but serve as regional hubs for surrounding, often distressed, rural villages. Golovin residents fear that their postal code, which is the same as Nome’s postal code, is a factor in the non- distressed categorization of their community. They feel that Golovin should be classified as a distressed community. = Golovin residents desire involvement and coordination in Denali Commission projects at the regional and local level to maximize local benefits and success. » A common concern expressed in Nome was the importance of strengthening village infrastructure and economies. Similarly, Nome wants to ensure that it can meet the region’s needs as a transportation hub, medical center, and supply center. Golovin residents remain concerned about erosion threats. * Residents desire further exploration of alternative energy throughout the region. Golovin residents are also strongly interested in future employment and training opportunities—especially if they are conveniently offered in terms of location, time commitment, and do not conflict with critical subsistence activities. * Though Kodiak is not a “distressed” community, it serves as the hub to a number of communities that are distressed. Interviewees suggested that it was important to consider its role as a central location for island-wide services and infrastructure development. " The fact that there are separate programs for health clinics and multi-use facilities may have prevented some project synergies in Port Lions, where both types of facilities were necessary, but are being approached individually. * The six rural villages on Kodiak Island undertook community planning processes at approximately the same time frame, with centralized assistance from a consultant paid for by the Kodiak Island Housing Authority and some of the communities. The planning process helped the communities identify shared concerns and issues, and resulted in cooperation and synergy between the communities. * Many informants cited as an issue the distance between Anchorage and the villages, both in miles - which makes face-to-face meetings fairly rare - and in perspective and awareness. Recurring themes were that the situation and needs in every community are unique and that strategies by all agencies to meet them effectively and efficiently should make heavier use of local and regional knowledge and experience. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 51 Meetings in Kwethluk and Napaskiak - though only 15 miles apart — revealed very different approaches to local development. One was focused around joint meetings of the tribe, city and corporation and the other was driven by a strong tribal organization. Residents of both villages reported that city-tribe relationships had gone through periods of considerable strain. If these villages are any indication, the capacity of organizations within the same community to understand and respond to the policies and requirements of the Commission vary widely. Meetings with two local non-profits in Bethel - Tundra Women’s Coalition and Yuut Elitaurviat — highlighted substantial differences in their challenges, capacities and areas of expertise as compared with the larger organizations that more typically implement Denali Commission projects. Both these smaller organizations are highly regarded in the community and considered to be very important to the region. However, they must look to outside expertise to plan and manage construction projects, for example. Energy Project Impacts The Black Bear River South Fork hydro project significantly reduced use of diesel generators on Prince of Wales Island. Hydaburg reduced its annual diesel use from approximately 130,000 gallons to approximately 2,000 gallons. A distribution system upgrade on Prince of Wales improved safety and reliability by replacing sub-standard equipment. A planned wood-fired boiler project in Craig could save the City $40,000 to $90,000 per year in fuel costs. Nome’s generator and power distribution upgrades received a total of about $7.5 million in Commission funding. The projects are not complete, but anticipated benefits include better location away from the flood plain, compliance with emissions and other standards, more reliable power, and expected lower maintenance cost. The additional capacity supports development projects such as the new hospital, local mining and seafood processing. Bulk fuel, generator and distribution upgrades in Golovin will total $3.3 million in Commission funding. Construction costs were reduced by coordinating materials for the upgrades. The new storage tanks are located to facilitate delivery, but are also in danger from flooding, according to residents. New generators were first installed at ground level, then raised to avoid flood damage. Some residents were frustrated that outside contractors were used for construction. There have been minor problems with some of the new equipment. Residents of Port Lions say a bulk fuel facility upgrade is more efficient, provides marine access, reduces the likelihood of spills and increases the working life of the facility, as well as creating a feeling of pride in the community. Some elements of the design may have exceeded community needs. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 52 Health Project Impacts * Expansion of the ARMC in Klawock met a pressing need for emergency care services and, by doing so, allowed the small Craig Clinic to operate more sustainably. However, the ARMC falls short of meeting the area’s long-term needs, and the Commission has funded design of an additional facility in Craig. In the process, local and regional interests have demonstrated conflicting views of what the optimum set of facilities and providers should be and one private business has objected to unfair competition from a Commission-funded facility. » A new regional hospital now being planned for Nome will replace an older facility. Residents anticipate that the new hospital will make it easier to attract and hold doctors and staff and reduce travel outside the community for care, in addition to providing temporary construction jobs and some permanent new positions. Some residents are concerned that the facility may be too large for the needs and resources of the community and that doctors and staff who are not part of NSHC will have trouble accessing it. * A new clinic in Golovin replaced an old, dilapidated structure that had poor equipment and offered little privacy to patients. Residents say they are able to retain staff better and may be able to attract a physician’s assistant. Residents say the project meets community needs well but have a few concerns. The clinic was centrally located for access to water and sewer. This means it is less private, somewhat hard to access for wheelchairs or stretchers, and close to the town’s flood zone. Residents are also concerned that the community cannot support the clinic financially and that the current operator, NSHC, may not continue to operate the clinic. Maintenance of the facility has proved expensive due in part to lack of trained local boiler and other technicians. * Approximately $500,000 in healthcare equipment for Providence Kodiak Island Medical Center has improved access to care (mammography, x-rays, and CT scans) and reduced transportation costs to Anchorage for patients by an undetermined amount. * A new clinic in Port Lions exemplifies cooperation among entities. Community planning was based on the Commission’s templates and processes. The Native Village of Port Lions coordinated the project with the Commission. The tribe partnered with Afognak Native Corporation, which donated the land. Tribal staff prepared a business plan with assistance from ANTHC. Kodiak Area Native Association (KANA) will operate the clinic, with partial funding from the IHS. Quality of care is expected to improve significantly. The community considers Commission funding to have been key to the project. Training Impacts * Craig and Klawock have benefited from two local Commission-funded training programs: Inter-Island Ferry Authority (IFA) equipment training and a combined waste and wastewater operator training, heavy equipment operator training, and project manager / supervisor training. * Nome has benefited from an number of training programs, including National Center for Construction Education and Research (NCCER) instructor certification and training for welders, mechanics, heavy equipment operators and pipe fusers. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 53 Impacts of Other Projects A solid waste project in Klawock allowed the city to stop depositing raw waste in its landfill. Current rehabilitation of Klawock’s senior center will include eight new housing units and expanded dining facilities. Communities in all site-visit areas have received IAID program community profile maps, but the impact of those maps is not yet observable. On Prince of Wales Island, a small ($20,000) grant for safety equipment for the Inter-Island Ferry Authority (IFA) supported crew fire-safety training that was also funded by the Commission. The Commission provided $1.8 million of a total $3.7 million for a hostel to house patients who travel to Nome for care at the new hospital. The hostel should reduce transportation costs and improve family support for patients. Smaller grants funded security measures at a domestic violence shelter. The basic provisions, such as deadbolts and security cameras should make residents and staff safer. A solid waste equipment grant in Kodiak allowed the private recycled-waste operator to process 17 percent more product with safer working conditions. Renovations to the Kodiak Women’s Resource Center extended the working life of the building and improved safety and morale. Heating costs are expected to be lower. Port Lions used two solid waste grants to reduce bear mortality and danger to residents by purchasing dumpsters and a truck and installing electric fencing. A small grant also funded a dock feasibility study that will help the community to plan and fund either repair or replacement, depending on study results. Training Program Survey Themes (See Section 6.3 for more detail.) Nearly all trainees said they gained new skills, the ability to do a better job or a better understanding of their current job. Most trainees were able to get a job, a better job or take on more responsibility because of the training. Trainees were able to get a promotion or make more money. Respondents often commented that the training had given them greater confidence and had improved the prospects for them and their communities. Some trainees said they valued the training, but had not been able to find employment. Some respondents blamed lack of local employment opportunities, and some said that even with the training, they could not find work without a high school degree. A few respondents said that although the training had enabled them to find local work, they were concerned that they were the only person in the community qualified to do necessary facility maintenance and other tasks. Very few respondents expressed dissatisfaction with the training methods or curricula. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 54 Observations by Representatives of Training Provider Organizations Except where placed in quotes, the following comments are paraphrased from interviews with representatives of the Commission’s major training-partner organizations. How clear is the Denali Commission’s approach to approving training programs? Do the Commission’s priorities and policies make sense? Interviewees said the Commission’s priorities and policies make sense in relation to their mission and the training needs for rural workers, particularly training for health, energy and infrastructure construction, operations and maintenance. Most said the approval process works well and that the grant application is simple, user-friendly and far less cumbersome than, for example, a state application. However, one interviewee said that the proposal for funding took a great deal of time to complete and they had not received either a template or much guidance from the Denali Commission on developing the proposal. Some said that delays in funding sometimes affected planning and schedules for training programs. What's good about working with the Denali Commission? One interviewee said, “The Denali Commission is a good partner for workforce development and more effective than any other agency in Alaska.” Another called the Denali Training Fund a “top performing workforce investment program.” Interviewees said the staff and commissioners are focused on their mission, goals and objectives and are supportive, helpful and forthcoming with information. Interviewees said the Commission staff has developed a good relationship with DOLWD to administer the grants. “Denali Commission staff are accessible, thoughtful, and flexible as well as being very open to new ideas and very clear about what they expect. Their knowledge of rural Alaska is one of their strongest points.” Many interviewees noted that the training programs they have been able to implement would not have been possible without Denali Commission funding. As an example of the Commission’s ability to innovate by building on an established framework, a respondent cited the Commission’s decision two years ago to provide funds for a competitive grant for younger Alaskans, aged 17-24, to provide them with career awareness, vocational training and employment so they could gain work experience and learn about various career paths. How do Denali Commission training programs differ from other training programs that your agency offers? Commission-funded programs focus on rural residents. Interviewees said this can make the impacts more significant than those of broader programs. For example, Denali Commission has partnered with the largest federally registered apprenticeship program for construction in rural Alaska, the Building Maintenance Repairer Apprenticeship program. Respondents also said Denali Commission programs are more flexible and less expensive to administer than state-sponsored programs and other federal workforce programs administered by the state. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 55 Are there specific challenges associated with implementing training programs in rural settings as opposed to urban settings? Providing skills training is 3 to 4 times more expensive in rural Alaska as a result of travel and shipping costs, according to one interviewee. Costs include air and ground transportation costs for students and instructors, shipping costs of tools and materials, and meals and housing during training. With rural training, there are more logistics to consider, including challenges associated with scheduling training based upon space availability; communicating with trainees, instructors and employers; making travel arrangements; weather; and follow-up after training. Finding and developing qualified instructors to work part-time and travel away from home for extended periods poses its own set of challenges. There is also a need for insurance because of many potential liabilities (potential for injury during hands-on tool training, etc.). Respondents said the Denali Commission understands these obstacles and barriers better than many other grant programs. In the case of UAA Allied Health, interviewees said that there are many challenges associated with implementing online distance-learning programs. For example, it is often challenging to keep students informed and. engaged when there is no face-to-face interaction. Do you track the impacts of training programs over time in terms of income levels and employment? DOLWD tracks all training programs for which it administers funds. Alaska Works has done a great deal of research on training program impacts. They have conducted several short and long-term outcome studies. They have been able to track trainees over time to assess employment and income levels. They report dramatic increases in trainee income levels following training and associate this with poverty reduction. UAA Allied Health, tracks the number of people completing training but does not track employment and income following training apart from the quarterly tracking performed by DOLWD What's difficult about working with the Commission? Are there Denali Commission policies that have presented unusual challenges? The Denali Commission funds for training are restricted to rural residents. However, the line between rural and urban is beginning to blur. Many rural residents are coming to urban centers for training. The policies regarding serving rural clients should be flexible to recognize the influx of rural residents to urban centers due to the high costs of fuel, fewer jobs, etc. in rural Alaska and the ever growing opportunities for services, training and employment in urban centers. How has information-sharing, joint coordination and communication between your organization, the Commission and other funding agencies changed since the Denali Commission began? Information sharing, joint coordination and communication between agencies and the Denali Commission started out good and have improved due to ongoing relationships that are very responsive to one another’s needs. Communication between agencies is reliable, timely, and without conflict. As a result, interviewees said they are able to work together more effectively to make improvements to Denali Commission funded training programs. “It has been easy to make improvements and implement new programs.” Interviewees also said communication and relationships with Tribal Health Consortiums have improved as a result of working together on training programs funded by the Commission. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 56 5.4 Effects of Policies Overview This section addresses seven “policies” of the Denali Commission. The policies are: * Sustainability = Private Enterprise * Cost Containment = Open Door «Investment * Business Plan Requirement * Community Plan Requirement Though founded on sound assumptions and experience, the policies above represent a confusing mix of principles and guidelines. Further, Commission literature gives no clear indication of what a “policy” is, and only two of those above — Investment and Private Enterprise — are written in a standardized format. Several policies contain elaborate and complex considerations with no clear guidance on how they are to be applied. Some policies, such as Open Door, were created to address the needs of just one program. Some, such as Private Enterprise, have a general formulation, but specify particular conditions for particular programs. Other policies, notably Sustainability, have been fundamental to the Commission’s work since its inception and have broadened and evolved in application. Interpreting the policies is further complicated by the existence of other related, but program-specific, policies such as the Energy Project Design Capacity policy and the Energy Project Prioritization policy (both adopted April 26, 2002). Further, the Cost Containment Policy for Energy Projects includes a detailed set of cost control procedures provided mainly, it appears, as a guide for the Commission’s energy partners, rather than to influence the actions of Commission program staff. Some policies are applied fairly consistently across programs while others vary in the way they are interpreted and used. The policies are closely related to, but not identical with, portions of the Commission’s “guiding principles” also listed in Section 4.1. (Implementation of Denali Commission policies by individual programs is described in the relevant portions of Section 6.) The reader should also keep in mind that: * Local residents interviewed for this review revealed highly variable levels of familiarity with Commission policies and procedures. Few could speak to the Commission's broader policies. Many had only worked with partnering organizations and therefore lacked direct experience with the grant application and approval process. * The relatively recent emergence of the Commission on the rural development scene means that a great many projects are recently or not yet completed. This makes it difficult to draw conclusions about the relationship between policies and projects. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 57 Sustainability Policy Development The Denali Commission has made sustainability a key consideration for infrastructure provision. In 2001, The Commission’s Resolution 01-15 outlined a basic rationale for, and approach to, sustainability as a “core value” and a “guiding principle.” Since then, the Commission has produced a great deal of discussion and description with respect to sustainability, some of which has influenced the Commissions other policies. In fact, Resolution 01-15 contains elements of the Cost Containment policy, the Private Enterprise policy and the Business Plan requirement. Nevertheless, different programs have applied the principle of sustainability differently. No single, clear policy exists, though elements such as minimizing cost and mitigating environmental threats pertain generally across programs. In April 2002 the Commission adopted “Criteria for Sustainability” with respect to energy infrastructure, and called the criteria a policy. The document does not define sustainability as a condition, but lists two sets of detailed criteria — pertaining to 1) bulk fuel facilities and 2) electric utility systems. The document says that failure to meet the criteria “will result in the transfer of project assets to an agreed upon ‘Secondary Operator’ to protect the assets and provide sustainable service.” The Commission has discussed implementing this secondary-operator provision for several projects, but has never done so. In 2003, soon after release of a major, Commission-funded study on the topic by ISER', the Denali Commission signed an MOA Re Sustainability of Rural Power Systems with the AEA and the Regulatory Commission of Alaska. The MOA expresses a commitment on the part of the signers to reduce energy cost and increase reliability. Its primary purpose, however, seems to be to establish formally the secondary-operator mechanism described above for facilities not being operated “in a sustainable manner.” In 2004, the Sustainable Utilities Work Group said, “The Denali Commission has defined ‘sustainability’ on two levels — conceptual (must be able to cover operation, maintenance, renewal and replacement costs) and project specific (business plan balances revenues and expenses) bases.”'° This is the only definition identified during the review that says what sustainability is without using the word “sustainability.” However, the statement begs two questions: = How realistic are the assumptions underlying the business plan? = What happens if the business plan is wrong? In 2005, Governor Frank Murkowski issued Administrative Order 224 to “provide a framework for cooperation that enhances collaboration between the State of Alaska and the Denali Commission by providing a common definition of sustainability.” The order says the collaboration will apply to essentially all Denali Commission programs. However, the convoluted language of Administrative Order 224 does not define sustainability. Rather, the order echoes or re-states a number of Denali Commission operating principles, such as business planning and minimizing lifecycle costs and project size. It also reiterates Resolution 01-15 in saying that users should support costs “to the extent possible.” Finally, Order 224 says that “new facilities will be protected against imminent environmental threats.” ' Sustainable Utilities in Rural Alaska, Institute for Social and Economic Research, 2003. '* Consolidated Report, Work Groups — Denali Commission MOU, November, 2004. Denali Commission Program and Policy Review McDowell Group, Inc. +» Page 58 Perceptions of the Policy While the concept of sustainability as a goal is widely supported, community and key informant interviews reveal considerable confusion and frustration over how the term is defined and applied by the Commission. Further, while the Commission tries to limit sustainability considerations to projects, their implications are inevitably larger. Specifically, can one have a sustainable project in an unsustainable community, and, if not, what is a “sustainable community?” The Commission’s requirement to demonstrate sustainability presents different challenges to different types of funding applicants. Projects that will be operated by large program partners such as regional health corporations or AVEC typically pass the sustainability test relatively easily. These partners know how to prepare a business plan, and they have operating histories that strongly suggest they are “sustainable.” Individual communities, however, may confront stark choices. For example, one local official, knowing that funding for a badly needed project depended on a business plan demonstrating financial sustainability, reportedly asked, “Should we lie?” Often, the biggest local hurdle to sustainability is the requirement that business plans show that operating or other identified revenues will fund a reserve for renewal and replacement (R&R). Many rural development experts and_ local residents believe this is an unrealistic requirement for villages that depend heavily on non-cash (subsistence) economies. Many also believe that villages should not have to assume heavy financial burdens in order to obtain basic facilities for safety and sanitation. At the same time, many interviewees expressed a belief that communities must have an economic stake in their infrastructure to assure that 1) they will take care of it, and 2) federal, state or other government entities will not face a burgeoning inventory of unfunded infrastructure projects as new facilities age. Analysis Examination of the Sustainability Policy suggests a number of issues: * Perhaps most serious issue is that interviews and other research indicate that little or no provision exists to assess the long-term impacts on communities of financially supporting multiple infrastructure projects, even though individual projects may seem sustainable. This includes multiple projects funded by the Commission, and projects funded by other agencies as well. * Commission documents give no clear indication of how program managers are to apply the sustainability policy. Some programs, such as Economic Development, have no clear direction on whether to apply it at all. Others, such as Health, depend mainly on program partners to assure compliance. Finally, the Energy program has many specific criteria that are so complex they are very challenging to use. * No programs have reliable mechanisms for tracking sustainability after construction is completed or for intervening in situations where sustainability might be in jeopardy. » An extension of the need for understanding the impacts of multiple projects is the need for a process by which to prioritize projects within an economic development strategy. Committing funds to infrastructure limits communities’ capacity to engage in other development activities. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 59 The Denali Commission (and Village Safe Water and similar agencies) build infrastructure that improves the health and safety of local residents. But, if local residents were asked which is more important for their village to have first, a washeteria or a business activity (a lodge, fishing business, government services, for example) that could bring income to the community, interviews suggest that many would opt for the latter. Private Enterprise Policy Development Whether and how government services may impinge on the private sector is always an issue. The Private Enterprise policy says, in essence, that the Commission will not intrude in a market that serves the public well, but will do so where private enterprise cannot or does not “provide needed services at an affordable price.” It begins with a “General Policy” that consists of a cursory argument for the provision of public goods in the absence of functioning markets. Then a “General Provisions” section asserts the Commission’s right to intervene where private enterprise does not meet the Commission's goals for access, price and availability. The policy goes on to say that private enterprise will not be impeded, unless the Commission thinks the public benefits to be derived warrant government action. For example, the policy says, “The existing market share balance among retail fuel suppliers within a community may be significantly altered as a result of Denali Commission funding only if all of the affected retail fuel suppliers currently operating in the community agree to it or if such alteration is deemed necessary to facilitate competitive conditions in the community” (italics added). Finally, the policy calls for comparable levels of investment in project costs from each retail fuel supplier, if any are involved, and states that facilities so funded will “generally be owned by a local government entity...” that may lease to or contract with private suppliers. Full responsibility for implementing the Private Enterprise policy is assigned to the Commission’s partners. Perceptions of the Policy Site visits and discussion with Commission staff indicate that application of the private enterprise policy is often informal. The Commission does not use specific thresholds or controls to judge either the impact of projects on the private sector or the potential for misuse of project infrastructure by the private sector. Rather, implementing the private enterprise policy is a process of general discussions and observations aimed at identifying potential local issues. Much of this process is delegated to the Commission’s program partners, since they are often the primary point of contact for projects in the field. Field observations for this review found little evidence of Denali Commission projects creating unfair competition with the private sector. For many grants the issue does not arise since grant recipients are often the only service providers in the community. However, a resident of one site-visit community voiced strong opposition to a Denali Commission grant on the grounds of competition with his business. The resident said the Commission relied on the advice of an advisory panel in making its determination to fund the project and noted that for-profit providers were not represented on the advisory panel. Denali Commission Program and Policy Review McDowell Group, Inc. +» Page 60 Analysis The main concern about the Private Enterprise policy is its vagueness. The policy’s language places Commission staff in the position of determining when existing markets are acceptable and when they are not. Coupled with the fact that there are no formal procedures for implementing the policy, this would appear to invite conflict. The fact that relatively little conflict seems to have occurred likely reflects the extremely rural nature of most project sites. In addition to unfair competition, the Private Enterprise Policy briefly addresses the potential for publicly funded projects to provide excessive advantage to a single private business, a risk primarily associated with economic development grants. If this type of situation exists, uncovering it would require a process more akin to the Inspector General audits than to a broad program review. However, grants such as the $14 million contribution by the Denali Commission to the North Douglas power inter-tie in Juneau (which, although designed eventually to serve the community of Hoonah, also significantly benefits a local mine) suggest that analysis of this type of potential is a prudent activity. : Cost Containment Policy Development The Cost Containment policy was originally drafted for Energy Projects, but has since been applied to other programs. The stated rationale for the policy is rooted in sustainability and tied to community planning: “All Denali Commission projects are to be sustainable, and that requires examining projects on a life-cycle-cost basis in the context of the Community’s long-term development plan.” The policy articulates five criteria: " Cost-effective designs * Need-specific designs = Competitive procurement = Effective project management * Maximization of benefit / cost via project selection The criteria apply both to the Commission and to its partners. In many cases, it is the latter that has the most control over costs. The two main cost-control tools employed by the Commission for health projects are clinic size-guidelines and construction- cost benchmarks developed for the Commission by NANA Pacific with respect to housing, washeteria and clinic construction. The Commission has asked the firm to update and expand its guidelines.'” The Commission also has an extensive record of costs to guide tank farm installations. "’ Personal communication from Denali Commission staff. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 61 Perceptions of the Policy Key informants stressed that overall life-cycle cost is especially dependent on design and ease of maintenance in rural Alaska, while the most critical factor in construction cost is often timing. Materials must be moved, staged and used as seasons permit. There is little flexibility and little warning when conditions change. Funding delays that affect purchases by even a few weeks can mean the difference between building one year or next year. When equipment and crew have been staged on-site in rural Alaska, a delay in materials availability can be very expensive. Commission staff say some of the cost benchmarks currently in use are not accurate and that the methodology used to develop them needs to be revised. Finally, some informants wondered about the impacts of using force account (local) verses union labor. For example, do projects receive better long-term financial support and general care — and therefore last longer — if they are constructed by local labor? Analysis The concept of cost containment is certainly an appropriate one for an infrastructure development agency to address. The types of criteria in the policy seem to reflect both past Commission experience and the basic principles of cost control, such as competitive pricing and benchmarking. The last criterion, maximizing public benefits, is problematic since Commission projects are not prioritized for approval on the basis of public benefits per dollar of cost. If they were, very small communities would have little access to funding. The Private Enterprise policy is more subtle in this respect, requiring only that projects show “substantial” local public benefit. In practice, it is impossible to say to what extent the Commission’s approach to cost- containment has caused projects to be designed and built more cheaply. It would require detailed auditing during and immediately after construction to establish the major cost variables and whether costs were truly minimized. A subset of this analysis, beyond the scope of this review, might examine the history of projects where a second or third round of funding was required to bring the project to completion. Finally, the Commission’s Inspector General has raised the issue in his monitoring reports of whether local communities are making reasonable contributions to the costs of construction and, alternatively, whether they sometimes charge grants excessively for goods and services they provide. This assessment found no direct evidence of the practice. However, it is not a situation the assessment methodology is designed to uncover. Open Door Policy Development The Open Door policy was developed specifically for healthcare facilities. It requires them to be open “at a minimum... to anyone who can pay for ... services.” The policy reflects important legal differences between general federal funding, which must be distributed without regard to race, and tribal funds such as those appropriated to the IHS, which are specifically designated for tribal beneficiaries. Denali Commission funds consist of the former. The concept of Open Door is also applied to multi-use facilities and is stipulated in business plans for those projects. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 62 Perceptions of the Policy Site visits and community interviews identified only one instance where the Open Door policy appeared to be an issue. An informant noted that the community’s new clinic will be required to follow the policy though the previous clinic did not operate that way. The implications of the Open Door policy for new clinic operations had apparently not been considered during the application process, and the community had some concern about how the clinic would manage financially, since it had been THS-funded but would now have to serve a fairly large non-Native population. Analysis The regional healthcare providers interviewed said that complying with the Open Door policy does not present a problem for them. Open Door is a potential issue for providers that are not equipped for third-party billing (i., to private insurers, Medicaid or Medicare). Adding that capability presents challenges for a small, locally operated clinic. Further, Medicare reimbursement rates are often criticized as not covering the full cost of service in Alaska. The DHSS Primary Care Office reports that access to healthcare among rural non- Natives has improved significantly in recent years. Key reasons for the expansion are the Denali Commission programs and growth in the federally funded Community Health Center Program, which helps fund 72 sites statewide. Program managers for other Commission programs, besides Health and Multi-use Facilities, say they are mindful of the principle of Open Door, namely that the public benefits of any facility are greatest when access is unrestricted. Program staff do not monitor projects after construction for compliance with the policy, relying on individuals or partners to identify instances where compliance may be in doubt. Investment Policy Development The Commission’s Investment policy is an extension of sustainability. The policy says the Commission will invest limited funds in order to maximize benefits to rural Alaskans.'* However, the ten factors the policy takes into consideration are complex: 1. Imminent environmental threats Priority on existing communities Regional support for project Proximity /access to existing services and/or facilities Renovation priority over new construction Affordability Per capita investment Unit cost 2 3 4 5 6. Population trends 7 8 9. 10. Good faith 'S Denali Commission Investment Policy, April 2004 Denali Commission Program and Policy Review McDowell Group, Inc. * Page 63 Perceptions of the Policy Those interviewed in communities were not familiar with the Investment Policy. Field observations with respect to specific Investment policy factors include: " Funded infrastructure projects in the site-visit communities appear to be appropriately sized for recipient communities. * Based on its site visits, the McDowell Group has some concern that residents of Kwethluk, Golovin, and Napaskiak will not be able to afford to fund the total life-cycle costs associated with all Denali Commission-funded projects in those communities. * Residents of Kwethluk are concerned that their new tank farm, along with their school, is in danger from riverbank erosion (environmental threat). Analysis The Investment policy factors represent valid concerns, but the policy doesn’t do what investment policies typically do, namely identify the relationship between risk and return that the Commission wishes to target. Neither does the policy define the return being sought nor say how the Commission balances a project’s profile on one investment factor with that on the others. For example, the policy says, “Consistency with a regionally approved plan is a factor lending strength to investing in a particular project.” Does that mean that priority will be given to communities where there is a regional plan? Or just that an applicant should have a plan (something already addressed in the community planning requirement, below). Similarly, the policy says, “The Commission will evaluate applicants’ capacities to afford the life-cycle costs associated with sustaining proposed services and/or facilities...” But the policy doesn’t say on what basis capacities will be evaluated or how the evaluation will affect funding decisions. Finally, one investment factor is “per capita investment.” That section says the Commission “will compile and review ... data to ensure that there is reasonable equity in the distribution of funds across all rural Alaska communities.” If “reasonable equity” means that every community deserves similar per capita funding, then does the policy mean that the Commission’s $1.7 million investment in power and fuel for Stony River’s 42 residents implies a budget for Unalakleet of $28 million and for Prince of Wales Island, $160 million? There is no assurance that applicants who comply with all the factors will receive funding priority. Staff say they use the policy to help them identify “red flags” associated with an application. The Economic Development Program uses a checklist to identify areas of compliance or non-compliance, but it does not apply a score to applications on that basis. The policy also notes it is not to be interpreted as inclusive: “The Commission will consider all available information regarding each of the factors identified above and any other relevant information in making investment decisions” (italics added). Neither the Commission nor its partners formally document the extent to which applicants comply with the ten factors. However, some programs ask applicants to address the policy in their business plans. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 64 Business Planning Policy Development One of the provisions of the Commission’s Resolution No. 01-15 in September 2001 was to require written business plans for infrastructure projects. In most cases, applicants are required to use an approved document template. The templates differ from program to program. In 2003 the Commission joined six other agencies plus RUBA in developing a business plan template and guidebook for rural Alaska utilities.’ * However, none of the Commission programs appears to use the format described in the guidebook. Perceptions Former Commission staff and other rural development experts tended to agree that: Community and business planning are valuable exercises for communities and the plan templates developed by the Commission are better than those of most other agencies. Expecting residents of rural villages to prepare technically demanding business plans is unrealistic. Successful business plans are often associated with a single individual who understands the business and/or is particularly dedicated. Beyond the specifics of the plan, informants point to community buy-in as key to success. Many business plans are prepared by consultants or project partners with local input, but little local involvement in strategic or long-range thinking Field observations confirmed that some communities have found the business planning requirements challenging, burdensome and inconsistent. Analysis The concept of a business plan requirement has widespread support. However, implementation of the requirement faces significant challenges: Plan templates have been criticized as too complex and technical for village residents to master. Where multiple agencies require different plan formats, the requirement may be very burdensome for applicants. A business plan developed by a consultant with limited local participation is unlikely to be of much value, either to the operator or the Commission. Commission staff and others say a high level of community involvement is key to the success of most projects. Assessing the quality of a business plan and, later, whether it is being well used, typically requires substantial local knowledge not always available to Commission staff. " Business Planning for Rural Alaska Utilities by Sandra Wilson of Wilson and Wilson C.P.A.s in Fairbanks. Published July 2003. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 65 * Business plan monitoring is infrequent and provisions for the Commission to intervene in facility management are unrealistic. For example, the Energy Program’s provision for imposing a “secondary operator” if the grantee fails to perform successfully has been criticized as unworkable and has never been imposed. Community Planning Policy Development As of January 2005, Denali Commission funding requests were required to include a community plan showing that the project had been identified as a priority by the community. Because of pre-existing program requirements, including requirements by federal agencies that provide funding to the Commission, different programs apply the community planning policy in different ways.”’ Energy Program - bulk fuel upgrade and power plant upgrade project priorities are based on condition surveys. Applications after 2004 must include a community plan. Health Program — Post-2004 applications are subject to the plan requirement in order to move beyond the conceptual planning stage. Projects serving regional populations — for example, behavioral health and domestic violence projects — may be required to demonstrate broader planning covering the whole service region. Multi-Use Facilities — Post-2004 applications are subject to the plan requirement except for conceptual planning grants. Mini-Grants — May be used to develop a community plan. Solid Waste — Post-2004 applications are subject to the plan requirement. Washeterias — No new funding since the requirement became effective. Proposals forwarded through VSW must have a community plan or, in some cases, an infrastructure / water and sewer master plan. Teacher Housing — Post 2004 applicants must demonstrate that the project is a priority in a local community plan, but may not have to submit the plan document, itself. Elder Housing — Similar to Teacher Housing. Transportation — Post-2004 applications are subject to the plan requirement. Other Programs - Other Community Development Programs (Alaska Growth Capital, Initiative for Accelerated Infrastructure Development (IAID), Alaska Marketplace, Micro-loans) do not require a community plan. Perceptions Interviews with community members, Commission partners and other experts show strong support for the practice of community planning and its use as a prioritizing tool for project development. At the same time, several interviewees pointed out that communities that have the greatest need for funding are also the least likely to have the capacity and expertise to develop sound plans. Some thought that this issue has not been sufficiently addressed by the Commission. *’ Denali Commission document: “Community Plan Requirements.” Denali Commission Program and Policy Review McDowell Group, Inc. + Page 66 Analysis Because the community plan requirement began in 2005 and was not applied to projects already in the planning or construction phase at that time, few projects completed as of the end of 2006 were subject to it. Anecdotal evidence suggests the community plan requirement is useful. For example, one solid waste project has been criticized locally as being initiated and defined to meet the needs of the waste facility operator rather than those of the community, resulting in a project that may be more costly than necessary. If properly prepared, community plans may also prove useful in identifying how the combined carrying cost of multiple projects is likely to affect local residents and organizations. They also may be helpful in av oiding situations, described by some interviewees, where projects have been built even though supporting infrastructure necessary to operate — for example, water, sewer or sufficient power — is not in place. Distressed/Non-distressed Designation Policy Development The “distressed/non-distressed” designation is not considered by the Commission to be a policy. Its original purpose, as a guide to the capacity of communities to provide matching funds for health projects, is specified in statute. A “distressed” community is required to provide up to a 20 percent match for Denali Commission clinic-construction funding. A “non-distressed community is required to provide up to a 50 percent match. The criteria have also been applied to multi-use facilities to determine community match requirements. A “distressed” community, as updated in 2006, is defined as meeting all three of the following thresholds: 1) Per capita market income no greater than 67 percent of the US average, 2) Poverty rate 150 percent or greater than the US average, and 3) 3-year unemployment rate 150 percent or greater than the US average. Alternatively, a community may have twice the US poverty rate and qualify on one of the other three indicators. Perceptions The “distressed, non-distressed” designation was identified as a source of frustration by some local residents interviewed during site visits. This was especially true in hub communities that are classified as non-distressed but serve residents from nearby distressed communities. Analysis In the study team’s opinion, the designation has evolved inappropriately into a kind of ad hoc tool for prioritizing funding and even assessing impacts (in the General Accounting Office’s Program Assessment Reporting Tool (PART) evaluation of the Commission, for example). Since the criteria are all concerned with employment and income, they may say something about a community’s capacity to raise matching funds. However, they fall far short of a complete picture of community health and resilience, economic or otherwise. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 67 Further, the cut-off points are arbitrary. Classification of communities by the distressed /non-distressed criteria is highly susceptible to small changes in the cut- off points, as demonstrated by analysis performed in 2006 by DOLWD. The analysis shows that a relatively minor change of plus or minus three percentage points in one or more of the criteria would result in reclassification of 32 communities from non- distressed to distressed. Most rural Alaska communities are “distressed” by any standard that might be applied to the rest of the nation, in part because they rely on subsistence harvests that are under growing pressure from climate change and development. While there are meaningful differences between what, in Alaska, are informally termed “higher functioning” and “lower functioning” communities, those differences are not captured by simple employment and income measures. General Policy Conclusions The following comments are the opinion of the study team in response to questions raised by the Commission at the beginning of the review process: Do policies result in a good match between funded projects and community needs? = The question is difficult to answer because, as a whole, the Commission’s completed projects do not represent the impact of consistently applied policies. This includes the policy most basic to the Denali Commission’s approach, sustainability, since little information exists about the operating and financial performance of completed facilities. = Site visits show that community residents often do not know or do not agree about how well projects match community needs. The community planning requirement appears to be well founded, as business planning alone does not ensure a good understanding of community needs. * A related issue is whether the Commission can do more to align the goals and incentives of its program partners more closely with those of the Commission and the local community. Evidence that alignment may be an issue is annecdotal and inconsistent. However, analysis of grant documents suggests that formal controls to assure alignment are limited. * Various community planning models have been used around the state. For example, Kodiak Island Housing Authority supported a well-received community planning process in four of six of the small villages on Kodiak Island. That process was explicitly intended to support community partnerships with the Denali Commission. However, site visits suggest that community planning is generally most effective when it is not influenced by the prospect of any particular funding. * No evidence was found that communities or the Commission have engaged in analysis of the impact on communities of multiple projects that are all designed to be primarily user-supported. It is possible that this type of analysis is performed by program partners when they intend to operate a facility themselves. If so, however, the results apparently are not shared outside the partner organization. Few local informants were able to discuss how Commission projects as a whole had affected community sustainability. A local clinic administrator, for example, might be unaware of a local energy grant, and vice versa. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 68 Do policies increase the positive impacts of funded projects? * Interviews with representatives of communities, partners, and government indicate that the concept of sustainability, and its implementation through business planning, are widely regarded as legitimate and useful, provided the business planning is realistic. * The following all suggest that the policies need to be coupled with more systematic means to conduct follow-up monitoring and to take corrective action when needed * AEA business plan monitoring reports suggest that the capacity of local entities to implement sustainability criteria over time varies greatly from community to community. (The AEA monitoring was of energy projects, but the finding likely applies to all types of infrastructure operations that rely on local organizations for both management and maintenance.) ¢ Similarly, community interviews and site visits suggest that the financial performance of funded facilities and/or the entities that manage them varies widely. The review did not include systematic analysis of financial audits, which, in any event, are not available for many projects. * Community interviews and site visits suggest, and executive interviews support, the idea that project sustainability in most small villages may depend, at one extreme, on complex relationships between, for example, city and tribal entities. At the other extreme, it may rest heavily on the skills and dedication of a single person. Both situations dramatize the dynamic nature of sustainability, which, in turn, argues for active, ongoing monitoring. Do policies have unrealistic requirements or unintended negative consequences? = Interviews at all levels raised questions about how realistic it is for the Commission to require small village operators to fund replacement reserves from operating revenues. Several key informants said the requirement should be dropped. * The Commission focuses on sustainability at the project level, as evidenced by the definition developed by the Sustainable Utilities Work Group. However, in small communities, the financial performance of a_ facility cannot be assessed independently from the economic health of the community. * It would be helpful to partners, communities, other funders, and evaluators if there were a more explicit model of what sustainability means at the organizational, community, regional, and statewide levels. What defines the degree of risk the Commission is willing to accept? What aspects of sustainability — financial, mechanical, environmental, cultural, or other - will the Commission address, and who will address the remainder? The Commission, other agencies and communities would all benefit if discussion of the concept of sustainability were brought more fully into the public arena, for example: Denali Commission Program and Policy Review McDowell Group, Inc. + Page 69 * What does sustainability mean as it is used to refer to communities and regions, and what are the respective roles of human capital and infrastructure? * What are the expected stages and timeframes for projects and organizations to achieve sustainability and what is the role of subsidy, if any, during that process? * What are the key relationships between local and regional social- economies, and how are they affected by regional and statewide organizations? * How can we better understand the aggregate impacts of multiple projects on communities and regions? Denali Commission Program and Policy Review McDowell Group, Inc. * Page 70 SECTION 6: PROGRAM-BY-PROGRAM REVIEW 6.1 Energy Program Overview and Historical Funding The original mission of the Denali Commission Energy Program was to replace substandard bulk fuel tanks across rural Alaska. The Oil Pollution Act of 1990, imposed strict new standards for owners and users of bulk fuel storage facilities. The US Coast Guard declared it would no longer allow fuel delivery to communities whose fuel tanks were leaking or otherwise ‘contaminating the soil and water. These new standards were well beyond the reach of many rural communities and rural Alaska looked to the federal government for assistance. Since its inception, the Denali Commission has constructed more than 17 million gallons of code-compliant bulk fuel storage. The program uses statewide deficiency lists to prioritize bulk fuel and power generation/ distribution projects. Projects are managed by partner organizations that coordinate project funding requests based on available funding, readiness of communities to proceed, and the capacity of the partners.” In addition to the design and construction of bulk fuel facilities, the Energy Program also funds upgrades to community power generation and distribution systems and supports energy cost-reduction projects. The Commission works with Alaska Energy Authority (AEA), Alaska Village Electric Cooperative (AVEC), and other rural partners. Several alternative / renewable energy projects. have been constructed in conjunction with power plant upgrades or as stand-alone projects, including wind turbines, in-river hydroelectric plants and Alaska’s first geothermal power and heat plant. Since 1999, more than $337 million (about 48 percent of all Commission funding) has been allocated in support of energy projects. Program funding comes from Denali Commission direct appropriations as well as from the US Department of Agriculture Rural Utilities Service (USDA RUS) high energy-cost program, interest from the Trans Alaska Pipeline Liability Fund (TAPL), and the US Environmental Protection Agency (EPA). Table 6.1.1 Status of Energy Projects as of 12/31/2006 bay etc Power Plant Other Energy Projects Projects Projects* Design 38 18 n/a Construction 10 13 55 Complete 61 36 61 * There is no “design” tracking for “Other Energy” projects. They are tracked only as “in progress” or “completed” * Denali Commission Federal Fiscal Year 2007 Work Plan, May 31, 2007 Denali Commission Program and Policy Review McDowell Group, Inc. + Page 71 Table 6.1.2 Sources of Energy Program Funding Cumulative 1999 2000 2001 2002 2003 2004 2005 2006 Total Energy & Water Appropriations * $16,674,000 $14,000,000 $15,432,677 $12,720,870 $25,507,077 $28,192,335 $32,130,079 $39,425,000 | $184,082,037 TAPL Interest (Bulk Fuel Only) ** 5,475,967 11,335,881 11,360,874 2,486,876 4,273,720 4,252,043 4,227,257 43,412,618 USDA RUS High Energy Cost Communities *** - - 15,000,000 25,000,000 18,500,000 15,000,000 15,000,000 15,000,000 } 103,500,000 EPA (bulk fuel only) **** - - 3,000,000 2,980,500 3,479,400 3,968,000 - 13,427,900 Carry Forward (Admin) 2,568,942 2,568,942 TOTAL/YEAR | $16,674,000 $19,475,967 $41,768,558 $52,081,744 $49,474,453 $50,945,455 $55,350,122 $58,652,257 | $344,422,556 NOTES: * Energy & Water (Base) appropriation is actual amount of funding applied on awards without regard to rescission or administrative fee. ** TAPL and EPA funds are subject to 5% administrative fee. Rescission is shown in available funds for EPA *** USDA RUS funds are subject to 4% administrative fee and no rescission. **** $5 000,000 was reserved from 2000 funding for SE Intertie, issued on award in 2002, but shown here in 2000 funding column Source: Denali Commission program staff Denali Commission Program and Policy Review McDowell Group, Inc. + Page 72 Sources of Energy Program Data Information about the Energy Program was drawn from the following sources: * Denali Commission staff * Denali Commission program status reports, planning documents, and grant documents, including business and community plans relevant to selected projects * Published reports addressing rural energy issues * AEA business plan monitoring reports * AEA operating data * Audit reports filed by the Denali Commission Inspector General * Interviews with representatives of AEA and AVEC * Site visits, community interviews, and other key informant interviews Program and Project Goals Broadly, Energy Program goals are to make village energy systems safer, more reliable and more affordable. However, the bulk fuel program is designed to focus on the narrower goal of bringing non-code-compliant facilities into compliance. = Bulk Fuel - All communities will have code-compliant facilities = Rural Power System Upgrades — Improved efficiency and reliability = Other Energy — Lower energy cost (Projects differ. Some are intended to achieve immediate cost reductions, others are designed to explore the potential of new technologies.) Application of Policies Sustainability Criteria and conditions for project approval are specified in the Commission document: “Denali Commission Policy, Rural Alaska Energy Infrastructure, Criteria for Sustainability” (April 26, 2002). Energy business plan templates are designed to ensure that applicants address how they will meet the criteria. Energy Program documents say the Denali Commission will monitor compliance with the sustainability criteria. This includes a provision, not yet employed, to transfer operating responsibility or ownership of non-performing facilities to a so- called “secondary operator.” If facilities are identified as having trouble complying with sustainability requirements, the Denali Commission provides some financial support for training and assistance to facility operators, potentially including mentoring by the secondary operator, to meet the sustainability criteria. AEA has commissioned business-plan-monitoring site-visits in approximately 20 communities (see below). AEA is also developing a system of remote, real-time facility-operations monitoring using the Internet. AVEC monitors facility operations as part of its regular business activities, but does not conduct analysis that focuses specifically on Denali Commission policies or priorities. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 73 Investment Program partners are expected to address compliance as part of their project due diligence. Program staff conduct spot checks and help address issues as requested by partners. Of the ten criteria, most can be addressed through negotiation or facility design. However, projects will not proceed if a prospective operator is in arrears with the Internal Revenue Service (IRS) or a fuel supplier. Private Enterprise The bulk fuel business plan template does not call for applicants specifically to address private enterprise issues. The policy is implemented informally, primarily by program partners in the course of working with the community and other parties involved to develop projects. Existing, small-scale, local retailers are given the opportunity to participate in new storage facilities through long-term leases, provided they eliminate any existing, non-code-compliant storage. Program staff report very few instances of private sector operators objecting to projects. Cost Containment Cost benchmarks were developed for the program in 2002.~ For energy projects observed during site visits to Golovin, Port Lions and Kwethluk, cost estimates were developed by an independent engineering consultant. Design and construction management of these projects was performed by AEA. Project projections include detailed financial projections. The Middle Kuskokwim Regional Energy Project was an effort by AEA to obtain construction savings by co-staging 25 projects in seven communities. The communities are located along 250 miles of the Kuskokwim River. According to AEA, most cost savings were not realized due to a variety of logistical challenges. Open Door Not Applicable Business Plans Business plans have been required since 2002 for most projects. Applications for projects subject to this requirement must include a business plan in the Commission’s approved format. Business plan status was reviewed for the following site visits: * Golovin — Bulk fuel facility business plan on file. Business plan monitoring report on file, August 2005. At that time the City had not hired a bulk fuel facility operator or manager. Reporting systems were not yet in place, and training was recommended for management and _ staff. It was also recommended that the business plan be updated. = Nome — Rural Power System Upgrade (RPSU) predates business planning requirement. Diesel plant was pass-through funding for a legislatively required project. Nome Utility is considered a sustainable entity, so no business plan was required for this project. * Denali Commission Quarterly Meeting Briefing Paper, May 23, 2006 Denali Commission Program and Policy Review McDowell Group, Inc. + Page 74 " Kodiak — No energy projects in Kodiak * Port Lions - Bulk fuel upgrade business plan on file. * Napaskiak - Bulk fuel upgrade predates business plan requirement. * Kwethluk - Bulk fuel facility business plan on file. RPSU in conceptual design phase — business plan not required to be completed yet. * Bethel - No energy projects in Bethel. * Craig/Klawock — Projects predate business plan requirement. Wood-fired boiler was a demonstration project. No business plan required. Operator business plans were reviewed for energy projects in three communities: Kwethluk (bulk fuel), Port Lions (bulk fuel), and Golovin (bulk fuel and power plant upgrades). The documents appear thorough and consistent and contain detailed management plans and financial projections. (See also, Summary of AEA Business Plan Monitoring Findings, below.) Energy projects in Nome, Craig, and Napaskiak either predate the business plan requirement or were not subject to it because the project management entity (Alaska Power & Telephone (AP&T) in Craig and Nome Utility in Nome) was already defined by the Commission as sustainable. On the same basis, AVEC projects are not subject to business plan requirements. Community Plans Communities applying after January 2005 must have community plans that address the priority of energy facilities. Following is the plan requirement status for sites visited during the Review: = Golovin — Plan on file: 2004 Economic Development Plan. Golovin’s three energy projects predate this plan. The plan does not address energy. = Nome - Plan on file: 2003 Comprehensive Plan. Nome’s distribution upgrade predated the 2003 plan. Nome’s RPSU project began in 2003 and predates the community plan requirement. It is not addressed in the plan. The plan calls for exploration of alternative (wind / wave) energy. * Kodiak - Plan on file: 2003 Regional Economic Development Plan. Kodiak has no completed energy projects. The plan identifies reducing electrical power cost through diversified supplies, conservation and alternative power as a regional strategy. * Port Lions - Plan on file: 2003 Comprehensive Community Plan. A bulk fuel facility upgrade is complete. The plan identifies electrical power as primarily hydro and reliable. Fuel for heating is distributed by truck or hauled by residents. The plan expresses concern about the reliability of the truck and lack of direct marine access to fuel. Access was improved in the upgrade project. The plan rates fuel storage capacity adequate for current needs. * Napaskiak - Bulk fuel upgrade pre-dates requirement. No community plan on file. A 2004 Community Facility Plan addresses water and wastewater infrastructure. Napaskiak has a recently completed bulk fuel facility. The local utility has identified a need for new generators, but directors expressed uncertainty (during the site visit) about how to obtain funding. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 75 * Kwethluk - Plans on file: (1) 1998 — 2003 Comprehensive Community Long Range Plan. (2) 2000 — 2004 Economic Development Plan. The Economic Development Plan identifies bulk fuel storage as one of ten top priority infrastructure needs. The 1998 — 2003 plan also identifies bulk fuel storage as a need. Another top priority in the 200 - 2003 plan is increasing generator capacity, subdividing distribution to enable sectional repair shutdowns, and automating power system operation. The plan indicates that documentation was being prepared for the Denali Commission. The bulk fuel facility was completed in 2005. An RPSU is in the planning phase. * Kwethluk’s planning history and observations during the site visit are evidence of a consistent effort in the community to reach agreement on common goals. «Bethel - Plans on file: (1) 2003 Bethel and Orutsararmiut Native Council (ONC) Community Economic Development Plan. (2) 2005 Recreation Facility Plan. Regional plans on file: (1) 2002 - 2007 Association of Village Council Presidents (AVCP) Comprehensive Economic Development Strategy. (2) 2003 — 2005 Lower Kuskokwim Economic Development Council — Two-Year Strategic Plan. The 2003 Bethel/ONC plan identifies exploration of alternative energy as an action item. The 2002 - 2007 AVCP plan adopts reducing energy cost as a goal. Action items include exploring regional fuel distribution points, piped natural gas, alternative energy an.developing a region-side energy plan. The LKEDC plan does not directly address energy. * Craig/Klawock — Klawock projects pre-date requirement. No community plans on file. Craig wood-fired boiler was a demonstration project. No community plan required. Performance Measurement The Commission tracks number and status of projects beginning with conceptual design and ending when the facility is ready to be placed in service. The Commission does not track Energy Program impacts directly. Potential performance measures identified by Commission staff and partners for energy projects include: » Improved facility reliability * Savings from bulk purchase of fuel "Reduced fuel spills resulting from compliance with regulations = Improved power generation efficiency (kWh per gallon of fuel) Findings Reduced fuel spills — The Commission’s bulk fuel projects undoubtedly have averted fuel spills. However, the number and size of averted spills may only be speculated. Examination of Coast Guard records and discussions with Coast Guard Prevention Unit staff and Alaska Department of Environmental Conservation Division of Spill Prevention and Response personnel indicate a lack of readily available data that could act as a basis for estimating cost savings from spills that were averted due to new facilities. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 76 Improved reliability — It is similarly certain that energy projects have resulted in more reliable power. However, the Review was unable to locate data with which to compare, for example the number or duration of power outages before and after upgrades. AVEC reported that outage rates in its communities have not changed materially as a result of Commission funding because AVEC outages were infrequent prior to the Commission projects, even though the equipment was in a less dependable condition. Nevertheless, interviews with village residents indicate they feel more confident and secure as a result of the new facilities. The new equipment is described as more reliable by residents, and new installations often provide more redundancy - more/larger tanks and back-up generators — than existed with the old equipment. Savings from bulk purchase of fuel - The effects of energy projects on consumer cost involve a number of complicated variables. Larger storage capacity has made it possible for operators to negotiate better fuel prices by buying higher quantities less often. However, some villages — the number is not known - are unable to take advantage of this purchasing power because of lack of capital. Local utilities must file periodic information about the prices paid for fuel. It is theoretically possible to compare these filings before and after new facilities were installed. However, the information is not always accurate. Estimating the extent to which any cost savings have been passed on to customers would be very challenging. Improved efficiency — Energy projects have made power generation more efficient on a kWh/ gallon of fuel basis, according to records from AEA and statements by AVEC. AEA has analyzed the theoretical savings from generator improvements and heat recovery for 13 projects to date based on comparisons of the relative efficiencies of the old and new facilities. The chart below shows total annual savings ranging from $7,000 to $137,000 per project, with an average savings of about $37,000 per year, per project. AEA Energy Efficiency Project Impacts Community Lighting Upgrades [ Takotna RPSU | Powe: Generation Stony River RPSU TT] miioattg Sleetmute RPSU | Pedro Bay RPSU NikoiskiRPSU Do] Kongiganak RPSU | Kwigiliingok RPSU od Kothk RPSU = Kokhanok RPSU Hughes RPsu SERIES EEE Golovin RPSU 7 as Crooked Creek RPSU $- $20,000 $40,000 $60,006 $80,000 $100.000 $120,000 $149,000 $160,000 Fuet Cost Savings (FY05) Denali Commission Program and Policy Review McDowell Group, Inc. + Page 77 The AEA analysis also shows that lighting-upgrade demonstration projects in four other communities save retail customers approximately $41,600 per year. AVEC reports experiencing similar types of improvement in generation efficiency, but did not provide supporting data. A representative of AVEC said, “We keep extensive monthly and yearly records of production, fuel efficiency and costs on a routine basis and have done so for decades. We know that the Denali projects have significantly improved our overall generating and system efficiency and avoidance of expensive fuel deliveries as well as reduced risk of fuel spills from pipelines and tanks.” In spite of efficiency gains, however, the costs borne by village residents reportedly have increased after energy upgrades in most cases. In part, this has been due to rising fuel costs, but it also reflects the fact that grant terms require operating revenues to cover maintenance and replacement of facilities. Most users must, therefore, pay more for fuel and power than they did when tanks and generators received less maintenance and replacement reserves did not exist in most cases. Other Energy Projects The Review did not attempt to estimate impacts from “Other Energy” projects. Those projects range widely from installation of pipelines between new tank farms and harbors or airports to funding of various electrical inter-ties, some of which are very large projects with multiple funding sources, to demonstration projects undertaken mainly as research and development. Site Visit Observations The Site Visit Observations sections in this report present a combination of information from community-based interviews, on-site observations, and publicly available documents. It is important to note that interviews represent the opinions and perceptions of individuals and may or may not be factual. Unless specifically identified as such, information in the Site Visit Observations sections may not represent the position of the Denali Commission. Craig/Klawock The Denali Commission has funded a variety of energy related projects in the Craig /Klawock area. The largest was the design and construction of 2MW run-of- river hydroelectric facility on South Fork of Black Bear River. The project had a total cost of $4 million, including $3.5 million from the Denali Commission. AEA was the program partner and Alaska Power & Telephone was the operator and construction contractor. Prior to construction of the South Fork facility, Black Bear River generating capacity was insufficient to meet peak demand, requiring costly supplemental diesel power generation in order to prevent draw down of Black Bear Lake water levels. The Black Bear FERC license requires a release of 9 cfs. During high-power demand, low rainfall periods, this requirement forced Alaska Power and Telephone to generate diesel power to supplement the hydroelectric generation. A significant indirect benefit of this project has been reduced power costs in Hydaburg. Completion of a 31-mile transmission line linking Hollis and Hydaburg, coupled with the power supply stability made possible by the South Fork project, has lead to a dramatic reduction in diesel usage in Hydaburg. Prior to completion of the transmission line, Hydaburg would burn 130,000 gallons of diesel annually to generate power. In 2006, the community burned approximately 2,000 gallons. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 78 The so-called “mergers and consolidations” project was a $628,000 system upgrade project that included $600,000 in Denali Commission funding. The project included pole replacement, replacement of non-compliant parts of the URD system, removing abandoned TV cable, replacing substation transformers, correcting NESC violations, etc. A project under construction is a wood-fired boiler to provide supplemental heat at three city-owned buildings in Craig, the Craig Aquatic Center and the Craig Elementary and Middle schools. This project germinated with the City of Craig. The City Manager (Jon Bolling) has been the primary facilitator of this project. The USDA Forest Service has provided technical assistance (in addition to funding support) on the project. The Denali Commission has contributed $300,000 of the $1.6 million project. The project is expected to save the City of Craig $40,000 to $90,000 annually depending fuel costs. The facility could serve as model for others elsewhere in Southeast. Port Lions The bulk fuel facility upgrade was a proactive initiative by the Native Village of Port Lions. A wholly owned subsidiary of NVPL, Kizhuyak Oil Sales, operates the fuel company that services the town. NVPL identified a need for eventual facility upgrades, and was able to use the Denali Commission program to extend the life of the facility and to bring it into better environmental compliance. This project is best described as scheduled maintenance and upgrades rather than deferred maintenance or critical repairs. The Native Village of Port Lions prepared a business plan for the facility upgrades and improvements, in partnership with AEA. The community has a track record of sustainable operations for the bulk fuel facility. The community anticipates that upkeep of these facilities will not be substantially more costly than previous operations. However, although KOS has a long history of profitable operation, there was some concern in the community that it might lose control of the facility in a time of financial hardship through the secondary-operator provision. The partner organization in the construction of the upgrade of the bulk fuel facility was AEA. Contractors installed some of the control systems for the facility. Tribal members said costs associated with the bulk fuel facility could have been reduced through the use of manual versus electronic valve controls. Some suggested that the facility engineering may have exceeded the community’s needs. No new jobs were created as a result of the upgraded facility. Operation of the bulk fuel facility is by Kizhuyak Oil Sales. This company employs locals exclusively. The bulk fuel facility is currently operational. Interviewees noted that the new system is more efficient for fueling. It also reduces the likelihood of fuel spills. The lifetime of the facility was expanded. The new facility also provides better access for marine fueling. Residents haul fuel from the facility to their homes for home heating and uses. They noted that the new dispensing system streamlines the process for accessing both gasoline for automobiles and #1 and #2 diesel for home and auto use. In the previous fuel farm configuration, customers had to visit multiple pump sites to get their fuel. In the new system, they are able to obtain diesel and gas at the same site. Interviewees also noted that the new facility creates a certain amount of pride and good feeling in the community. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 79 Nome Through AEA, the Nome Joint Utility System (NJUS) received two Energy Program grants from the Denali Commission - a power system upgrade and a diesel power facility upgrade. The power system upgrade, implemented between 1999 and 2001, was an extension of rural electrification, expanding power in three directions to subdivisions outside the Nome municipality. Some of these residents had previously used generators or kerosene lamps, wind power, or had no power at all. In addition to powering private homes, the rural electrification project allowed the City to expand public lighting, increasing public safety. This project addressed a need for better power to subdivisions and areas bordering Nome, which indirectly diffused a housing crunch within city limits. As Nome is a regional hub for rural villages, this project improved infrastructure and emergency services for the region. The grant process for the NJUS power facility upgrade and relocation started in 2000 but was significantly derailed at one point, causing its completion date to move towards spring 2007. The old plant is located a few yards from the Snake River, near the Nome airport. Relocation was necessary because erosion of the adjacent river banks allows for frequent floods and the plant’s proximity to the airport put the facility smoke stacks in violation with Federal Airport Administration regulations. NJUS felt that problems due to location, and their newly extended coverage, warranted the facility relocation and upgrade. Impacts can only be estimated based on the site visit, as the project was not complete. Flooding will not be a concern at the new location, which is on higher ground. The new plant’s smoke stacks w ill not violate federal regulations. With newer equipment, it is likely that facility operation and maintenance costs will be lower. NJUS expects that the power plant upgrade and relocation will resolve service reliability issues stemming from older equipment. Improved reliability and capacity directly enhance community and economic development projects including the new hospital, mine development, and seafood processing. Golovin Through AEA, the village of Golovin has received three Energy Program grants from the Denali Commission - one grant for design and construction of a new bulk fuel storage facility and two grants for regional power system upgrades. Bulk Fuel Facility. Golovin’s bulk fuel storage facility is currently owned by the City of Golovin; the school district partnered on the project. Eight old, small fuel tanks were replaced with two new tanks. The new tanks are larger and double-walled, making them compliant with current federal codes, more spill resistant, and safer for the community and the environment. Additionally, the larger storage capacity allows purchasing efficiencies for the community. Golovin has experienced significant flooding in the past two years. Residents repeatedly expressed concerns that the new tanks are in a flood zone (as were the old tanks). However, residents also acknowledged that delivery from the storage tanks to community buildings is most efficient in this central location. Furthermore, the land at higher elevations was privately owned and was not affordable when the project was under development. The project was locally coordinated by the City of Golovin and the Bering Straight School District. The local IRA Council (Chinik Eskimo Community) felt that there was insufficient discussion between planners and community residents. Residents were frustrated that outside contractors were brought in for the construction. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 80 However, tribal council members said that the Denali Commission application process was much more efficient than that of other federal funders. The bulk fuel facility project enjoyed construction cost efficiencies, as deliveries of project materials and equipment were coordinated with the concurrent power system upgrade. Residents have experienced problems with the fuel pumps, which don’t function very well in cold weather. The Commission’s performance indicators for adherence to budget and schedule were useful and fairly comprehensive because the projects’ outcomes were easily measurable. Data regarding the availability and cost of fuel before and after the project would be another useful performance measure. Diesel Power Facility. Golovin’s power system upgrades, totaling about $2 million, met many community needs by providing more reliable power, increased safety, and the ability to meet federal codes. Unfortunately, the community’s recent flood experience is a threat to the newly upgraded plant. The generators, which were initially set on the ground, have since been raised about 4 feet to avoid damage. Some residents felt that the lack of communication between the outside designer / project overseer and local residents led to design and location flaws. The construction process followed Commission objectives by providing work opportunities for a few local residents. Facility maintenance has been an issue for the new Golovin plant since its completion. The Alaska Department of Commerce, Community and Economic Development (DCCED) Local Government Specialist noted that privately owned/operated facilities (as opposed to AEA owned/operated) are more challenging to run. He said AEA does not travel to villages to train local operators / maintenance staff on non-AEA facilities. Kwethluk/Napaskiak Kwethluk received $4.4 million in Denali Commission funding, which covered the full cost of a new tank farm. Napaskiak received $310,700 in Commission funding toward a $1.4 million tank farm project that was also funded through $498,000 in local match and $564,000 from the State of Alaska. The tank farm projects have been especially critical for the school district. The district says it would not have been able to bring all its individual fuel storage facilities into compliance with Coast Guard requirements. Many of them were inherited from old BIA installations. The district believes that there have been fewer fuel spills as a result of the projects. The district also notes that bulk purchases can reduce costs, but that villages can’t always afford to fill the new tanks. When the district participates in a tank farm project, it wants a cell of dedicated tankage of its own. Then overall maintenance is shared among all the users of the tank farm. Kwethluk residents are hoping that an RPSU currently in the conceptual planning phase for their village will include using waste heat for the school and a community building. Napaskiak’s bulk fuel facility is operated by the tribe - as is the gas station —- and appears to be well maintained and well used. The local utility is operated by the City of Napaskiak and is in need of upgrading, according to the utility board. The utility buys fuel from the tribe. At the time of the site visit, only one of three generators was working, and a technician from AEA was expected soon to repair one of the others. AEA subsequently determined that the third generator is not repairable. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 81 The Napaskiak utility board was uncertain about how to proceed with requests to the Commission for a generator upgrade (RPSU) project. They said they needed assistance with the process. They are also concerned about residents who are behind in their utility payments. Napaskiak is also interested in wind power. Commission staff say the city is in the queue for an RPSU project. AEA staff say the generator facility is in less than good condition, but is functional for the immediate future. Other Analysis Summary of AEA Business Plan Monitoring As of the end of 2006, Aurora Consulting of Anchorage had assessed the status of twenty energy projects by means of site visits conducted under contract to AEA and funded by a Denali Commission grant. The site visits examined the extent to which projects were meeting requirements stipulated in their business operating plans, as well as assessing local management and operational skills relevant to the facilities. The table below summarizes some of the information in site visit reports that were filed between August 2004 and December 2006. Aurora Consulting continues to conduct site visits under this contract. The table shows McDowell Group’s interpretation of site-visit report information with respect to a few key indicators and is not intended to substitute for the reports, themselves. The reports cover a broader range of indicators than those addressed in the table and provide detail about the degree of compliance, extenuating circumstances and other factors. Further, all projects were relatively new at the time of the Aurora Consulting visits, and some reporting requirements were not yet in effect for a number of the projects (this is denoted “n/a” in the table). Column headings refer to the following: * O&M- Is the project making regular deposits to an operations and maintenance reserve account? = R&R - Is the project making regular deposits to a renewal and replacement account? = Budget - Does the project prepare and monitor annual budgets? = Audit — Does the entity operating the facility obtain annual financial audits? = Plan Update - Does the project file updated business plans with the Commission when required? * Plan Final - the date the business plan was determined “final” * Monitoring — the date the monitoring report was filed. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 82 Table 6.1.3 Summary of Selected AEA Business Plan Monitoring Indicators O&M ese Tie felts PU Lig Plan Update Plan Final Monitoring False Pass | yes yes yes yes n/a | Nov-03 May-05 Igiugig yes yes yes yes no | May-02 | Jun-05 Takotna yes | yes yes no n/a May-03 | Jun-05 Kokhanok no no no yes n/a Mar-03 Jul-05 Larsen Bay yes no no no n/a Nov-03 Jul-05 White Mountain no no no n/a no | Sep-02 | Jul-05 | Deering | no no no n/a no Feb-03 / Jul-05 Kongiganak no no no yes no | Aug-01 | Aug-04 Port Heiden | yes yes no no no | Apr-02 Aug-04 Tuluksak yes | no yes yes no Jan-03 | Aug-04 Golovin | no no no no no | Feb-03 | Aug-05 Akiachak no | no n/a n/a n/a | Jul-03 Sep-05 Nelson Lagoon yes no no no no | Jan-04 | Sep-06 Nanwalek | no no no n/a no | Apr-04 | Sep-06 Chenega | no no no review no | Mar-02 Nov-06 Diomede no no yes no n/a Jan-04 | Nov-06 Atka | yes yes yes review yes Aug-03 | Dec-06 Pedro Bay | yes no yes yes yes | Feb-04 | Dec-06 Buckland | no no no no no | Oct-03 | Dec-06 Nikolai | no | no no no no | Juko2 | Dec-06 Source: McDowell Group analysis of AEA monitoring reports The table and the monitoring reports suggest that the projects vary widely but that many: «Face significant challenges and may need technical assistance to comply with grant/business plan requirements "May be susceptible to management lapses resulting from turnover in project staff and in other local administrative positions " Bear ongoing oversight, if the level of risk each represents is to be reasonably well understood and future performance ensured. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 83 More specifically: * Most communities visited were unaware of, or non-responsive to, the requirement that annual business plan updates be submitted to the Commission. For a number of the communities monitored, it would appear that the community’s ability to prepare such an update accurately and without assistance is questionable. = Most communities need assistance with administrative and financial systems. This need seems more widespread than the need for technical assistance for operations and maintenance of the equipment. * One of the troubling observations of the monitoring process is that 4 of the 20 villages do not appear to understand how to price fuel sales and/or electrical service so as to cover the cost of both operations and future inventories. Failure to price properly has been identifed by AEA as an important issue for many small utilities. * Another issue, even for communities that are doing well, is succession training. Many successful projects seem to depend heavily on the skills of one or two people. * The monitoring reports also show that a number of villages are either unwilling or, as many experts claim, unable to fund reserves for major upgrades and future replacement of facilities. Much of this monitoring information is new. Eight of the monitoring reports were filed in the last two quarters of 2006. The remainder were filed in 2005. It is not clear at this ttme how AEA or the Denali Commission intends to use the information in the business plan monitoring reports, other than to flag specific needs for short-term attention by AEA technical staff. However, the monitoring process seems to be a good investment. The facilities addressed by the monitoring visits represent roughly $56 million in Denali Commission investment and another $6 million in matching funds. Monitoring expenditures for the above reports total $123,000. In addition to the monitoring contract, AEA recently began using an electronic system that allows AEA technicians to monitor powerplant performance 24 hours-a- day from any high-speed internet connection using a combination of on-site video cameras and remote-reading instruments. So far, the system is operating in only a small sample of communities, but AEA is enthusiastic about the potential of this type of monitoring. Monitoring Limitations The monitoring reports are useful, but are subject to a few innate limitations. For example, they are based on observations made at a single point in time. This means they are not well suited to documenting underlying issues such as the degree of cooperation that may or may not exist between local entities or the financial capacity of local customers to support operations. Further, the business plan monitoring process does not include a mechanism for following up on issues raised by the reports. The reports make managers at AEA and the Denali Commission aware of existing and potential conditions, but it is not clear how or when managers are to respond when, as in the case of a monitoring report on the Buckland bulk fuel facility filed December 2006, a site visit suggests that financial and management limitations in the community cast some doubt on the future of the facility. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 84 Secondary Operator Agreement Program managers have few options for enforcing energy grant requirements once a facility is built and operating. The primary enforcement mechanism for projects with severe operating problems is the “secondary operator” agreement. This legal contract calls for the primary operator to pay all the expenses of a substitute operator, plus a reasonable profit for the substitute, in the event the primary operator fails to meet the Commission’s operating and financial requirements. The secondary-operator provision is widely considered impractical. Critics say the option would be difficult to implement and would have little impact in communities where performance problems reflect structural issues, for example an inability of users to cover a facility’s full costs. Further, in many communities there is no obvious entity able to take on the role. For example, grant documents for energy projects in Golovin and Kwethluk show the name of the ‘secondary operator as “to be determined.” If the goal is for operations to be as efficient as possible, then helping the primary entity do better seems a preferable alternative in most cases. This is the course that program managers have followed in the past with troubled sites. Community Interviews Of the fifty-three communities where interviews were conducted, 23 had energy projects, with a total of 46 projects in various stages of completion. (See Community Interview methodology, Section 3.) Table 6.1.4 Communities with Energy Projects (39 individuals interviewed, 46 projects) Community Patter aa Cli] bere a Cie ey Akutan 2 Kotzebue 1 Ambler | 3 Larsen Bay 2 Anaktuvuk 3 Mekoryuk 2 Aniak 1 Metlakatla 1 Anvik 1 Nanwalek 2 Arctic Village 2 Old Harbor 2 Chenega 2 Ouzinkie 2 Chignik 2 Point Lay 2 Chuathbaluk 2 Quinhagak 1 Gambell 1 Stebbins 2 Glenallen 1 Tyonek 1 Hooper Bay 1 Denali Commission Program and Policy Review McDowell Group, Inc. + Page 85 Likelihood of securing alternative funding: More than half the respondents saw little likelihood of securing funding other than through the Denali Commission. Of those who said other funding might have been obtained, many said the process would have been much longer and more laborious. Very likely 0 Likely 2 Only a little likely 14 Not at all likely 25 Don't know 3 Planning/implementation process: About 20 percent found the process challenging or very challenging. Very challenging 4 Challenging 17 Only a little challenging 20 Not at all challenging 2 Don’t know 3 Facility Maintenance: Nearly all respondents reported that projects are maintained well or very well. Facility Used as Expected: Nearly all believed facilities were being used as expected. Respondents were also asked what they thought was the biggest benefit and biggest problem associated with their local energy projects. Biggest Benefit of Project Increased safety and compliance with regulations = The bulk fuel storage upgrade was a major improvement in fuel handling and storage. The community was at risk of a fuel spill and the facility is now up to standard. = Got the community in-line with EPA standards. = The new tank farm meets current EPA requirements. It replaced one that was built 20 years ago and did not meet EPA requirements. * Facility operation is much safer & meets federal codes and regulations. = New system and up to code, less hazard and people can get more fuel. Up to code, good system, runs better. = Safer for environment and better equipment. With regional project, we have new generators and are able to work out problems. * — It's larger and can store more fuel and is safer. = The new take farm will meet current codes & regulations, which the current tank farm does not. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 86 Cost savings: It allowed us to store larger amounts of fuel, enabling us to buy larger quantities and get a better price. More economical. The new technology is more efficient, lowering costs for residents. He said that fuel prices in Anaktuvuk Pass used to be stagnant, but with the new facility, they fluctuate, reflecting costs in the rest of the country. Being able to store large amounts of fuel allows us to buy larger quantities when the price is lower. More economical for the city. The relationship between the people, reliable fuel source, helps them make it through the winter with fuel, makes it economically feasible, reliable fuel power generation (Fuel). They set up trust accounts and become sustainable. Fuel savings that are and will be seen (Wind). Cost savings to the community (Power Plant). Reduces emissions from the city, reduces city costs, keeps those new excess funds local Increased accessibility and convenience: People no longer risk their lives to go to Port Graham to pick up fuel and gas — it is now in the village. Not having to haul fuel that's delivered by air. Now it just comes down the pipeline (Pipeline Extension). There have been none because it was taken from the city (Wind generator). The fuel supply is now much closer to town and more convenient, but the gas station is down there, with no warming facility. It was too expensive to run a pipeline to the village council office. Having the facility locally, and having fuel available. For power upgrade, being able to benefit from the dam as a source of natural power It's nice to have fuel always at hand Availability of heating fuel and gas in the community, they don’t have to wait for the weather to clear or go to another community for fuel. This is vital - it has been life- saving. The fact that we're getting an upgrade (Power Plant). The whole refueling process is easier (Fuel). Fuel availability year-round. Increased reliability and efficiency: Ability to store more fuel so they do not run short. Power fuel consumption is lower, as usage is much more efficient. The plant is more efficient and stable. The new site will have better tanks and equipment, which will enable them to provide better service to residents. Reliability of fuel deliveries. The new tanks have internal pumps instead of external pumps. More reliable deliveries due to better equipment and facility. This gives residents a better sense of security regarding fuel availability. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 87 = Each year we use to run out of fuel but now it provides 2 years storage of fuel. We don’t have to worry as much about power outages. * Assurance of fuel throughout the year and an up-to-date facility that is reliable. The fuel facility will store more fuel and lower the overall cost to the community. * Storing enough fuel to last through the winter and being able to take advantage of low prices when they come. = Areliable power system. = Fuel — which was only available from private vendors before, and was not dependable. The state cut municipal assistance and the Commission was looking for ways for communities to generate revenue. This project has generated crucial revenue for the city. * It isa more reliable source of fuel. Other benefits: "Provided jobs. = More revenue for the Corporation. = The two trainings (fuel management & bookkeeping) were helpful, and the process has made them better prepared to pre-empt issues that might come up in the future. * Economic Development. It will provide power to the north terminal of the ferry and use local power to capacity. . The current plant is on airport land, so with the move (consolidation), it will free up land at the airport for the upcoming airport extension/improvement project. Biggest Problem with Project: Design or Construction issues: Minor construction problems sucht as having to cut some telephone lines. Engineering of the pump in the fuel tanks needs to be re-designed. It is not low enough in the tanks and leaves 2,000 gallons sitting there (until the tanks are filled again). People can’t afford to have 2,000 gallons sitting there. There are a number of undesirable outcomes related to design and construction flaws that could have been prevented if the State had listened to the community advisors/residents. For example the control boxes are made of stainless steel, which does not work in their wet climate, and there is a lot of corrosion on the controls. Just that they overlooked the potential to have two tanks to pump into the transfer tank. The logistics of merging new equipment with an old system was difficult. The capacity is OK but they have to keep 1/3 amount of fuel in it... Piping needs to be changed to allow for appropriate balance of capacity for #1 & #2 fuel. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 88 Communication issues: The community did not have enough say in the design and construction and is now left to deal with the problems which could have been prevented. When anyone voiced concern regarding facility plans, the State threatened to pull the project all together. Furthermore, the fuel facility didn’t need the large overhaul it got; it just needed certain smaller upgrades. The current facility is worse than the original in some aspects. Higher costs: The cost of fuel is ridiculous! 1) The agency (Denali Commission) had to get more money due to mistakes being made, 2) Price of fuel is too high, we can’t obtain fuel and it is expensive and hard to get companies to deliver the fuel, and 3) Plant/Bulk Fuel — working with AEA and Denali, providing on-going training for villagers. For Power upgrade, obtaining permits is causing difficulties through Fish and Game. Chignik has been designated as a stopping point for an endangered Eider species, so during the winter months, no fuel transport is permitted. This forces the community to buy fuel only during summer months and should the price fall after that period, the community loses out on the better price. Maybe due to climate change more surges than normal. (Diesel Gen) Problems with general process: Money was diverted to tribal council — not even used by the city anymore Their equipment was not efficient and they used the village's equipment, ran it down and did not pay for it. They had a management problem with billing, but handed the program over to the housing authority and it ‘hasn't fallen apart yet, it is getting better and continually improving’. None it has been running smoothly it is a learning process as we go. (Fuel). With the regional project, there have been power outages, but they have improved some. Running short of funding (under budgeted) regarding the bulk fuel. Came short of being able to finish the project; for instance, there is no fence around it. Electronics need to be fine tuned on regional energy project. Other issues None, but a related project, enlarging the docks, is taking a lot longer than expected, so the one dock in operation must be shared between the fuel tankers and the cannery boats. I didn't realize that it was funded by Denali Commission. The fencing around the facility was damaged during snow removal. Also, the Borough, which runs the facility, has not hired enough people to operate it (there is only one person). Fuel shortages (rare). This is more of an economic problem, rather than a facility problem. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 89 6.2 Health (including Health Facilities, Elder Housing and Domestic Violence) Program Overview and Historical Funding In 1999, the Denali Commission Act was amended to provide for the * Lr ae construction and equipping of health facilities.” Primary care clinics are the “legacy” priority of the program. Other components developed over time include behav ioral health facilities, domestic violence facilities, elder housing, primary care in hospitals (primarily funds for new equipment), emergency medical services, and hospital design. Primary clinic projects are drawn from a “universe of need” list developed in 1999, Other health projects are chosen through competitive selections.” Table 6.2.1 Status of Health Projects as of 12/31/2006 Primary Care Behavioral Other Health a trtita) Design Construction 37 3 12 | + | Complete 70 2 33 In the past, the Health Facilities Program has received funding from two major sources: Base Funding, from the Energy & Water Appropriations Bill, and Health Resources and Services Administration (HRSA) funding. Funding from FY01 through FY06 totaled $193.5 million Table 6.2.2 Sources of Health Program Funding (in millions of dollars) rai1th 2002 Base Funding $10.5 $9.8 | $0 $5.4 $0 $0 $25.7 HRSA Funding 9.5 18.9 | 25.8 28.2 40 40 167.8 | Total 20 28.7 | 25.8 33.6 40 40 193.5 *\ Denali Commission Federal Fiscal Year 2007 Work Plan, May 31, 2007 Denali Commission Program and Policy Review McDowell Group, Inc. * Page 90 Health Facilities Program Primary Care Clinics In 2001, the clinic program identified 282 communities statewide in need of some level of construction, repair or facility renovation. Since 2001, nearly 200 communities have engaged in the Denali Commission’s process. The following three stages of project development are used to manage planning, design and construction for the clinic program. Conceptual Planning: All clinic projects that could eventually be eligible for Denali Commission construction funding may participate in the conceptual planning phase. Technical Assistance (TA) advisors are assigned to each project to assist in the business plan development process and to complete the site plan checklist. In some cases, the Denali Commission may consider small funding requests to assist communities in addressing the business plan or site plan requirements. Design: Eligibility for design requires an approved business plan and site plan checklist and a feasible strategy for design completion and acquiring cost share match. FY07 design funds will be awarded through a competitive process, and only those applicants meeting the minimum requirements will be eligible to apply. Construction: Eligibility for construction funding requires an approved business plan, approved site plan checklist, a final design (100% stamped drawings), a final budget (based on final design estimates), documentation of cost share match to fully fund the project and the ability to proceed to construction in a timely manner. “Other Than” Primary Care: The Denali Commission recognizes the primary care program as its priority focus area; however, there is a need to also support a full continuum of health and social service facilities on a statewide basis. On an annual basis, the “Other Than” primary care program identifies program focus areas outside the clinic program as part of a statewide continuum. Past program areas have included domestic violence shelters and elder housing/assisted living programs, both of which have since been merged under the "Other Than" primary care program. The selected FY07 program areas include EMS equipment/Code Blue, primary care in hospitals - managed by the Alaska State Hospital and Nursing Home Association (ASHNHA) - and behavioral health (Bring The Kids Home). Elder Supportive Housing In FY 2004 the Commission was directed to provide support for facilities that allow elders living in rural Alaska to stay in their home communities. Since then, the Commission has funded eleven elder-housing facilities across the state through a partnership with Alaska Housing Finance Corporation (AHFC). The Commission continues to develop this program by funding a needs assessment along with the Alaska Mental Health Trust Authority (AMHTA). The needs assessment will provide a framework for defining the future of this program for the Commission and its partners. The first elder-housing facility to be completed under the program received its final inspection in November 2006. Domestic Violence Facilities In FY2004, the Denali Commission received congressional direction to allocate $5 million toward the upgrade and construction of shelters for victims of domestic violence. The program is implemented through grants to the Council on Domestic Violence and Sexual Assault (CDVSA), under the Department of Public Safety, and the Alaska Department of Health and Social Services (DHSS) Facilities Division. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 91 Information about Domestic Violence Program grants in the project database is typically limited to photographs. A site visit to a shelter in Bethel that has received multiple Denali Commission grants showed that important operational and safety upgrades — including an electronic secure-entrance system -- were made with the Commission funding. In Kodiak, the domestic violence shelter reported that the life of the facility was extended considerably as a result of renovations and repairs funded by the Commission. New v inyl siding will lower maintenance costs, and new windows and heating system will result in lower utility bills. Health Program Data Information about the Health Program was drawn from the following sources: * Denali Commission staff * Denali Commission program status reports, planning documents, and grant documents, including business and community plans relevant to selected projects * Published reports addressing rural health issues * Medical services and other operating data provided by program partner organizations * Audit reports filed by the Denali Commission Inspector General * Interviews with representatives of major health partner organizations * Site visits, community interviews, and key informant interviews Program and Project Goals Program Goals " Health Facilities: build or renovate a primary care clinic in every community in Alaska that needs one and can demonstrate that a clinic and associated services are sustainable " Elder Housing: Operates subject to funding; no long-term goal * Domestic Violence: Operates subject to funding; no long-term goal Project Goals Project goals focus on construction milestones. Currently, the Health Program does not articulate desired project impacts separately from the program’s overall goals to meet the facility needs of communities. Application of Policies Open Door Policy The intention of the Open Door policy is to avoid unnecessary duplication of services for Native and non-Native populations. Health care facilities are the only projects explicitly subject to the Open Door policy, which stipulates that Commission-funded facilities must be open “at a minimum...to anyone who can pay for...services.” Because of the policy, some small clinics that historically have been funded entirely through the Indian Health Service have had to equip themselves for third-party billing in order to serve non-Native clients. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 92 Private Enterprise Policy The Denali Commission’s Private Enterprise policy regarding healthcare is carefully worded to capture the challenges surrounding investment in rural Alaska. The policy says, “The Denali Commission seeks to support healthcare facilities in a manner which [sic] improves access to quality, affordable health services, be it a private entity or a publicly funded one. The Denali Commission does not seek to create or enhance competition in an inefficient market.” The policy goes on to state “Given the economic fragility of rural healthcare systems, Denali Commission funding for healthcare facilities will be deployed in a manner which [sic] encourages a cooperative and collaborative arrangement for the health benefit of the community in question, and improves the sustainability of the overall care delivery system for the population.” Private enterprise issues are handled on a case-by-case basis as they arise in the conceptual planning phase, and the issues are managed as part of the business plan development and review process. Program staff say that common examples have included addressing perceived competition with private health providers and assessing whether rental space in a facility might interfere with the local rental market. In some cases the Commission has required that market assessments document the need for services in an area to demonstrate that residents are, in fact, underserved by local private enterprise. Staff say the issue of demand has, at times, been publicly debated and continues to be an area of controversy for the program. The policy places staff in the position of making other challenging judgments, as well. For example: What sort of “cooperative and collaborative arrangements” between public and private providers ought to be considered and fostered? Are there obstacles that prevent such relationships from developing? What role might the Commission play in facilitating the formation of such relationships? And what should staff do when lack of local cooperation appears to threaten a project? Sustainability The program has developed three size-models for primary care clinics to help ensure that clinic capacity matches local needs and to avoid unnecessary construction costs. Sustainability is addressed through development of a business plan that articulates the intended uses of the facility and their financial implications for both program services and facility maintenance. Participation by an established regional entity such as a regional health corporation is often a significant factor in establishing the financial sustainability of projects. Most funded medical facilities are operated by entities that receive funds from sources considered “sustainable,” such as Indian Health Service (IHS), Community Health Center (CHC) designation, Village-Based Clinic funds, and Medicaid. The Health Facilities Program does not do formal monitoring of facility financial performance or operations after construction is completed. Cost Containment Cost containment has been a significant challenge for the Health Program. The Commission’s main cost-containment tools have been benchmarks for appropriate cost per square foot. Projects that exceed benchmarks are reported to Commissioners. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 93 While the program has sought to control costs through prototype designs that match clinic size to local population, it is unclear whether this is meeting the needs of individual communities. The prototypes are appealing to communities that want to move quickly into construction. However, in many cases, the original prototype is ultimately modified. The modifications can inhibit economies of scale and blur cost targets. Further, as energy costs have escalated, the energy-efficiency trade-offs inherent in the prototypes have occasionally been criticized as outmoded. Cost-containment questions also have been raised regarding the force-account method, which ensures that local labor will be used for construction. The alternative to force account is to award projects through a competitive bidding process. The issue of force-account labor is complex, and suffers from a lack of reliable cost- benefit analysis. ANTHC uses force account for a majority of its clinic projects. Critics say force-account fosters unnecessarily high administrative costs and slows the construction process. Supporters say short-term inefficiencies are outweighed by local payroll benefits, development of local labor skills, and an increased sense of responsibility for the new infrastructure on the part of the community at large. The Commission passed a motion in 2005 requiring that all projects exceeding $3 million must be awarded by competitive bid, rather than using force account. To date, two appeals to this requirement have been submitted to the federal co-chair. Both have been approved. Taken together, the cost containment policy and the Commission’s motion provide program staff and partner organizations with guidance, but not full clarity, about how best to balance costs and other project impacts. Investment Policy Application of the Investment Policy consists of assessing, for example, the following: communities found to be at high risk for erosion or flooding, communities facing potential relocation, bad faith issues such as IRS debt or poor track record with another grant or funder, declining population, pending school closure, or other factors that might make the Commission’s investment in a facility project a high risk for failure to meet it’s intended purpose. An investment policy checklist is used to document the due diligence on these issues prior to funding, and in most cases the business plan is cited in the checklist as addressing the issues. There are cases in which the investment policy has been the basis for the Health Program to decline engaging in the planning process with a community until certain steps are taken. For example, a relocating community may be asked to document its relocation plan. Performance Measurement Health Facilities The Commission tracks number and status of health facilities projects beginning with conceptual planning and ending when the facility is ready to be placed in service. The Commission does not track the impacts of health facilities on public health, though the health steering committee has discussed the possibility of doing so. Potential sources of performance data identified by Commission staff and partners for health projects include: Denali Commission Program and Policy Review McDowell Group, Inc. * Page 94 * ANTHC tracks construction management indicators during facility planning and construction. * Health providers that operate facilities - primarily regional health organizations — track a wide variety of facility utilization and service statistics as well as financial performance information. = DHSS and other agencies track public health indicators. Elder Supportive Housing These projects are too recent to have identifiable impacts. Once facilities are in full operation, impact measures could include the number and duration of stay for clients who are able to remain in their home communities as a result of elder- housing facilities. Financial measures (savings in transportation and service costs) are theoretically possible, but more challenging to compute. Domestic Violence The program has not identified performance measures. Measuring client and community impacts for these primarily small grants would be challenging. In the case of the larger, facility-expansion projects, it should eventually be possible to demonstrate an increase in client services, assuming that providers are willing and able to pursue those increases. Findings The Health Facilities Program highlights the challenge of assessing infrastructure projects. While construction and financial sustainability indicators clearly are relevant, program staff and Commissioners have noted that public health impacts are only indirectly associated with facility construction, since individual health outcomes depend primarily on healthcare- -provider competencies, strategies and funding. Nevertheless, unless some effort is made to relate the infrastructure to population outcomes, it will be impossible to judge, over time, whether construction money is being well spent and communities well served. Since the Commission does not collect data about how its facilities are used, the main potential sources of information about the impacts of Commission-funded health facilities are the health provider organizations, including ANTHC. All health providers must track their services for Medicaid and other reporting and billing functions. However, the methods by which data is used for monitoring and planning vary widely among Denali Commission partner organizations. In general, healthcare providers say they also monitor the condition of facilities during the normal course of business. Typically this includes inspection by a facilities management team that carries out maintenance and improvement projects when necessary. Statistics provided by Yukon Kuskokwim Health Corporation (YKHC) and Southeast Alaska Regional Health Consortium (SEARHC) show improvements - in the number of patients served and types of services provided - that those organizations attribute, at least in part, to Denali Commission clinic projects. Representatives of other provider organizations such as Norton Sound Health Corporation (NSHC), Arctic Slope Native Association (ASNA), and Southcentral Foundation indicated that they also conduct ongoing tracking and documentation of the number of medical and dental visits in each community. However, they did not provide data for this review. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 95 ANTHC tracks healthcare utilization statistics and provided samples of Medicaid 1A report data for a small sample of rural clinics. That data also seems to suggest a correlation between service levels and Commission-funded clinics. However, specific local knowledge of each clinic site would be needed to draw conclusions, in part because the operating history of the new clinics often is only a year or two long. On the broader scale of public health, DHSS representatives were unable to suggest changes in health indicators that could be linked to Commission-funded facilities. Such changes may, in fact, be occurring. However, there is no regularly collected quantitative data to demonstrate to an outside observer whether the number of Commission-facilities constructed to date, the time they have been in operation, or the ways in which they have been managed have had a measurable impact on public health. One thing that can be said, based on interviews with rural healthcare experts, is that Commission- funded local and sub-regional clinics have become an integral part of rural healthcare strategies in Alaska. "The clinics have allowed providers to offer more and better services closer to home for rural residents. They have also provided space for new services that were not previously available locally, such as dental and behavioral health services. YKHC, for example, has built its rural service strategy around Commission-funded facilities. Though causality may not be demonstrated, clinic construction correlates with increased YKHC services. Between 2001 and 2006 24 YKHC clinics were constructed or renovated. During that time the number of patient visits in YKHC village clinics increased by 20 percent. Tobacco screening, vaccination and immunization rates increased substantially during the same period. Since 2004, YKHC clinic visits have consistently numbered approximately 20,000 higher than in the years prior to the Denali Commission facilities program. 2 YKHC also estimates Commission-funded sub-regional clinics save millions of dollars in annual transportation costs for the Bethel region. For example, operation of one sub-regional clinic is estimated to save patients $1.9 million annually in travel.” The potential for further cost savings from increases in local services is large. For example, YKHC records show an average of 3.7 tertiary-level primary care visits in Bethel per year for each of the region’s 30, 000 outlying residents. At an average round-trip travel cost of $250 to visit Bethel, YKHC estimates that current patient travel costs for these services could approach $20 million per year. Denali Commission-funded medical equipment has also expanded access to services. For example, medical services that previously did not exist on Kodiak Island (X-ray, CT scanning and mammography detection equipment) are now available as a result of equipment purciiases funded by the Denali Commission. A number of health partners also noted that Denali Commission projects have fostered better communication between providers and the villages they serve. Many noted that better coordination among funding agencies has been evident since the Commission became active. Interviewees said that Denali Commission funding has enabled them to be more patient-centered and more efficient in service delivery. In addition to the benefits to patients, they say this has resulted in better morale among provider personnel. Those interviewed gave high marks to Denali Commission Health Program staff for responsiveness and flexibility. * Yukon Kuskokwim Health Corporation presentation to the Denali Commission, April 2007. > Personal communication — Luke Welles, YKHC Denali Commission Program and Policy Review McDowell Group, Inc. + Page 96 Finally, most informants applauded what they said was a strong emphasis on local hire during clinic construction. They said clinics also provide jobs for local health aides, maintenance and administrative staff. Professional staff typically come from outside the local community. Site Visit Observations The Site Visit Observations sections in this report present a combination of information from community-based interviews, on-site observations, and publicly available documents. It is important to note that interviews represent the opinions and perceptions of individuals and may or may not be factual. Unless specifically identified as such, information in the Site Visit Observations sections may not represent the position of the Denali Commission. Craig/Klawock Five Health Program grants made in Craig/Klawock on Prince of Wales Island illustrate the potentially complex issues involved in rural care delivery. The first Denali Commission Health Program grants were two generally concurrent projects, including planning and construction related to the expansion of Alicia Roberts Medical Center in Klawock (ARMC) and a conceptual planning project aimed at creation of a centralized, single-campus, regional healthcare facility located in the Craig /Klawock area. ; The conceptual plan was prepared by Prochaska & Associates for the Prince of Wales Island Health Advisory Committee (POWHAC) with a $100,000 Denali Commission grant. The planning effort concluded that the ARMC was the logical location for a single-campus facility. The need for a centralized healthcare facility in the POW area was rooted in the basic challenges facing healthcare providers in rural settings. Klawock was (and is) served by ARMC, which is operated by Southeast Alaska Regional Health Consortium (SEARHC). Craig was (and is) served by the Craig Clinic, a facility that was operated privately until financial problems forced the City of Craig to assume control of the facility in 2001. One of the challenges facing previous operators of the Craig Clinic was the cost of providing emergency care services to patients who often could not pay for those services. Beginning in 2001, ARMC agreed to take all ambulance and after-hours emergency calls, though the center itself was not staffed, equipped or designed to handle the resulting increase in service demand. Since shedding itself of emergency care responsibilities, the Craig Clinic has been operating “in the black,” but is understaffed according to local sources. Just as the POWHAC conceptual plan for a single campus was being completed, Denali Commission-funded construction work was beginning on the expansion of ARMC to provide upgraded emergency care facilities as well as behavioral health space, pharmaceutical space, expanded dental space and equipment, and new physical therapy space and equipment. The project was also funded by the IHS and SEARHC. At around the time work began on expanding ARMC, movement toward development of a single campus, in accordance with the POWHAC conceptual plan, ceased (apparently POWHAC and SEARHC were unable to agree on how such a campus would be managed). Planning instead shifted to development of a “mini- campus” in Craig that would house the Craig Clinic as well as several other health and social service providers. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 97 To support this process, Denali Commission awarded a $75,000 grant to complete design studies and construction planning for repair, renovation and expansion of the existing clinic (ANTHC is the program partner). That grant funding has since been rolled into a $480,000 grant for design studies and construction planning for a new facility in Craig (the existing facility was deemed physically obsolete and not suitable for renovation). That planning process is scheduled for completion by December 2007. Construction of the Craig campus is expected to cost $6 million. Local informants say the overlap between ARMC expansion and single-campus planning was stressful and may have been a poor use of resources. It is unclear if the planning work conducted through the POWHAC on a unified healthcare campus has any lasting value. At the time of the site visit, it was not apparent how development of two facilities in close proximity would evolve. Commission staff report that discussions continue in an attempt to reconcile the two approaches. It is not clear that the Denali Commission could have altered the course of events that led to this situation, nor that it should have attempted to do so. Commission staff note that they view local decision-making as an important priority. Much of the Commission’s work rests on the principle that local groups will resolve their differences and develop a common set of priorities. Circumstances such as those surrounding the Craig/Klawock medical services suggest that the Commission’s community-planning requirement — which post-dates the ARMC expansion - is well founded. More recently, Copper Center has faced a similar situation. According to staff, the Commission’s position there has been that limited resources preclude funding redundant facilities. The Commission has asked for a plan that demonstrates a coordinated approach that will avoid duplicative services. Sustainability Policy There are a number of different informant perspectives on the sustainability of Denali Commission’s Health Program projects on POW. From one perspective, operation of the expanded ARMC, while providing much-needed emergency medical services to POW residents, requires greater on-going federal government support for non-emergency services (such as dental and pharmaceutical services), than prior to clinic expansion. This increased need for government support is viewed, from a macro perspective, as contrary to the policy of sustainability. Further, expansion of ARMC included facilities for pharmacy and dental services, which are not currently staffed, and therefore to date have not proven sustainable in terms of service. Alternatively, reliance on private sector or local taxpayer support for healthcare services has proven difficult and sometimes unsustainable in many small communities. As such, it is claimed, the only path to sustainability of services is through greater government support. Greater sustainability in healthcare services through consistent government support is one component in overall community sustainability. Sustainability is also achieved by partnering with larger regional organizations that have resources to sustain operations. Informants suggested that a better approach, in terms of sustainability, would have been the single-campus concept, blending federal and state government support and local support for a facility that housed both for-profit and non-profit healthcare providers. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 98 Private Enterprise Policy Denali Commission's grant for expansion of ARMC (which included pharmaceutical and dental space and equipment) is viewed by some as contrary to the Commission’s Private Enterprise policy. Craig has private for-profit pharmacy and dental providers, which perceive themselves in competition with SEARHC. Craig also has the City-owned clinic, which in some respects, is also in a competitive position with respect to ARMC. Documentation provided by one informant included correspondence between a local dentist and the Commission and a local pharmacist and the Commission expressing opposition to the funding of dental and pharmacy facilities at ARMC. This clearly contentious issue also included correspondence with state and federal-level elected officials, letters of concern from private providers from around Southeast Alaska, a second review of the ARMC grant award by the chair of the Health Facilities Steering Committee, and a final determination by the federal co-chair of the Denali Commission. The issue of competition between regional healthcare providers, such as SEARHC, and local non-profit and for-profit providers is complex and statewide in scope. With regard to the Denali Commission, the opinion expressed by several key informants was that regional providers have an “inside track” with the Commission, sometimes at the expense of local providers. It was noted by one informant that neither private providers nor rural providers are represented on the Denali Commission’s Health Care Steering Committee. Cost Containment Policy Based on available documentation, Health Care projects in the Craig/Klawock area have been completed within the planned budget. No construction cost over-runs were noted or apparent in the project documentation. Commission staff say they will review cost estimates for projects still in the design phase according to their regular procedures. Open Door Policy Emergency room and other services offered by ARMC are available to all residents of POW, consistent with Denali Commission’s Open Door Policy. Nome The Nome hospital is the last point of “local” medical service, after which the 9,300 regional residents must fly to Anchorage for higher levels of healthcare. The Nome hospital is owned and operated by Norton South Health Corporation (NSHC). Residents report that the current facility is fairly old, has some out-of-date technology and equipment, and has difficulty attracting and keeping doctors and medical staff. The Denali Commission awarded NSHC an $11 million grant for planning and design of a new hospital facility. The expectations of the new facility are more space, improved technology and equipment, and physical connection or proximity to a newly constructed hostel, which will provide affordable accommodation to village- based patients and escorts traveling to Nome for medical services. NSHC hopes that these improvements will improve Nome’s ability to attract doctors and other medical professionals. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 99 The Nome hospital design project objectives were achieved. The planning and design phase was completed well under budget and construction will begin in a couple of years. Kawerak is already working to identify training opportunities for potential hospital operation and maintenance staff. Many residents are excited about the prospect of a new hospital and the anticipated benefit of remaining within their community or region for medical care. The patient hostel will make travel from outlying villages significantly more convenient for patients and their escorts. Construction of the hospital will provide significant local employment opportunities. There is some community concern as to whether the new hospital will be “overbuilt” for the size and needs of the regional community, as well as their ability to financially support it. Private Enterprise Policy One interviewee expressed concern that NSHC’s policies would preclude private physicians from hospital access. In addition, there is some potential for the Nome patient hostel to affect demand for area hotels. However, residents also noted that travelers from outlying villages were most likely to stay in private homes. Golovin Golovin’s need for a new healthcare facility was well recognized. The old clinic was very small, provided little privacy for patients, and had poor technology and equipment. The structure was dilapidated, requiring new construction rather than an upgrade. The new clinic was funded with a $58,000 grant from the Denali Commission for planning and design and another Commission grant for just more than $1 million, plus a $400,000 local match provided by NSHC. The facility was approved under the Commission's “three-size” rule (based on population) as a medium sized clinic (2500 sq. ft.). It is centrally located and has more room, including space for more exam rooms, new dental and behavioral health space, and a morgue. New technology includes equipment allowing health aides to electronically send x-rays and photographs, and to video-conference with off-site doctors and specialists. This allows more patients to be treated on-site rather than having to travel to Nome or Anchorage. Residents believe the new facility has helped with staff retention and the current health aides were optimistic that a physician’s assistant could be recruited to the improved facility. Residents believe the project met the needs of the community well, although local staff noted a few specific negative aspects. The new clinic is located in the center of town, which offers easy access to water and sewer. Access from the street into the clinic is via a steep ramp, which makes access for wheelchairs or stretchers challenging. Residents also noted that the central location limits privacy for those seeking care. Numerous residents expressed concern about the clinic’s proximity to the flood zone. The new clinic is currently owned by NSHC, but its future ownership is uncertain. Residents are concerned about financial sustainability after the transfer. One of the notable costs in running the clinic has been flying in qualified maintenance contractors, since there is a lack of locally trained maintenance staff. Interviewees said there had been maintenance issues soon after the clinic opened, including a problem with the boiler. Several residents felt that local ownership of the clinic would promote community responsibility and pride. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 100 Kodiak Denali Commission Health Program grants to Kodiak have totaled $482,121, with all funding spent to date. Projects supported by the Commission received total funding of $974,241, including funding from other sources. The largest project funded by the Commission was the purchase of a CT Scanner for the Providence Kodiak Island Medical Center, a $582,241 project, including $291,121 from the Denali Commission. There had been discussion surrounding the need for new medical equipment in the Providence Kodiak Island Medical Center for more than three years before an application for Denali Commission funding was submitted. Staff at the medical center felt it was important to obtain new equipment (including X-ray machine, CT Scanner, and a detection system for mammography) so that specialized services that were unavailable at that time could be provided on the island. Prior to receiving Denali Commission funding to purchase this equipment, patients had to travel to Anchorage to receive these services. In 2003, a review and re-prioritization of equipment needs took place that eventually lead to the application for funding from the Denali Commission to purchase the equipment. The Kodiak Island Borough and the Kodiak Island Health Care Foundation have been working with the Providence Kodiak Island Medical Center (PKIMC) to expand the scope of medical services available and improve medical care and access through the PKIMC Patient Care and Facilities Improvement Project. The equipment purchases funded by the Denali Commission were one component of this project. In 2003, PKIMC and the Kodiak Island Borough began focusing on patient care support and capital improvement issues. This process included a review and re-prioritization of the hospital’s capital equipment list, patient care equipment needs and modernization of facilities and process improvements. This planning review process primarily involved PKIMC and Kodiak Island Health Care Foundation. However, several key participants have contributed to the project. These partners include the Kodiak Island Borough, the Rasmuson Foundation, DHSS, MJ Murdock Charitable Trust and the Denali Commission. The final ratio of Denali Commission funds to match existing funds exceeded the required 50% match. A higher quality of care is possible in the Providence Kodiak Island Medical Center as a result of new equipment. The equipment saves time and cost associated with traveling and provides patients with timely, convenient and high quality care. These equipment purchases also resulted in ten new jobs, according to local interviews. Interviewees commented that they were required to submit separate applications to several agencies in order to receive each round of funding for the project and would like to see agencies coordinate their processes to a greater degree so that multiple applications and approval processes are not necessary. PKIMC developed a business plan with the assistance of the DHSS. This was a useful process for the organization and it proceeded relatively smoothly and was approved in a timely manner by the Denali Commission. Interviewees indicated that Commission staff were very helpful, forthright and flexible. Interviewees commented that the Denali Commission is flexible in the sense that it does not use a “one model fits all” approach. PKIMC is also seeking funding assistance from partners for a $2.5 million hospital construction and rehab project. This project involves adding on to the existing hospital building and converting administrative spaces for use by the New Start Community Health Center. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 101 Port Lions Denali Commission Health Program grants in Port Lions have totaled $1.6 million, with approximately $1.4 million of that spent to date. Health Program projects supported by the Commission received total funding of $1.9 million, including funding from other sources. The largest project funded by the Commission was the construction of a new health clinic, a $1.7 million project, including $1.4 million from the Denali Commission. The new Port Lions clinic has been open only a short time. The community views the planning and construction processes as very successful, however. Project Planning The need for a new health clinic and improved equipment had been recognized prior to local awareness of Denali Commission programs. There are a number of issues with the existing clinic including a lack of adequate space, no housing provided for traveling healthcare providers and a need for new equipment. Port Lions developed a community plan in 2002 that outlined community needs and goals. That plan was updated in 2006 in partnership with the Kodiak Island Housing Authority (KIHA). KIHA supported community planning in five of six of the small villages on Kodiak Island. That planning process was explicitly intended to support community partnerships with the Denali Commission. Community members noted that the community planning process they undertook was valuable. They felt that the process brought community members together to establish community goals and intentions. They commended the Denali Commission for requiring communities to undertake this process. They also noted that they were pleased the Denali Commission now has copies of their community plan on file and can reference it with respect to possible future funding. Project Implementation The Denali Commission worked primarily with the Native Village of Port Lions to implement the project. The Native Village of Port Lions is the traditional tribal council for the Port Lions Alaska Native community. The Tribe is responsible for administering healthcare in the community. The Kodiak Area Native Association (KANA) is a health consortium that receives funding from Indian Health Services on behalf of the Kodiak Island tribes. KANA also provides the visiting clinicians for the clinic. The Tribe partnered with the Afognak Native Corporation and with the City of Port Lions to procure the necessary land for the development. The Afognak Native Corporation donated the land for the development to the City of Port Lions, which in turn gave the land to the Native Village of Port Lions. Tribal staff prepared a business plan for the new clinic, and said they received assistance in that effort from ANTHC. However, Commission staff say that ANTHC does not provide business planning assistance. According to the tribe, the business plan went through three revisions before approval. Tribal staff also noted that they feel they are getting better at the business planning process. There were no major problems reported with the clinic construction. Minor changes and amendments were suggested by local project participants. For instance, a glass wall was installed between the waiting area and the check-in desk to provide an additional layer of privacy for patients. In general, construction was considered to be in line with typical projects. At peak construction, there were ten jobs as a result, according to tribal representatives. All jobs were local hire with the exception of the supervisors, who Denali Commission Program and Policy Review McDowell Group, Inc. + Page 102 were hired from the regional hub of Kodiak. The clinic will be operated with the same local staff who worked in the previous facility, with continuing oversight from KANA, as in the previous clinic. Clinic operations include visits by traveling physicians and dentists and their support staff, as well as primary care provided by health aides living in the Port Lions community. The new clinic is expected to provide significantly improved treatment facilities and quality of care. Community members noted that the project likely would not have happened without the Denali Commission’s program support and funding. Open Door Policy The new Port Lions clinic is required to have an open door policy; however, the previous clinic did not operate under an open door policy. There are ongoing discussions with KANA regarding the implications of this policy. Presently, staff are uncertain of how this policy will be implemented. Bethel/Kwethluk/Napaskiak The local regional health provider, YKHC, is the largest in Alaska. It’s regional offices and hospital are located in Bethel. At the time of the site visit in February 2007, a new clinic was under construction in Kwethluk and a recently completed clinic was in full operation in Napaskiak. The new Napaskiak clinic was attractive, clean, well-equipped, and an apparent source of pride for the community. It appears to be well used and was busy throughout the site visit. Residents and staff viewed as especially important the small dorm room that allows for up to four visiting professionals. The clinic also includes a dental office. Previously, dental services were available only in Bethel. Round-trip airfare to Bethel from either Napaskiak or Kwethluk costs in excess of $100 for the roughly ten-mile flight. There are no roads between the communities except during the coldest winter months, when adventurous residents may drive over the frozen Kuskokwim River. With no operating history in Kwethluk and only a few months in Napaskiak, it is too early to try to document community-level changes that may result from the two clinics. Because the two communities are close to Bethel, however, they may offer an opportunity for closer study of the pros and cons of providing specific services locally and regionally. As noted in the site visit report (Appendix 2) and the Energy Program section, Napaskiak and Kwethluk, have significant and potentially informative differences, in spite of their proximity and many similarities. Other healthcare grants in the area include planning funds for a primary clinic to be co-located with Bethel Hospital and renovations to the Bethel Family Clinic. Denali Commission Program and Policy Review McDowell Group, Inc. +» Page 103 Community Interviews Table 6.2.3 Communities with Healthcare Projects (41 individuals interviewed) Pere in ag ag owe Community cag | Akutan 2 Metlakatla 1 | Anaktuvuk 3 Naknek 1 Aniak 1 Nanwalek 1 |__Beaver 1 Old Harbor 1 | Chuathbaluk 2 Ouzinkie 2 | Cold Bay 2 Perryville 1 __ Eagle 1 Point Lay 3 Gambell 2 Savoonga 1 | Glenallen | 2 Selawik 1 | Grayling / 1 Seldovia 1 | Huslia 1 Stebbins 2 | Kiana/Kotzebue 1 Thorne Bay 2 |__Larsen Bay | 2 Tyonek 1 : Mekoryuk I 2 Likelihood of securing alternative funding Very likely Likely Only a little likely Not at all likely Don’t know Planning/implementation process Very challenging Challenging Only a little challenging Not at all challenging Don’t know Facility maintenance Very well Well Poorly Not at all Don’t know 7 12 14 3 5 Denali Commission Program and Policy Review McDowell Group, Inc. * Page 104 Facility Used as Expected Virtually all respondents said the health facilities were being used as expected. Respondents in two communities voiced concern that projects ended up being bigger and more complex than what the community had originally envisioned. A third respondent said the initial clinic design for the community was not usable and that the design contract had to be re-let, with accompanying delays. New Jobs due to Projects Most community representatives said one-to-two new jobs had become available to local residents as a result of the health project. Biggest Benefit of Project Better overall care Better basic care. Previous clinic was not really designed to be a clinic. The new clinic building is much better - larger, better equipped, and more comfortable for patients. Agreed with Mayor's comment about the decreased need to travel for higher level of care. More room and better equipped to handle emergencies. The new clinic is a great benefit to the community, providing better technology to healthcare workers and better healthcare to the community. The clinic has had a great effect on the community. The village is isolated on the Aleutians and bad weather often prevents people from traveling to get the care they needed. Now, with the new clinic, more care is provided locally, decreasing the need to travel. There will be more room and better equipment. Better healthcare locally, since access to/from the community is difficult. More room to see patients & newer technology. The facility is cleaner and generally nicer. Less waiting for healthcare needs (medicine, etc.) Not needing to wait so long for an exam room The building is bigger and better, and the service is better. New technology increases health & safety of the community. Expanded community medical services. The clinic is much nicer; it stays warm all the time with no freeze-ups. The old clinic used to freeze up. Better facilities, providing better medical care to residents. Privacy, more space, and warmer building Better facilities for health aide and for people to get better care. It will be dramatic — the clinic will have state-of-the-art facilities with running water. The new building will replace a 40+ year-old clinic; it will be more spacious, allowing for greater privacy and separate exam rooms for emergency & non- emergency situations. There will also be a quiet room for audio testing. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 105 Less need to travel / Ability to handle local emergencies The hope is that fewer residents will have to travel for healthcare. More space and better technology enables the clinic to provide better care to residents and somewhat decreases the need to travel for healthcare. When it is done, the community will be able to deal with healthcare emergencies and other high-level healthcare needs, reducing the need for travel to larger communities. When completed, the new clinic will be able to handle traumas and emergencies (the current clinic cannot). It will also be bigger and nicer, allowing the community to attract a physician to work at the clinic. Access to dental and behavioral health services Other Improved health & dental care for residents. It is a new building everyone enjoys. The old building it replaced did not have space for the dentist and room for behavior health services. They are replacing an old building that was 500-700 square feet, new facility will have space for a dental clinic and behavior health services. The biggest benefit is being able to implement projects quickly. It probably would have taken an additional 5 yrs. without the Denali Commission. Employment. Construction workers were hired for the upgrade and previous jobs were maintained. It created employment, it’s not crowded & has space for visiting mental health and dental health professionals. Renovation to the Cross Roads Medical Center came out of the project. Clinic renovation and possibly a new behavior health clinic (future project). They had done the assessment thinking that it would back up the need for an assisted living facility, but that proved too expensive, so they opted for in-home care. It is a new building — the old clinic had bad plumbing that froze up all the time and it could not be heated properly. They (new clinics) are easy to maintain and keep clean. Seeing the land dealt with for a good cause Mostly local hire, health aides year round job. The renovations helped sturdy it up and the building is now set up professionally, like a health facility should be. Access to low-income healthcare for the region — the clinic has a sliding fee scale. The old clinic burned down during the planning process for the new clinic, so they were able to rush the rest of the project and get it done a lot sooner. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 106 Biggest Problem with Project Lack of space Other The clinic is a little small, but not due to poor planning. The “right” people were involved in the planning process. No storage space in the new clinic. Too small. He said that the local contractor did a poor planning job and did not get enough community input. The building is getting to be too small, and areas not covered by the renovations (outside shell) have issues. The clinic is still too small and the generator was never finished, nor was the floor in the boiler room. No problems with the project, only when power goes off they need more alternative power as what they have is not enough to keep the clinic open. It is just enough to keep things from freezing. Any problems that arose during the project were addressed through round-table discussions and the project ended up with a very low participant-turnover The plan is taking a long time to finish. Because the Denali Commission funding does not cover water and sewer, they had to plan and co-locate the new clinic with the new community center, to utilize its’ water and sewer. The new medical center will accommodate new positions (a doctor, etc.), but the community does not have adequate housing to attract/retain professionals. The project could have been handled with more efficiency (Respondent said getting material into the community could have been done more cheaply). The early clinics were built on post-and-pad foundation. They were less than desirable. Newer ones have been well designed. They are trying to use an existing multi-use building and fit the 2,500 sq. ft. clinic into its 10,000 sq. ft. The outside contractors did not do a very good job. Cost over-run. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 107 6.3 Training Program Overview and Historical Funding The purpose of the Training Program is to provide job training and other economic development services in rural communities, particularly communities that meet the Commission’s “distressed” criteria. The Denali Commission coordinates its infrastructure projects with the job training programs to provide both training and employment opportunities to local residents. Funds are currently allocated to several major partners, each with a somewhat different focus. The Denali Training Fund, managed by the Alaska Department of Labor and Workforce Development (DOLWD), provides training necessary to become employed on the construction, operation and maintenance of Denali Commission funded facilities. Roughly half of the Commission’s training funds historically have been invested through the Denali Training Fund. DOLWD distributes those funds to a variety of training entities through an Request for Grant Application process. In addition to the Denali Training Fund, the Commission Training Program has several “designated grantees.” Designated grantees apply directly to the Commission for funding and include the following organizations: Alaska Works Partnership -— Provides training covering 25 construction and maintenance trade occupations through registered apprenticeship and_ training programs. The Apprenticeship Outreach (AO) assists individuals interested in applying for registered apprenticeship positions. The Building Maintenance Repairer Apprenticeship (BMR) offers carpentry, electrical, plumbing, and interior finish courses. Associated General Contractors (AGC) - Provides Construction Career Pathways Initiative in rural high schools and Construction Skills Assessment of rural construction workers. The construction career pathways initiative certifies teachers in rural schools to teach the NCCER curriculum which provides school-to-work experience for students. The construction skills assessment assesses the skill levels of construction workers in rural communities. AGC does not directly provide training to participants. Alaska Vocational Technical Center (AVTEC) — Provided training for Building Maintenance Repairer and developed the curriculum for the bulk fuel training at AVTEC. Alaska Native Coalition on Employment and Training (ANCET) — Provided development of state wide employment, education, training and economic development issues for rural communities. No participants were trained. University of Alaska Anchorage (UAA) Health Program — Provides allied health workforce training statewide in eight fields. First award in FFY04/FY05 was used for development. First Alaskans Institute — Provides placement opportunities as interns with partner employers for college students to develop leadership training. First award in FFY04/FY05. Cape Fox Native Corporation — Provides training in technology related industries for employment in a multi-use technology center to be built in Saxman. First award in FFY06 /FY07 Denali Commission Program and Policy Review McDowell Group, Inc. + Page 108 According to DOLWD figures, from federal fiscal year (FFY) 2001 through March of 2006 (the most recent figures available) 2,010 unique individuals exited one or more Denali Training Fund trainings with a total of 2,460 total training exits over the five- year period.” Figures in the table below show participation for individual state fiscal years (FY) from FY 2001 through FY 2007. Table 6.3.1 Denali Training Fund Trainings 2000 - 2006 (Number of individuals participating) FY 2001 FY 2002 erat] FY 2004 a7) ) aera) meus TOTALS AO=44 | AO=48 AO=56 AO=67 AO=68 AO=65 AO=56 AO=404 Alaska Works BMR=96 BMR=82 BMR=218 BMR=165 BMR=142 BMR=89 BMR=44 BMR=836 Assoc. General N/A - see Contractors note above i AVTEC 64 | i N/A - see ANCET note above | UAA Health | 549 768 1,317 First Alaskans | Institute i 32 30 29 91 i Cape Fox | 8 8 Total Trainings 204 L 130 274 232 | 242 733 905 2,656 Source: Alaska Department of Labor & Workforce Development Table 6.3.2 Denali Commission Funding to the DOLWD Division of Business Partnerships (2000 - 2006) FFY 2000 aah ara ih FFY 2002 FFY 2003 FFY2004 FFY2005 FFY 2006 TOTALS Denali Training Fund Grants $1,100,000 | $2,386,865 | $2,850,000 | $2,000,000 } $1,500,000 | $3,486,800 | $2,540,832 $15,864,497 Designated Grants: Alaska Works $200,000 $250,000 $250,000 $250,000 | $1,250,000 ; $1,250,000 | $1,250,000 $4,700,000 Assoc. General | Contractors $250,000 $290,000 $0 $250,000 $250,000 $210,000 $250,000 $1,500,000 AVTEC $250,000 | $0 $0 $0 $0 $0 $0 $250,000 ANCET $200,000 | $66,535 $200,000 $0 $0 $0 $0 $466,535 UAA Health $0 $0 $0 $0 | $1,600,000 | $1,350,000 | $1,260,000 $4,210,000 First Alaskans Institute $0 $0 $0 $0 $300,000 $300,000 $230,000 $830,000 Cape Fox $0 $0 $0 $0 $0 $0; $1,000,000 $1,000,000 Designated Sub-Total $900,000 $606,535 $450,000 $500,000 | $3,400,000 | $3,110,000 | $3,990,000 $12,956,535 Total Funding $2,000,000 | $2,993,400 | $3,300,000 | $2,500,000 | $4,900,000 | $6,596,800 | $6,530,832 $28,821,032 Source: Alaska Department of Labor & Workforce Development * Denali Training Fund Participant Performance, Alaska Department of Labor & Workforce Development, Research and Analysis, April 2006. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 109 * DOLWD Div: Training Program Data Information about Training Program impacts was drawn from the following sources: * The Denali Commission’s program status reports * DOLWD, including data requested by the study team, DOLWD’s annual Denali Training Fund Performance reports to the Alaska Workforce Investment Board, and the department's Training Program Performance 2004 report » A telephone survey conducted by the study team with 250 Training Program recipients * Interviews with representatives of designated grantee organizations * Site visits, community interviews, and other interviews conducted for this assessment Program and Project Goals Stated Training Program goals: “To ensure local residents have the skills necessary to become employed on the construction, operation and maintenance of Denali Commission and other public infrastructure projects in Alaska.”~ Following are the Training Program priorities related to training activities that support rural infrastructure: * Priority #1: Training for construction, operations and maintenance of Commission projects * Priority #2: Management training for Commission projects * Priority #3: Youth initiatives in support of Commission projects * Priority #4: Construction, operations, maintenance training of “other public infrastructure~ The Commission’s 2007 Work Plan says: “The Program's mission is to increase the employment and wages of unemployed or underemployed Alaskans through training for careers in construction, operations and maintenance of public facilities.” The Work Plan also notes that the program is guided by the following principles: * Priority on training for construction, operations and maintenance of public infrastructure * Training will be tied to a job * Training will encourage careers, not short term employment * Funding will support a “training system” ion of Business Partnerships website — http: / /labor.state.ak.us /bp /dtf.htm ** Denali Commission website — www.denali.gov / Newsletter.cfm?Section=Training Denali Commission Program and Policy Review McDowell Group, Inc. + Page 110 Application of Policies There is no formal process by which Commission policies are applied to Training Program grants. DOLWD implements the program according to internal policies specific to its own operation, for example with respect to how to prioritize training funds. To the extent applicable, the Denali Commission policies act as guiding principles. For example, the fact that the Commission invests in training rests in part on the rationale that infrastructure sustainability requires local residents to have certain maintenance and repair skills. Performance Measurement The Commission tracks the number and type of training programs it funds in its project database. In addition, DOLWD assembles employment and earnings data for a subset of training participants and uses it to track the following indicators: * Percentage of trainees who have jobs one year after the training * Changes in wages between the four quarters preceding and following the training * Annual employment and earnings for trainees for each year following training Findings Training Program Focus DOLWD’s analysis of employment and earnings data for beneficiaries of the Denali Training Fund is the Commission’s only systematic program impact analysis. The benefits and challenges of the tracking are discussed below. Additional detail may be found in DOLWD’s Denali Commission FY05 Status Report. The report explains that tracking reports typically lag training completion by approximately 18 months due to the type of data needed and the way it is reported. One shortcoming of the DOLWD assessment method is that it does not examine the effects of training on the longevity of Commission-funded facilities, as suggested by the Program and Project Goals, above. To do so would, of course, require research and analysis that is entirely different from what DOLWD is equipped to conduct. The 2007 Denali Commission Work Plan appears to broaden substantially the focus of the Training Program. The program goals from the DOLWD website and the Denali Commission website, above, suggest that training will be only for public infrastructure projects, with a strong preference for Denali Commission projects. However, the 2007 Work Plan includes a number of explanations and “descriptions” that, in sum, make it clear that the Commission will fund training for public and private projects and for virtually any type of job in any area of the state. For example, the description of Priority #3 (Youth Initiatives in support of Commission projects) says the priority means “Preparing Alaskan youth for careers that support the Denali Commission’s mission of building sustainable communities” (emphasis added). Apparently, the Training Program will prepare Alaska youth for any career that has the potential to make communities more sustainable, i.e., any career. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 111 It is not clear whether the 2007 Training Program priority statements reflect development of a new strategic focus or whether they are simply meant to encompass the grants the Commission is already making. The Work Plan, itself, suggests the latter when it says, “Historically, the Commission has provided funding directly to organizations that are able to deliver results in the (expanded) priority areas...” Regardless of its intention, the 2007 Work Plan is an example of why assessing the impacts of Commission programs is so challenging. It might be possible, using confidential DOLWD records, to design a data tracking system that identifies the extent to which trainees are employed on Denali Commission projects and in operating finished facilities funded by the Commission. However, it would be very challenging to show that those individuals have made the projects more sustainable. Moreover, the work plan’s reference to “careers that support the Denali Commission’s mission of building sustainable communities” suggests it might fund any training program in which Alaska youth might engage. Training Program Impacts DOLWD Data Training through the Denali Training Fund appears to improve average total wages per participant, based on DOLWD data. Those data are not sufficient to say what, if any, long term effect training has on rural Alaska. However, there is agreement among experts that training is a key strategy, as evidenced, for example, by substantial multi-agency investment in one Commission grantee, Yuut Elitnaurviat, an ambitious regional training model in Bethel. The table shows results of DOLWD monitoring of Denali Training Fund participants with respect to trends in wages. Wages shown in each line of the table are the total wage for the cohort of trainees who exited a training program in the year shown at the left. (Shaded cells are earnings in years prior to receiving the training). The data suggests that increases in earnings immediately following training tend to be sustained in future years. Table 6.3.3 Annual Wages for Denali Training Fund Trainee Cohorts Exit Fay Wages Wages WE Wages Wages Wages bf ec ae FY 02 FY 03 mae! FY 05 FY 06 2001 60 $567,044 $826,437 $816,380 $736,669 $961,690 $793,613 2002 491 6,840,325 8,533,946 9,028,283 8,398,699 9,222,992 9,349,913 2003 497 6,733,777 7,707,687 9,102,573 9,579,388 | 9,699,579 9,801,808 2004 462 4,798,797 5,711,739 6,356,297 6,924,258 7,325,445 7,149,179 2005 392 4,499,459 5,112,076 5,575,968 5,652,269 6,158,657 6,910,148 2006 108 848,285 1,000,853 1,051,072 1,168,992 1,342,373 “1,697,030 Total 2,010 $24,287,687 | $28,892,738 | $31,930,573 | $32,460,244 | $34,710,736 | $35,701,691 Source: DOLWD * Data for the 2006 cohort is incomplete Denali Commission Program and Policy Review McDowell Group. Inc. * Page 112 DOLWD data also shows the following average increases in annual wages in the four quarters following training, compared with the four quarters immediately before. Additional information ‘requested from DOLWD shows that the average wage increase for all years subsequent to training was somewhat larger than that in the first four quarters. Table 6.3.4 Percent Increase in Annual Average Wages for Denali Training Fund Trainee Cohorts Program Exit Year Increase in avg. wages in the 4 Increase in avg. wages for all quarters following exit compared _ post-training years compared to to the 4 quarters before training the 4 quarters before training 2001 35% 36% 2002 27 36 2003 28 42 2004 8 10 | 2005 11 23 DOLWD had no immediate explanation for why the increase shown in the table for 2004 and 2005 was so much smaller than in prior years. The data above are encouraging. However, there are many potential influences on wages that would need to be accounted for to draw conclusions about longer term impacts. For example, an important determinant of rural jobs and wages is often the operating budgets of local nonprofit service providers such as health corporations and housing authorities. DOLWD produces annual reports on all major Alaska training programs. That data is more comprehensive than the Denali Training Fund data, but also mainly inconclusive. For example, in the FY 2004 report, ratings of training programs by participants are often based on a response rate of less than 30 percent, making the potential for self-selection bias very high. Other Analysis Other analysis provided by DOLWD showed the following: * 90 percent of the 2,010 Denali Training Fund participants likely were still residents in 2005, according to Alaska Permanent Fund Dividend records. * In FY05, at least 86 percent of trainees were employed in Alaska at some time and their total Alaska earnings were approximately $34.7 million. * In FY 05 former Denali Training Fund participants were employed in every sector of the economy. Top sectors included Public Administration (including tribal entities and tribally sponsored projects) (28.4 percent), Trade, Transportation, Utilities (12.4 percent), and Construction (11.7 percent). * Top employers in 2005 include Association of Village Council Presidents (AVCP) Housing Authority, Bering Straits Regional Housing Authority, Lower Kuskokwim School District (LKSD), YKHC, and Tanana Chiefs Conference. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 113 = Top occupations included construction laborers, carpenters, laborers and material movers, operating engineers, power plant operators, water and waste treatment plant operators, and maintenance and repair workers. McDowell Group Survey McDowell Group’s survey of 250 Denali Training Program graduates representing all regions and most rural Alaska communities shows that nearly all participants (95 percent) consider their training valuable or very valuable and 93 percent said the training would be important or very important to their ability to find paid work in the future. About 60 percent of the trainees were already employed when they were trained. Of those already employed, 85 percent were trained in areas related to their current jobs. Of those who were not employed at the time they participated in the training (42 percent), 70 percent said they found paid work immediately following the training. Of those who found work, two-thirds said they would not have been able to get the job without the training. Of those who did not find a job immediately, 40 percent said the training eventually resulted in finding work. The table shows employment status for the past 12 months for those who took the survey. Table 6.3.5 Employment Status of Trainee Survey Respondents otis efeyanetul med coat ey % of Respondents Employed full-time, year-round | 33% | Employed part-time, year-round 22 Employed part-time seasonally 18 Employed full-time seasonally 13 Unemployed, looking for work 6 Unemployed, not looking for work | 1 Don’t know/not applicable 6 " 83 percent of trainees said they work in their home communities. " 87 percent of trainees believe the type of training they received has a positive effect on their communities as a whole. » 98 percent would like to see more training opportunities available. * Two-thirds of the trainees reported household incomes of less than $30,000. = 28 percent of respondents had received more than one training through the Denali Training Fund, according to state records. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 114 Survey Comments At the conclusion of the survey, respondents were asked to comment on how the training they received had affected their quality of life. Overwhelmingly the comments were positive. In particular, respondents said that training had greatly affected their confidence and their ability to do their jobs. The comments have been broadly grouped into six themes, summarized below. Trainees gained new skills, the ability to do a better job or a better understanding of their current job. The majority of trainees were employed at the time of training, and most of them were taking training related to that job. Most, therefore, immediately were able to apply the knowledge and confidence they gained from training. The training resulted in my being able to do my job more professionally. lama better worker and smarter in my field. It helped me a lot. I learned enough to handle the job and more at power plant. Especially to be able to help the village with completing a business plan and assist with some of the comprehensive planning. It opened my eyes to what I was doing. Now it is much easier to do my job. I know more about carpentry so I can do my job better which means I get a lot more work. I was able to take training only because of the Denali Commissions help. It was very positive in my being able to help the community, my ability to administer grants, contracts and many other areas of my job. I learned how to be conservative with fuel, budgeting and knowing the cost of all kinds of fuel. It made me a better carpenter and gave me more knowledge about methods and new materials. Trainees were able to get a job, a better job or take on more responsibility because of the training. It really helped me to get a job right away. It has improved chances of a job and got a good job that will be year-round. It greatly improved because before the training I was unemployed and without the training I could not have gotten this job. Tam now able to continue my schooling because the training got me a job where I could save money. It has greatly affected it. If not for the training I would not have the ability to do pipe welding. I have the good job because of the training. It made me a vital individual in the community. I am able to use formulas and gauge if I'm getting the correct fuel and amounts. It has given me more opportunities to work at different jobs, improving my life. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 115 Trainees were able to get a promotion or make more money. Some trainees said that with a better understanding of the work they were able to take on more responsibility. This resulted in promotions and increases in wages. * It helped me to make a lot more money. * It helped some. I can pay more bills. * It allowed me to stay out of debt and keep paying bills. = Ithelped my family financially. Trainees said the training had given them greater confidence. They said this confidence would help them in other areas of their life as well. = It's been wonderful and has helped me to open up more and not be afraid of tackling new jobs. * It has affected me greatly. It has bolstered my confidence to try new things. It helped me believe in myself to do anything I needed to do. = It was a Godsend when I needed it. Il appreciate the training and the way it made me feel better about myself. * I picked up more confidence in my life by being able to learn and do my job better. = It gave me the experience so I can work and the courage to work on job site with confidence and knowledge of how to do the job correctly. = It certainly made my life easier and I had more confidence in teaching which benefited the students. Trainee general comments. Most of the general comments expressed satisfaction with the training. A few respondents said they experienced less than satisfactory results or specific situations that did not work out as well as the trainees had expected. = It hasn't affected my life because the training didn’t get me into the right position for the opportunities available in my small village. * It has not had an affect, but I expect it to. The training was great. * Not really affected. Wish I had more training. It is having very little effect until I get a steady job. = It has had no affect. He never got to use the training. But it was a good feeling to have finished the training. = Welding class was only five weeks and it was not long enough. It was good but it should have been eight weeks. It was a good experience. = They wouldn’t hire me because | didn’t graduate from high school so I feel it was a wasted two weeks. = They tried to cram every bit of information into our brains. It has been more of a downside because I have been waiting for ANTHC water and sewer to come back and have turned down jobs because they say they are coming and they have not come yet. * Power Utilities generator only one person was sent to training. What if someone quits or gets hurt? Who is going to take the responsibility of learning these tasks on their own? Denali Commission Program and Policy Review McDowell Group, Inc. + Page 116 * I'm the only one up here doing all this and sometimes I can’t do it all myself and I can’t wait for a welder or mechanic to fly in. Sometimes bad weather will keep them from getting here to do the job. Interviews with Training Provider Representatives The following comments are taken from interviews with representatives of the Commission’s major training-partner organizations. How clear is the Denali Commission’s approach to approving training programs? Do the Commission’s priorities and policies make sense? Interviewees said the Commission's priorities and policies make sense in relation to their mission and the training needs for rural workers, particularly training for health, energy and infrastructure construction, operations and maintenance. Some interviewees said the approval process is very “clean” and that the grant application is simple, user-friendly and far less cumbersome than, for example, a State application. However, one interviewee said that the proposal for funding took a great deal of time to complete and they had not received either a template or much guidance from the Denali Commission on developing the proposal. Some said that delays in funding sometimes affected planning and schedules for training programs. What's good about working with the Denali Commission? “The Denali Commission is a good partner for workforce development and more effective than any other agency in Alaska.” One interviewee said that the Denali Commission is a “top performing workforce investment program.” Interviewees commented that the staff and commissioners are very focused on their mission, goals and objectives, as well as being very supportive, helpful and forthcoming with information. Interviewees noted that the Commission staff has developed a strong and effective relationship with DOL to administer the grants. “Denali Commission staff are accessible, thoughtful, and flexible as well as being very open to new ideas and very clear about what they expect. Their knowledge of rural Alaska is one of their strongest points.” Many interviewees noted that the training programs they have been able to implement would not have been possible without Denali Commission funding. As an example of the Commission’s ability to innovate by building on an established framework, a respondent cited the Commission's decision two years ago to provide funds for a competitive grant for younger Alaskans, aged 17-24, to provide them with career awareness, vocational training and employment so they could gain work experience and learn about various career paths. How do Denali Commission training programs differ from other training programs that your agency offers? Commission-funded programs are unusual in that they focus on rural residents. Interviewees said this can make the impacts more significant than those of broader programs. For example, the Commission has partnered with the largest federally registered apprenticeship program for construction in rural Alaska, the Building Maintenance Repairer Apprenticeship Program, which has assisted hundreds of low-income residents in remote communities to get employment building affordable homes (more than 350 to date), thereby contributing to economic development and healthier communities. Respondents also said Denali Commission programs are more flexible and less expensive to administer than state sponsored programs and other federal workforce programs administered by the state. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 117 Are there specific challenges associated with implementing training programs in rural settings as opposed to urban settings? Providing skills training is 3 to 4 times more expensive in rural Alaska as a result of travel and shipping costs, according to respondents. Costs include air and ground transportation costs for students and instructors, shipping costs of tools and materials, meals and housing during training. With rural training, there are more logistics to consider including challenges associated with scheduling training based upon space availability; communicating with trainees, instructors and employers; making travel arrangements; weather; and follow-up after training. Finding and developing qualified instructors to work part-time and travel away from home for extended periods poses its own set of challenges. There is also a need for insurance because of many potential liabilities (potential for injury during hands-on tool training, etc.) Respondents said the Denali Commission understands these obstacles and barriers better than many other grant programs. In the case of UAA Allied Health, interviewees said that there are many challenges associated with implementing online distance-learning programs. For example, it is often challenging to keep students linked with the program and keep them engaged when there is no face-to-face interaction. Do you track the impacts of training programs over time in terms of income levels and employment? Alaska Works has done a great deal of research on training program impacts. They have conducted several short and long-term outcome studies. They have been able to track trainees over time to assess employment and income levels. They report dramatic increases in trainee income levels following training and associate this with poverty reduction. UAA Allied Health, tracks the number of people completing training but does not track employment and income following training apart from the quarterly tracking performed by DOLWD. What's difficult about working with the Commission? Are there Denali Commission policies that have presented unusual challenges? The Denali Commission funds for training are restricted to rural residents. However, the line between rural and urban is beginning to blur. Many rural residents are coming to urban centers for training. The policies regarding serving rural clients should be flexible to recognize the influx of rural residents to urban centers due to the high costs of fuel, fewer jobs, etc. in rural Alaska and the ever growing opportunities for services, training and employment in urban centers. How has information-sharing, joint coordination and communication between your organization, the Commission and other funding agencies changed since the Denali Commission began? Information sharing, joint coordination and communication between agencies and the Denali Commission started out good and have improved due to ongoing relationships that are very responsive to one another’s needs. Communication between agencies is reliable, timely, and without conflict. As a_ result, interviewees said they are able to work together more effectively to make improvements to Denali Commission funded training programs. Interviewees also said communication and relationships with Tribal Health Consortiums have improved as a result of working together on training programs funded by the Commission Denali Commission Program and Policy Review McDowell Group, Inc. + Page 118 6.4 Economic Development Program Overview and Historical Funding The Economic Development Program makes a wide variety of grants. One sub- program is the Initiative for Accelerated Infrastructure Development (IAID). Under IAID, the Commission and the Alaska Department of Commerce, Community & Economic Development provide technical assistance and matching grants to regional organizations for production of community profile maps to assist with community planning and public infrastructure development.” The purpose of the [AID program is to improve local and regional planning and minimize the cost to agencies, communities, and Native organizations of developing projects. It does this by eliminating the need to create individual community profile maps for particular projects. The Economic Development Program also provides funding to DCCED’s Mini-Grant Program, which, in the past, also received funds from the USDA Forest Service. Mini-grants are made by DCCED to support community planning, feasibility studies, business equipment purchases, engineering, design, and implementation of projects that support economic development. The Mini-grant program was originally founded by the State of Alaska in the mid-1980s using state Rural Development Assistance Program funds.” Another component of the Economic Development Program is to help make debt and equity investment capital available to businesses in economically distressed communities. In this regard, the program is one of a number of public and private sources of funds for Alaska Growth Capital. Alaska Growth Capital qualifies as a BIDCO (Business and Industrial Development Corporation) under Alaska law, and is organized to provide both capital and management assistance to businesses throughout the state. Among its other grants, the Economic Development Program has provided funding to First Alaskans Institute (FAI) and Alaska Federation of Natives (AFN). FAI has used Denali Commission funds to help support a variety of economic, cultural and other projects, including leadership and local governance projects. Currently, FAI is conducting a Commission-funded project to develop rural development performance measures that link economic growth to poverty reduction, as called for in the Consolidated Appropriations Act of 2004. The largest component of AFN funding has supported The Alaska Native Center for Excellence. The Center was designed in 2005 to “...develop and implement a cluster of economic initiatives linking economic growth to improved economic development opportunities and improved employment opportunities in rural Alaska.”*' Commission funding has also helped support AFN’s Alaska Marketplace, a competition of business ideas to stimulate private sector entrepreneurship in rural Alaska. In addition to the program components above, the Economic Development Program has provided support for individual projects, for example, an ice rink in Juneau and a dock in Galena, as well as various marketing initiatives, and economic development conferences. * Denali Commission Resolution No. 02-08. * Mini-Grant Program: Community Impact and Program Evaluation, DCCED. May 2006 * Progress Report, July 28, 2005, from the AFN/ ANCSA CEO Representative. On file in the Denali Commission Project Database. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 119 Table 6.4.1 Economic Development Program Funding by Year (1999 — 2006) es Funding Source 1999 2000 rai 2002 2003 rate Pauli} patil) Mini-grant Energy & $482,788 $482,543 | $498,162 $249,346 $250,000 $500,000 Water Mini-grant | HUD 400,000 Alaska Growth Energy & 824,000 1,500,000 | 1,000,000 Capital Water Alaska Growth HUD 500,000 Capital | Galena dock HUD | 300,000 Alaska Marketplace | HUD 275,000 Alaska Marketplace Energy & 275,000 Water Alaska Native | BIA 936,803 Center for Excellence Rural Development | Energy & 250,000 Performance Water Measures | | Alaska HUD | 100,000 Entrepreneurship Development | System/Knowledge | Industry Network Leadership Forum Energy & 20,000 Water Initiative for Energy & 300,000 300,000 300,000 Accelerated Water Infrastructure Development Initiative for HUD 200,000 Accelerated Infrastructure Development | Community Priorities | Energy & 3,816,540 Water Other Infrastructure | Energy & | 370,750 436,141 230,000 137,802 313,790 Water Other Base 8,835 Infrastructure/Admin | Funding | Totals $370,750 | $1,742,930 | $4,599,082 | $2,536,997 | $1,687,148 | $2,211,803 | $1,313,790 | $795,000 Source: Denali Commission staff Denali Commission Program and Policy Review McDowell Group, Inc. * Page 120 ww Table 6.4.2 Total Funding, Number and Status of Economic Development Projects by Program through 2006 Funding Source Total Funding Completed im cect through 2006 gi a) Projects Mini-grant Energy & Water $2,462,839 87 18 t | Mini-grant | HUD 400,000 5 7 Alaska Growth Capital Energy & Water 3,324,000 42 0 Alaska Growth Capital HUD 500,000 0 0 | Galena dock HUD 300,000 1 | 0 Alaska Marketplace HUD 275,000 2 0 Alaska Marketplace Energy & Water 275,000 0 1 | Alaska Native Center for | BIA 936,803 1 | 0 | Excellence | | 1 T Rural Development Performance | Energy & Water 250,000 1 0 Measures | Alaska Entrepreneurship | HUD 100,000 0 i 1 Development | System/Knowledge Industry | | | Network 4 Leadership Forum Energy & Water 20,000 1 0 Initiative for Accelerated Energy & Water 900,000 90 13 Infrastructure Development Initiative for Accelerated HUD 200,000 0 0 Infrastructure Development 4 | Community Priorities Energy & Water 3,816,540 11 | 0 Other Infrastructure Energy & Water 1,488,484 10 0 Other Infrastructure/Admin Base Funding 8,835 1 0 Totals $15,257,500 252 40 Source: Denali Commission staff Denali Commission Program and Policy Review McDowell Group, Inc. + Page 121 Program and Project Goals Program Goals The Economic Development page of the Commission’s website does not articulate a specific program goal, but says, “One of the purposes of the Denali Commission is economic development.” This presumably is based on the Denali Commission Act, which states that the Commission will “...provide job training and other economic development services...” Similarly, the Commission’s mission statement says it will “...develop a well-trained labor force employed in a diversified and sustainable economy.” Project Goals The Economic Development Program supports a wide variety of sub-programs and individual projects. Goals may be very general. For example, DCCED’s Mini-Grant program seeks “... to significantly and positively impact the local economy over a long period of time.” Mini-Grant project goals tend to be unstated but inherent in the grant purpose, e.g. to write a community plan or to perform a feasibility study. Application of Policies According to Commission staff, the Economic Development Program screens projects with respect to the Investment policy. A checklist is used to identify information relevant to each of the policy’s ten conditions. The program uses other policies as informal guidance. Performance Measurement Mini-Grant Program The DCCED Mini-Grant Program conducts regular qualitative self-evaluations. The most recent was Mini-Grant Program: Community Impact and Program Evaluation, DCCED, Division of Community Advocacy, published May 2006. Past evaluations include: = FY 2003 & FY 2004 Mini-Grant Program Evaluation, August 2004. Holly Johanknecht, Denali Commission /DCED Intern. = SFY02 Outcomes, State-Federal Mini-Grant Program, Tessa DeLong, Denali Commission Graduate Intern Initiative for Accelerated Infrastructure Development (IAID) The program had mapped 103 communities as of May 2007. No mechanism currently exists to identify to what end the maps are used. Alaska Growth Capital Alaska Growth Capital (AGC) tracks project-specific loan indicators as well as having more general annual targets for the following: * Total annual financing disbursements to businesses, and Alaska-owned businesses, in communities defined as “distressed” by the Denali Commission © Mini-Grant Program: Community Impact and Program Evaluation, May 2006, DCCED, Division of Community Advocacy Denali Commission Program and Policy Review McDowell Group, Inc. * Page 122 * Total payroll and increase in annual payroll at all companies in distressed communities having loans in the AGC portfolio * Total increase in annual revenues at all companies in distressed communities having loans in the AGC portfolio * Number of technical assistance engagements provided to businesses that operate in distressed communities Other Grants According to program staff, economic development projects are planned and implemented to conform to the general principle of sustainability, but no formal performance measurement is applied. Findings General Findings The sub-programs of the Economic Development Program, described above, are more or less unrelated. There is no obvious way to aggregate their impacts. Moreover, with the exception of AGC, which has the clear, overarching goal of business development, aggregating impacts even within sub-programs is impractical. For example, the Mini-Grant Program funds a wide variety of projects with purposes that range from community planning to business feasibility studies and the IAID maps are designed for a wide range of uses that may or may not include commercial applications. The diversity of components of the Commission’s Economic Development Program suggests a bigger question, raised by several key informants, than whether individual sub-programs are effective. That is whether the Denali Commission may reasonably be expected to accomplish both public-infrastructure provision and private-sector economic growth. Although there is an intuitive link between infrastructure and business development, no Commission documents articulate how they are presumed to interact. It is by no means clear that public infrastructure leads to business development in rural Alaska, except in specific instances such as commercial docks and, possibly, airports. Certainly the type of infrastructure so far developed by the Commission is not necessarily that which is most likely to galvanize the private sector. Without a clear Commission strategy for why and how infrastructure and economic development work together, it is impossible to say whether the Commission’s Economic Development Program funds the right economic development efforts. Demonstrating quantitatively whether the program has an impact might be possible, but would require significant resources. With respect to the Mini-Grant Program, for example, if companies were willing and able to provide consistent financial information, a longitudinal study following the outcome of a fairly large number of feasibility-study grants over a period of 3 to 5 years might estimate the economic activity associated with the business ideas for which the grants were made. It would be less practical to estimate the losses averted by not pursuing ventures shown by feasibility studies to be unprofitable, and less practical still to say how central the role of the mini-grant was in the ultimate outcome. Nevertheless, a similar approach might be applied for grants that fund physical and technical assets. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 123 Estimating quantitative impacts of the third category of Mini-Grants, community planning grants, is impractical even if a control group of non-planning communities could somehow be identified. Challenges notwithstanding, the next sections discuss conclusions that may be drawn about Economic Development Program impacts. Mini-Grant Program Evaluations DCCED’s latest evaluation of the Mini-Grant Program is the most structured and thorough. The May 2006 report notes, “To date, little effort has been invested in following-up with grant recipients regarding grant project development, products, associated community impact, or community feedback about Program strengths and weaknesses.” The 2006 evaluation consists of qualitative interviews with one key informant associated with each of 21 grants made in 2003. The 21 grants were divided into three categories: community planning, feasibility study / business plan, and physical or technical asset development. Within each of the categories, a case study approach was used to identify the results of the grants. The approach was not designed to quantify or evaluate impacts. However, the case studies give a good indication of the types of real benefits grantees obtain from the program. Key informants made anecdotal reference to “improved public safety,” “increased resident input,” “access to new funding sources,” etc., as well as many benefits they said were expected from future developments for which the Mini- grants were a part of the planning process. Perhaps the clearest way to generalize about Mini-Grant Program impacts is to note the wide variety of potential economic development efforts that the grants address at one level or another. Without access to flexible funding such as the Mini-Grant Program, small communities have little opportunity to study and evaluate the options and opportunities available to them. Alaska Growth Capital Performance Report AGC’s 2006 Annual Report to the Denali Commission shows that the BIDCO substantially exceeded its targets for “Outstanding” performance for nearly all the measurements listed above. For example, it exceeded its benchmark for “total annual payroll at all AGC-financed companies in distressed communities” by $25,560,002 or 1,600 percent. Presumably, AGC and the Denali Commission have analyzed the reasons for the exceptional performance and/or will re-examine the basis for the targets. None of AGC’s performance measures directly addresses life, health, safety or quality of life. However, the benchmarks have the advantage of being fairly simple to track. The AGC benchmarks related to impacts are increases in annual revenue and payroll. However, many factors influence these measures. More information would be needed to judge the degree to which changes in revenue and payroll actually result from specific AGC investments. Site Visit Observations Because of the wide range of types of economic development grants and the fact that most grants are relatively small, site visit teams did not attempt to assess them individually. AGC has made business investments in Nome and Bethel, but none in the smaller communities where site visits occurred. Craig and Klawock are the only site visit communities with community maps funded by the Denali Commission. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 124 6.5 Teacher Housing Program Overview and Historical Funding In FY04, Congress directed the Denali Commission to address teacher-housing needs in rural Alaska. The Commission launched a statewide survey of 51 school districts to prioritize teacher-housing needs. The survey demonstrated that a critical issue for rural teachers is finding safe, affordable housing during the school year. Teacher turnover rates are high in rural Alaska, with many teachers citing unavailable or inadequate housing as a factor in their decisions 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. The Commission partners with the Alaska Housing Finance Corporation (AHFC) to implement the Teacher Housing Program. AHFC administers an annual RFP process and manages teacher housing projects on behalf of the Commission. Teacher Housing funding is 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. Table 6.5.1 Status of Teacher Housing Projects as of 12/31/2006 Design 8 Construction 10 Complete 21 Source: Denali Commission staff FY 2004 was the first year of funding for the Teacher Housing Program. Table 6.5.2 Sources of Teach Housing Program Funding paiiy§ 2005 yay) AKele 1 Base Funding $3,615,800 $3,027,998 $4,854,145 $11,497,943 Loan Financing 1,429,803 4,229,190 5,650,993 Local Match 231,200 600,000 1,320,000 2,151,200 AHFC 977,882 - 2,730,357 3,708,239 Total $4,824,882 $5,057,801 $13,133,692 $23,008,375 Source: Denali Commission staff Denali Commission Program and Policy Review McDowell Group, Inc. + Page 125 Program and Project Goals The program is congressionally designated with the goal of providing safe, affordable housing for rural teachers during the school year. Project goals vary as projects include acquisition, rehabilitation, new construction, and multi-site rehabilitation. Application of Policies Financial Assistance Award documents stipulate, “All projects will be required to meet Commission guiding Principles and Policies.” Business plans are not required, but applicants must demonstrate their ability to collect rent and manage buildings. AHFC periodically monitors building condition. AHFC limits the maximum grant award to 80 percent in “cost-containment areas” and 50 percent in non-cost- containment areas. Other policies are used as guidelines or are not applicable.” Performance Measurement The financial Assistance Award documents identify construction milestones and require grant recipients to obtain a Certificate of Occupancy for the finished facility. The Denali Commission database tracks the status of planning and construction. Findings High teacher turnover in rural communities is a well-documented problem. Priorities were established in a 2004 study for the Denali Commission performed by NANA Pacific. Site visits and interviews with school officials indicate that lack of acceptable housing is a major factor in teacher turnover and that improved housing has made it easier to retain good teachers. Lower Kuskokwim School District estimates that at least 70 percent of teacher applicants cannot be considered because the district cannot meet their housing needs (for example, private housing that is appropriate for a couple or family, rather than shared housing). The following chart shows teacher turnover for the past ten years. The district believes that newly built or renovated teacher housing is at least partly responsible for the downward trend in turnover since 2000. *’ Personal communication, Denali Commission program staff. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 126 LKSD Teacher Turnover 1997-2006 25% 20% . 1% 15% + 10% | 11% -s e078 VD s"@<oO5O 7 f+ 5% - 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Year Site Visit Observations Two teacher housing renovation projects were observed during site visits in Kwethluk and Napaskiak. The Denali Commission funded the renovation of 8 units in Kwethluk and 2 units in Napaskiak. In Kwethluk, Denali Commission provided $117,781 with an equal amount provided by the Lower Kuskokwim School District. AVCP Regional Housing Authority performed the work, which is complete. In Napaskiak, the arrangement was identical, with $38,857 from Denali Commission and matching funds from AVCP Housing. That work is in progress. Key informants believe that teacher housing and the resulting continuity of staff are key to better village education outcomes. Further, they say housing improvements would not have happened without Denali Commission funding. Prior to the Commission, the funding had to be piece-mealed as it became available, an inefficient process. The district notes that there used to be an “exodus” of teachers from the villages into Bethel. Reportedly, that is changing. Key informants reported that teachers are staying in villages for a longer period of time. Residents of Kwethluk also emphasized the importance of teacher housing and ascribed much of their past turnover to inadequate housing. According to key informants in Napaskiak, when a tribal housing application to USDA became bogged down in paperwork, the tribe built one unit itself because they considered it very important for teacher retention. Community Interviews Conversations with local residents in Kwethluk and Napaskiak indicated that better housing has been important to attract and hold teachers. One resident said that, in addition to renovations funded by the Denali Commission, the tribe had obtained other funding to address the teacher housing shortage. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 127 Key Informants Representatives of Teacher Housing Program-partners said that Denali Commission projects have fostered better communication and coordination among funding agencies. Partners said that “they have come to understand and appreciate each other better.” Those interviewed said that Denali Commission staff have demonstrated a willingness to provide timely information and guidance and have always been “receptive and responsive to questions and concerns.” They also said that teacher housing projects could not have happened without Denali Commission funding. Partners expressed some frustration over balancing their own processes and requirements with those of the Denali Commission. It is perceived that the Denali Commission does not always acknowledge partner processes. Informants commented on the additional level of review that projects must go through, which can be time-consuming and has occasionally delayed construction. In general, partners said that they would prefer the Denali Commission to be “more hands off and let us be the experts.” Informants noted that whenever it is possible and practicable, they use local hire during the construction of teacher housing units and they keep track of the number of locals hired to work on projects. However, it is not uncommon for contractors to be brought in from outside the communities. Local hire during teacher housing construction remains between 30 and 40 percent. Partners said there is no system in place to track the impacts of teacher housing, in terms of teacher retention, quality of education and student performance. However, they periodically monitor the housing units to assess the need for maintenance and repair. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 128 6.6 Transportation Program Overview and Historical Funding The Transportation Program has two primary elements: roads and waterfront development. The road program primarily targets the need for basic road improvements in rural Alaska. It also explores opportunities to connect rural communities to one another and the state highway system, and opportunities to enhance rural economic development. The waterfront development program is designed to address port, harbor and other waterfront needs for rural communities. On August 10, 2005, President Bush signed H.R. 3 - Safe, Accountable Flexible Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) into law. This Act provides the Denali Commission with $15 million annually for fiscal years 2005 through 2009 for a Village Roads Program. The act also provides the Commission $10 million annually for Fiscal Years 2005-2009 for docks, waterfront development projects and related transportation infrastructure. The act required the formation of a Transportation Advisory Committee, with members appointed by the Governor of Alaska. The nine-member committee is designed to guide the new Denali Access System's Roads and Waterfront Development program. Key committee responsibilities include: recommending transportation priorities and funding strategies, developing public involvement and coordinated planning programs, developing annual capital _ budget recommendations, and coordinating on multi-region projects. Table 6.6.1 Department of Transportation Funding Sources and Amounts FY 06-07 Source BU Bec Program Admin | FY 2006 | US Dept. of FHWA* Sec 1960 $12,919,500 $12,273,525 $645,975 Transportation FHWA Sec 1934 5,155,200 4,897,440 257,760 FHWA Sec 112 - - - FTA** 4,900,500 4,655,475 245,025 18,074,700 903,735 FY 2007 US Dept. of FHWA Sec 1960 13,810,738 13,120,201 690,537 Transportation FHWA Sec 1934 - - - FWHA Sec 112 1,980,000 1,881,000 99,000 Totals $15,790,738 $15,001,201 $789,537 Source: Denali Commission staff * Federal Highway Administration ** Federal Transit Administration Denali Commission Program and Policy Review McDowell Group, Inc. * Page 129 Findings Experts familiar with the program said it is designed to act strategically and expeditiously to fund projects that represent a clear need but do not qualify for other types funding. The concept of an expert advisory panel to identify and help prioritize projects has broad support. Projects are too recent to estimate impacts. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 130 6.7 Other Programs (Multi-use Facilities, Washeterias, Solid Waste) 6.7.1 Multi-use Facilities Program Overview and Historical Funding A Multi-use Facility is a facility that provides space for two or more uses. The program is designed to encourage consolidation of compatible essential community services, eliminating duplication of services and increasing the efficiency with which services are delivered. A variety of uses may be consolidated into a single facility, but priority for funding under this program goes to uses associated with life, health and safety. Commission-funded healthcare, washeteria, or other facilities may occupy portions of a Multi-use Facility project subject to the rules of the respective program including match requirements. The Division of Community Advocacy manages the Multi-Use Facility Program for the Denali Commission. As of mid-2007, 10 multi-use facility projects have been completed, and six are in process. Two of the projects in-process, one in Marshall and one in Tanacross, have halted construction until the Commission and its partner resolve project issues that may require some redesign. Twelve more projects have received planning / design funding and are in the development process. Total funding has been approximately $12 million. Funding for the Multi-use Facilities Program is authorized by the federal Energy and Water Bill. Program and Project Goals The program is congressionally designated and has no explicit goals. Multi-use buildings are, by definition, inconsistent in use and purpose. The study team did not have an opportunity to observe a completed multi-use facility. Of those listed as complete in the project database, building functions are described as follows: Denali Commission Program and Policy Review McDowell Group, Inc. + Page 131 Table 6.7.1.1 Multi-use Facility Project Purpose Community Multi-use Facility Purpose Kachemak Construct a fire station and community hall at Mile 12 East End Road to provide fire suppression and emergency medical services and a facility for meeting and functions for approximately 2,325 residents of Fritz Creek and Fox River Saint George This facility will include a community siren/alarm system and three bays for garaging the 2 community fire vehicles and the ambulance. It will also include a locker room, bathrooms, showers, a VPSO office, 2 holding cells, and a safety equipment protection area. Quinhagak A youth center & multi-purpose building which will include a health education and youth activity area, community resources room, and the YKHC/NVK Mental Health Office (see Community Perceptions, below). Marshall The facility is not complete. It will include a meeting hall, police station, offices, training and meeting rooms, kitchen, men's and women's restrooms, shower facility, storage space, HVAC system, and all electrical & water/waste water systems. McGrath Renovation of the facility was completed at the end of 2006. The two-story building includes a meeting space and kitchen. Port Graham This facility will include a fire hall, medic/emt response center, VPO/VPSO/State Trooper space, and response vehicle garage space. Tanacross The facility is not complete. It is planned to consolidate all health, safety, and social services for the community of Tanacross into one energy- efficient, centrally located building. Togiak This renovated facility will house behavioral health and family services which are provided by 9 separate programs. It will also house a child care center, itinerant lodging, and a conference and meeting space. Tuluksak This facility will contain a post office, youth-related program offices, and a multi-purpose area. The programs housed in the building will be: YK Mental Health Program, Early Childhood Program, and Cook Inlet Tribal Council Youth Program. Wrangell This facility will house a museum, civic center, visitor center, theater, meeting rooms, classrooms, courtyard and restrooms (see Community Perceptions, below). Sleetmute No description — “Core Services Facility” Delta Junction No description — “Career Advancement Center” (see Community Perceptions, below). Source: Denali Commission Project Database Business plans for the facilities are not available in the Commission database, but a sample was provided on request (see Community Perceptions, below). Denali Commission Program and Policy Review McDowell Group, Inc. * Page 132 Application of Policies A checklist is used to identify information relevant to each of the Investment Policy’s ten conditions. Business plans are required and financial projections must show that revenues can meet expenses, including a reserve for renewal and replacement (R&R). Grant applications require a resolution of compliance with the Open Door policy. Community cost-share matches vary according to whether communities are classified as distressed or non-distressed. Performance Measurement Performance measures are limited to output indicators in the Commission database. Findings Partner Perceptions Representatives of Denali Commission partners who have been involved in the Multi-use Program say their interactions with the Commission have been positive and productive. Comments include: = Commission staff are typically accessible and responsive. “They get back to us right away when we have questions or concerns.” = The Denali Commission has been very good at bringing different funding agencies together to make projects happen. Relationships and communication between funding agencies has improved as a result of Denali Commission coordination. * Denali Commission has made funding available for projects that would not have otherwise happened. The program partners also indicated that they do not conduct formal tracking or monitoring over time of how facilities are being used. Community Perceptions After reviewing additional documentation provided by the Denali Commission, the McDowell Group spoke with representatives of three communities — Delta Junction, Quinhagak, and Wrangell - that have completed multi-use facility projects. One difference between the three communities is the proportion of total project funding that came from the Denali Commission. The project in Quinhagak received nearly half (42 percent) of its funding from the Commission, while the project in Wrangell, which was more than six times larger, received less than ten percent of its funding from the Commission. Delta Junction Delta Junction’s Career Advancement Center was completed in 2005 for a total project cost of $1,518,875. The Denali Commission provided $407,000, 37 percent of project funding. The Center is currently owned by the local school district, which does financial administration. Operations management is shared by a few partnering community organizations who were integral in planning and implementing the project. It is likely that the partnering organizations will assume financial management of the facility and be responsible for long-term operations in the next year or two. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 133 Designed for multiple uses, such as providing a base for emergency equipment and serving as a community emergency shelter, the Career Advancement Center primarily serves as an educational facility, holding college preparatory classes, introductory vocational courses, a construction training academy, and programs offered by federal or state government, or social service organizations. Specifically, the construction-training academy has gained state-wide recognition for its success in preparing young adults for the construction industry. The Center is also used to host annual career fairs. The community sees the Center as an extremely successful project, with more than 500 students having attended classes, trainings, or other programs at the Center thus far. The project has evolved as it had been envisioned, with continued enhancements over the years. The Career Advancement Center operates within budget, but the partnering organizations would like to increase programming and are currently reviewing the fee structure. Specifically, they would like to start a construction- training program for older adults, who are not eligible for participation in the current construction academy. While they have not been able to contribute as much as they had hoped pre-project, the Career Advancement Center in Delta Junction has been able to contribute some funds to a repair and replacement (R&R) fund. One informant explained that having the partnering organizations support the Center was key in allowing them to make contributions to and R&R fund. The informant said it would be challenging for such a facility to fund R&R without help from partners, especially during the first few years of operations. Quinhagak The Quinhagak youth and multi-purpose center was completed in 2005 for a total project cost of $1,332,993. The Denali Commission provided $553,515 and grants from the State, Rasmuson Foundation, HUD’s Indian Community Development Block Grant (ICDBG), along with local matching funds, provided the remaining $779,478. The project was completed on time and is considered a big improvement by the community. The Center is operated by the Native Village of Quinhagak and holds group events, youth programs, trainings, camps, and dances. One staff member of the Native Village commented that it uniquely provides a safe communal space for children to gather after school, as well as a supervised space for teen gatherings during evening hours. Although the Center has not been used as much as the community had hoped, the Native Village is hoping use will increase in upcoming years. They are applying for additional grants to fund more programs and are trying to start a program focusing on elders, youth, and cultural connections. Current operating finances are not yet within budget. The Commission application projects annual revenues at $138,814 (which includes outside funding for staff wages, rental income, and revenue from concessions), and annual expenditures at $112,911 (which includes staff wages, utilities, and maintenance). According to the Native Village of Quinhagak, FY 2006 revenues were $2,446 (resulting from community fund raising) and expenditures were $8,394. The Native Village Department of Gaming provided funds to pay for expenditures not covered by revenues. For FY 2007, revenues were $800 and expenditures were $9,169. This does not include staff wages, which appeared in the budget as roughly $82,000 in revenues and as $98,000 in expenses, and but were not part of the “actual” figures. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 134 Wrangell Completed in 2005, the Wrangell multi-use facility includes a museum, visitors’ center, convention facility, and movie theater. It was funded by four organizations, including the Denali Commission, in addition to a large local contribution. According to a community and facility representative, the application processes, of which there were many, were fairly easy. Funds for grant writing help were provided by the Rasmuson Foundation. Denali Commission funding, which was $675,000, was a small portion of total project costs, $8,154,240. The project has had a large positive impact on the community and is extremely well liked by visitors, according to interviewees. Despite changes in the Wrangell tourism market, which were out of the project's control, the project has been financially successful/sustainable. The facility’s convention center and movie theater have provided more revenue than budgeted, which helps cover the loss in expected revenue from the museum. Museum revenue was budgeted based on one large cruise ship visiting Wrangell each week, but this service was discontinued shortly after the facility opened, making visitor numbers to both the community and the facility lower than expected. Additionally, interest from an endowment left for the project has earned higher investment rates than planned, providing the facility double the budgeted revenue from the endowment. With the increase in national fuel prices, operational expenses, such as heating and maintaining air quality in the museum, for the project have been higher than originally budgeted. Costs have increased so much that the facility is considering converting to electric heat because a potential discount from a local electricity provider could make operational costs lower than they are with heating fuel. 6.7.2 Washeterias Program Overview and Historical Funding The Washeteria Program was initiated in FFY 2002, based on Congressional direction. Initial funding consisted of $5 million from the Commission’s Energy and Water Appropriation (“Base” funding). The program also received funding in FFYs 2003, 2004 and 2005. The program provides planning, design, repair-and-renovation, and construction funding to community shower/watering and washing facilities, commonly called washeterias. The Washeteria Program is managed by the Commission’s program partners, the ANTHC and the Village Safe Water (VSW) program at the Alaska Department of Environmental Conservation (DEC). A “universe of need” — that is, a prioritized list of specific future projects — has not been identified for the program. Therefore, projects are nominated by ANTHC and VSW and are awarded by RFP. As of the end of 2006, 17 projects had been completed and 7 were under construction. The Commission does not anticipate allocating funding to the program in the immediate future. Washeteria funds have been allocated from the Commission's base funding and were awarded as follows: Denali Commission Program and Policy Review McDowell Group, Inc. + Page 135 Table 6.7.2.1 Washeteria Program Funding Recipients Recipient Organization Funding Amount Funding Year Community Alaska Native Tribal Health Consortium $2,874,010 2002 General Alaska Native Tribal Health Consortium | $349,534 2003 General Alaska Native Tribal Health Consortium $401,773 2005 Kwigillingok Alaska Native Tribal Health Consortium $662,000 2005 Ruby Alaska Native Tribal Health Consortium $697,000 2006 Pitka's Point Alaska Native Tribal Health Consortium $2,557,012 2007 General Total ANTHC $8,605,103 Birch Creek Tribal Council $100,000 2003 Birch Creek Buckland, City of $117,422 2005 Buckland Department of Environmental Conservation $242,000 2005 Emmonak Department of Environmental Conservation | $2,008,640 2007 General Total DEC $2,250,640 | Emmonak, City of $1,000,000 2002 Emmonak | Hooper Bay, City of $8,295 2003 Hooper Bay McGrath, City of $28,937 2003 McGrath Native Village of Napaskiak $1,025,000 2003 Napaskiak Sleetmute Village Council $360,000 2002 Sleetmute Stevens Village IRA Council $40,000 2002 Stevens Program and Project Goals The program is congressionally designated and has no explicit goals. Washeterias are the only source of potable water in some villages. In other communities, the washeteria represents the only access most residents have to shower, laundry and flush-toilet facilities. Application of Policies Business plans are required and must show that other Commission policies (Sustainability, Investment, Private Enterprise, etc.) will be complied with. Washeterias must not compete with private laundromat businesses. Performance Measurement Performance measures are limited to output indicators in the Commission database. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 136 Findings Washeterias are widely regarded as critical health facilities in that they are one of the few, and sometimes the only, sources of potable water in many villages. They are also somewhat challenging to build and maintain, and must be managed in a business-like way if they are to be sustainable. As with multi-use facilities, on-site business plan monitoring would seem to be the most effective way to ensure that washeterias are being operated sustainably. The washeteria project at Emmonak (see below) is something of a primer on what can go wrong in bush construction. At the time of the building’s completion in 2005, an engineer’s report identified a long list of structural, electrical and mechanical shortcomings serious enough to make the building unusable. VSW, the Commission's partner on the project, is working to resolve the issues and expects to facilitate repairs in the coming months. On the other hand, an assessment site-visit team-member was able to visit a new washeteria in Napaskiak that appeared well constructed and was to open shortly. The Napaskiak facility was built primarily by local labor, and was clearly an object of local pride. (Please see the Site Visit Reports in the Appendices). As of July 2007, 20 washeteria projects had been completed with funding from the Denali Commission and six were under construction. Success of the projects varies, but residents say almost all have considerably improved community sanitation and made day-to-day life more convenient. After reviewing documentation provided by the Denali Commission and other project partners, the McDowell Group spoke with three communities that have completed washeteria projects. In two cases, Buckland and Emmonak, local governments served as project oversight. In the third, Stebbins, the project was facilitated and managed by ANTHC. Buckland The 2005 repair and renovation project to the Buckland washeteria is considered a successful project. There were no major delays, the facility has been working well since project completion, and there is capacity to serve some additional population growth. The original washeteria had been built nearly 25 years ago for a population of roughly 150. Buckland currently has 450 residents. The City of Buckland was the award recipient of Commission funding and acted as project oversight. The engineering firm that designed the washeteria renovations also helped the City with the Commission application process, including writing the project business plan. The City was responsible for filing quarterly project reports and receiving grant payments. According to the business plan submitted in the application to the Commission, the project was budgeted at $109,100. The actual project cost was $127,400, including $117,400 from the Commission and $10,000 from local contributions. The business plan estimated annual revenues of $43,100 and annual expenditures of $36,300, but according to the City of Buckland, actual revenues between July 1, 2006 and May 31, 2007 (11 months into the fiscal year) were $148,600 and actual expenditures were $102,300. The City of Buckland owns and operates the facility and the discrepancy between the budgeted and actual figures appears to reflect City financial reporting practices that do not fully isolate the washeteria amounts. In particular, an important revenue source for the city is the sale of water to the local school and the purchasing of water is a large city expenditure. Contacts at the City of Buckland were unable to differentiate the figures. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 137 Emmonak Construction on a new Emmonak washeteria ended in 2003 with a total cost of more than $1 million. Unfortunately, the facility has never been operable due to an unstable foundation and cracks in the facility walls. The design was modeled on two other recently built structures in the immediate area of the washeteria site and included input from local representatives. Well into construction process all three buildings began to show significant frost heaving damage and the project was halted. The Denali Commission now plans to award $800,000 to an intermediary project manager, Village Safe Water, in order to repair and open the Emmonak washeteria. To mitigate structural problems caused by frost heaves, the City of Emmonak, which will own and operate the washeteria, plans to heat a crawl space below the facility floor to prevent the permafrost directly below the structure from freezing. The facility will include washers and dryers, a sauna, showers, and restrooms. To cover operating expenses, the city intends to increase the city sales tax by 1 percent and increase washeteria user fees to $6. Additionally, the washers and dryers will be altered to run more efficiently, enabling them to use less time and less power. Interviewees say that throughout this long process, the City of Emmonak has maintained good relations with the Commission and has found Commission staff accessible and reasonable. Stebbins The Stebbins washeteria project replaced an older facility that had burned down with a larger, more efficient facility in 2005. Deemed successful by both the community and the facilitating organization, ANTHC, the new washeteria has been well maintained and used nearly to capacity by community residents. ANTHC was the award recipient and managed project construction. Although a copy of the project business plan was unavailable, the Denali Commission database shows that the project was completed within budget, at $1,035,600. The Commission provided $885,600 in funds. Positions that existed at the previous washeteria have been preserved and the same staff now works at the new facility. 6.7.3 Solid Waste Program Overview and Historical Funding The Solid Waste Program began in 2005 with initial funding of $1 million from USDA Rural Development. Funding in 2005 was $1.5 million and in 2006, $742,500. As of the end of 2006, 28 projects were complete and 11 in progress. Program awards have been provided to 27 cities, 11 tribal organizations, nine non-profit community organizations and three boroughs. To date, the program has issued four competitive Requests for Proposals to identify and select projects. It is anticipated that the next Request for Proposals will be issued in August, 2007. Subsequent to that round of funding, Solid Waste Program awards will be granted through program partners and not directly to individual recipients Denali Commission Program and Policy Review McDowell Group, Inc. * Page 138 Program and Project Goals The program's mission is to address deficiencies in rural Alaska solid waste disposal sites that threaten to contaminate rural drinking water supplies. Application of Policies A multidisciplinary review panel has reviewed Solid Waste Program grant proposals to ensure that projects conform to the Denali Commission’s due diligence and policy requirements. The panel typically uses a check-list to help identify areas of compliance and non-compliance. Performance Measurement Performance measures are limited to output indicators in the Commission database. Findings Burn boxes, recycling bins, and balers are typical purchases with these mostly smaller grants. The site-visit teams encountered the following Solid Waste projects. Table 6.7.3.1 Solid Waste Grants in Site-Visit Communities Community Equipment Purpose Purchase of one skid steer with bucket and forklift attachments and four 20-foot cargo containers. The skid will be used by the City’s Solid Waste Bethel Coordinator to store, load, and move recyclables to and from commercial baler previously funded by the Denali Commission that has reduced the amount of waste being deposited in the landfill. Port Lions Bear-proof dumpsters and a dump truck Threshold Services Inc on Kodiak Island is a community-based business Kodiak to handle municipal solid waste. This award is to purchase waste oil furnace, a vertical baler and additional collection totes. Transfer facility demonstration project. The community was able to close | } Craig/Klawock its landfill to raw municipal waste. L Source: Denali Commission Project Database The four projects above appear to function as planned. For a more detailed discussion of these projects, please see the Site Visit Reports in the Appendices. While many Alaska communities — rural and urban — have severe municipal solid waste challenges, it is not obvious how the Denali Commission program establishes priorities. The program seems to meet local needs in the sense that funding is in response to local requests for specific equipment submitted through an RFP process. The assessment team is aware of one community where a burn box did not function as expected and needed to be redesigned. Solid waste projects tend to be smaller, more straightforward projects than those of most other Commission programs. Seven of eight total projects have been completed as of July 2007 and total project costs range from $40,000 to $728,000. Because most projects are equipment purchases and do not require major construction, project management is typically not challenging. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 139 It appears fairly common for equipment vendors that regularly supply rural Alaskan communities with solid waste equipment to help communities write business plans and complete grant applications for Commission funding. After reviewing available documentation provided by the Denali Commission, the McDowell Group spoke with representatives of two communities that have completed solid waste projects, Cold Bay and Pelican. Cold Bay The community of Cold Bay received $125,066 in funding from the Denali Commission for two solid waste projects, a burn box in 2004 and protective fencing to surround the burn box in 2005. The applications for both projects were completed by the Aleutians East Borough on behalf of Cold Bay and included business plans as required by the Commission. The City of Cold Bay was the award recipient. The fencing project business plan indicates that $35,000 of Commission funding was used for that purpose. The remaining $90,066 went towards the purchase of the burn box. When initially delivered, the new Cold Bay burn box was not as efficient as the community's current system because, according to interviewees, it was too big and inefficient to operate. One account indicated that there may have been a lack of communication / understanding between the community and the equipment vendor. An Aleutians East Borough representative said that a larger burn box was purchased on purpose because future Denali Commission funding was considered uncertain. Until January 2006, the City of Cold Bay continued to operate primarily the old burn box and use the new one as a secondary option. At that time a Cold Bay public works employee modified the new box to work more efficiently and they now use each burn box roughly 50 percent of the time. The fencing project was budgeted for $43,015, including a $35,000 grant from the Denali Commission and $8,015 in local cash and in-kind contributions. It was completed in a timely fashion and on budget, and is considered very effective in preventing bears from getting into the community's trash in and around the burn box and also in preventing trash from being blown out of the burn box area by wind. Pelican The Pelican burn box project was budgeted at $109,700, with $54,850 in Denali Commission funds and the same amount in local contributions ($20,000 cash and $34,850 in local in-kind contributions). The Commission website suggests the project was completed under budget with only 73 percent of local contributions spent to date. However, the Mayor of Pelican said that all local contributions have been used and that the discrepancy likely is due to confusion in tracked/logged hours on the in-kind contributions made by the community. The burn box has been working as well as hoped over the past two years. No scientific testing has been done, but less visible ash blows onto surrounding land and into the nearby watershed. There are also fewer sightings of bears in the burn-box area, which had been a problem in the past. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 140 6.8 Government Coordination Program Overview and Historical Funding Government Coordination is an effort to address some of the requirements of the Denali Commission's establishing legislation (see section following) by leveraging the impact of the Commission’s inter-agency Memorandum of Understanding. There have been two major components to the Commission’s overall efforts toward governmental coordination: workgroups and pre-development efforts. * Workgroups (Planning, Housing & Infrastructure, Sustainable Utilities, and Insurance). These workgroups engaged relevant agencies on the relevant subject matter, and encouraged collaboration and coordination on issues broader in scope than Denali Commission funding. The Planning workgroup and two ad hoc work groups are currently active.(Section 4.2). Current changes are underway to develop a new strategy for the intergovernmental MOU originally developed at the Commission in 3000 (see section follow ing). * Pre-Development. The Pre-Development Program was established through a joint agreement between the Alaska Mental Health Trust Authority, the Denali Commission, The Foraker Group, and the Rasmuson Foundation to assist organizations to plan for successful capital projects. "Pre-development" describes the phase of a construction project between the origination of the idea that a facility is needed through to the initiation of design. The funding agencies were concerned that inadequate planning during this phase could 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 a documented need, are consistent with strategic /community plans, consider opportunities for collaboration, have appropriate facility and site plans and realistic project budgets, are financially sustainable and finally, that the project will not negatively impact the sustainability of the proposing organization In the past, Government Coordination has not had a specific budget allocation. Recent Changes As of July 2007, the Commission’s MOU is being updated to reflect a new structure for government coordination. Commission staff have recommended a new workgroup structure that will include three permanent groups: * An MOU Partners Workgroup that will bring the Commission and its partner agencies together twice a year to promote collaboration and networking. * A Sustainable Infrastructure Workgroup to focus on rural infrastructure planning, inter-related federal and state projects, and best practices for sustainability. * Continuation of the Planning Workgroup focusing on community planning. The new workgroup structure will also provide for various possible ad hoc groups. These may address the needs of particular communities or particular issues, such as climate change. The chart on the following page was provided by Commission staff. It summarizes the proposed changes under the 2007 MOU. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 141 Denali Cominission 2007 MOU Workgroups Proposed Workgroups - 2007 MOU MOU Partners Workgroup | (Status - New) Sustainable Infrastructure Workgroup (Status - New) Planning Warkgroup (Status - Active) Active Ad-Hoc Workgroups - 2007 MOU Buckland Workgroup Newtok Workgroup (Status—Ad- Hoc) (Status- Ad-Hoc) 007 MOU qenenn i Science and Engineering : (Possible Ad-Hoc) t Clima Change (Possible Ad-Hoc -2 i ; A ane ome wannnnemeeuexmxansousnae xaneomenaxnenenenanrexemeenexer? Discontinue CEPRA, Sustainable Utilities and Housing and Infrastructure. Housing and Infrastructure Workgroup (Status - Inactive - Discontinue) Council on Economic Policy for Rural Aluska (CEPRA) Status - Inactive - Discontinue) Sustainable Utilities Workgroup (Status - Inactive - Discontinue) Program and Project Goals Discussion of Government Coordination in the remainder of this section refers to Commission efforts prior to January 1, 2007. Overall goal: “To deliver the services of the federal government in the most cost-effective manner possible . eliminate duplication, share resources, and bring a ‘best practices’ approach to doing the public’s business.” Past individual workgroups have adopted the following purpose statements: Housing & Infrastructure Workgroup “Engage relevant federal and state agencies, regional housing authorities and nonprofits involved in development of rural Alaska housing and infrastructure. Address rural infrastructure planning and coordination issues, such as interrelated housing and utility projects, as well as the availability of housing for rural professionals such as teachers and nurses.”*° * Denali Commission web document: Housing and Infrastructure Summary.doc, 07-12-06 Denali Commission Program and Policy Review McDowell Group, Inc. + Page 142 Statement of Housing and Infrastructure Workgroup objectives: “Provide technical advice support for Denali Commission housing programs. Promote collaboration in research and development of healthy, durable, energy-efficient and economically sound housing throughout rural Alaska. Evaluate and make recommendations for incorporating enhanced energy efficiency into Denali Commission capital projects. Promote coordination between rural Alaska infrastructure and housing agencies (including regional housing authorities, non-profits, municipal and tribal governments). Develop Phase II of the Housing Needs Assessment (shared housing and infrastructure database.)”* Sustainable Utilities Workgroup “Engage relevant federal and state agencies, utility associations, non-profits and utility organizations involved in delivery of rural Alaska electricity, water, sewer, solid waste and bulk fuel utility services. Collaborate in developing recommendations. Promote and implement those recommendations.” 38 Statement of Sustainable Utilities Workgroup objectives: “Develop Alaska-specific affordability index study for rural Alaska water and sewer utilities Support Rural Utility Cooperative (RUC) and Alaska Village Electric Cooperative (AVEC) Continue support of the effort to develop Regulatory commission of Alaska (RCA) regulations to improve the regulation of rural Alaska water and sewer utilities Implement accredited utility manager program using Rural Utility Business Advisor (RUBA) training workshops. The subcommittee funded and led by USDA Rural Development and the Environmental Protection Agency will continue developing strategies for communication among, the service providers, division of labor, and community outreach.”~ Planning Workgroup “Support the practices of good planning at all levels; planning that is locally-driven, promotes cost-effective infrastructure that can be locally maintained, is environmentally sustainable, enhances the growth of a diverse economy, and assists agency responses to their defined need.” * Ibid * Denali Commission web document. Sustainable Utilities Summary 06-26-06 * Ibid * Denali Commission web document. Planning Summary 06-26-06 Denali Commission Program and Policy Review McDowell Group, Inc. + Page 143 “bid * Ibid Statement of Planning Workgroup objectives: » Investigate the feasibility of a program to provide skilled planning facilitation to communities that lack internal capacity to develop and implement plans. * Analyze relationship of need, capability /capacity, and investment of public funds at regional and community levels. = Develop strategies and resources for improved communication on planning issues and requirements between agencies and communities. * Support local and regional land planning efforts that enhance community and economic development by promoting 14(c)(3) land conveyances and other transactions that provide clear title to land.”"! Insurance Workgroup The workgroup has not been active since early 2004. One of the group’s purposes was to investigate insurance options for infrastructure investments in rural communities. Other coordination efforts The various ad hoc coordination efforts, have no formal written goals. Application of Policies Sustainability The Denali Commission MOU addresses sustainability superficially by recognizing that minimizing life-cycle costs is “an essential first step in achieving sustainability.” The Sustainable Utilities Workgroup helped guide the development of a comprehensive report, Sustainable Utilities in Rural Alaska completed by ISER in 2003. The ISER report documents many of the economic realities of energy provision in rural Alaska and, to an extent, explores the implications of those realities. (See discussion of the Energy Program in Section 6.1 for more detail.) Much of the Sustainable Utilities Workgroup’s subsequent work was designed to address the findings of the ISER report.” By the end of 2004, the workgroup reported on its effort to “define ‘sustainability’ in quantified terms, with specific criteria to determine if infrastructure built with grant funds will be sustainable.” The workgroup’s answer was to note, “The Denali Commission has defined ‘sustainability’ on two levels — conceptual (must be able to cover operation, maintenance, renewal and replacement costs) and project specific (business plan balances revenues and expenses) bases.” The workgroup said it planned no further work on the topic.” Like the MOU, the Sustainable Utilities workgroup’s definition does not address the implications for rural Alaska of sustainability as a policy. In promoting planning at a variety of levels, the work of the Planning Workgroup is inherently concerned with sustainability. The group has not made formal pronouncements with respect to the concept or its application, however. * Consolidated Report Work Groups — Denali Commission MOU. November 2004 Denali Commission Program and Policy Review McDowell Group, Inc. + Page 144 Performance Measurement The major work groups have provided written reports on their meetings that include progress on specific tasks adopted by the groups. In November 2004, the Workgroup Implementation Chair, Bill Allen, prepared a brief Consolidated Report, Workgroups — Denali Commission MOU describing the status of each of the four groups. From that report it may be inferred that the workgroups do not assess their performance against measures, nor does there appear to be coordination among the groups toward common goals. At the time of this review, the Planning Workgroup is the only one that is active. It meets once per month. The Sustainable Utilities, Housing & Infrastructure, and Insurance Workgroups have not met in the past 18 months. The last activity noted for the Sustainable Utilities Workgroup was in November 2005.” For the Housing & Infrastructure Workgroup, the last activity was in May 2005." The Insurance Workgroup’s last activity was noted in January 2004."° According to Denali Commission staff, the Commission is seeking new direction and momentum from Workgroup participants and is currently encouraging them to assess their future potential roles.” Findings Coordination Responsibilities Government Coordination does not have specific program goals or a budget allocated to its activities. As a result, it cannot be regarded as a “program.” It might more accurately be described as a clearinghouse for a broad range of coordination activities engaged in by the Commission. However, program staff say the government coordination function is becoming more defined and focused. As part of that effort, the overall goals for Government Coordination need to be translated into actionable objectives. For example, what is the “best practices approach” to governmental coordination referred to above? Another basic question the Commission may want to address is the extent to which it embraces the coordinating role. The Denali Commission Act requires that the Commission “...deliver the services of the Federal Government in the most cost-effective manner practicable by reducing administrative and overhead costs. The legislation doesn’t require the Commission to coordinate other agencies, except to the extent of not duplicating existing funding or services. * Denali Commission web document. Sustainable Utilities Summary 06-26-06 * Denali Commission web document: Housing and Infrastructure Summary.doc, 07-12-06 * Denali Commission web document. Planning Summary 06-26-06 * Per interview with Sharon Guenther Lind, Public Information Officer and Government Coordination Program Manager (May 15, 2007). Denali Commission Program and Policy Review McDowell Group, Inc. + Page 145 General Efforts to Encourage Coordination Although the Commission’s coordinating role is still evolving, the principle of interagency cooperation appears well established. Interviews with rural development practitioners from other agencies produced comments such as the following: * “The Denali Commission enables agencies to access funds quickly for projects that are of great importance, and that we would not otherwise be able to implement. Much of what we have been able to do as a result of Denali Commission funding was not possible before.” * “The Denali Commission exudes openness and a desire to engage a wide variety of agencies to bring other partners on board, and (it) serves as a valuable bridge between the State and Tribal Governments.” * “The Denali Commission has been instrumental in pushing collaboration and a team approach.” * “Co-operation, joint coordination and information sharing between funding agencies has dramatically improved as a result of the Denali Commission.” * “The Denali Commission has put forth a lot of effort to be transparent in recent years, and this transparency has vastly improved over time.” “The Denali Commission is very accepting of new ideas and very innovative.” ® “The Denali Commission has brought many different agencies to the table that would have been difficult to convene otherwise.” “The Denali Commission has been instrumental in pushing collaboration and a team approach.” There is general agreement the Commission aims to perform the following important roles: * Convening multiple agencies to share information, identify common priorities and develop strategies to address them. * Responding to grantee and local needs with more flexibility than most other agencies, including the ability to partner with private foundations. * Identifying and filling gaps not addressed by other programs. Key informants consistently praised the practice of delegating staff to the Denali Commission from other agencies, saying it is an excellent way of promoting collaboration. Key informants also said the fact that the Commission can bring funds to the table has been key to its impact on government service delivery. Grantees particularly appreciate efforts to standardize business and community planning and other document templates across programs and agencies. The Workgroup Approach The Planning Workgroup appears to have made inter-agency conversations more regular and more open to broad participation. The most recent Planning Workgroup meeting (April 19, 2007) was attended by 22 individuals representing 13 government and private entities. Topics included climate change, rural development performance measures, and coastal erosion. The February 2007 meeting was attended by 34 individuals representing 16 entities, many of them different from those who participated in April. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 146 The fact that participants change from meeting to meeting suggests that the workgroups may not really function as “groups” in the sense of having established norms and common interests. The Planning Workgroup is nevertheless evidence of engagement and, to an extent, diverse views. It may be noted, however, that an informal scan of other workgroup minutes from the past 18 months suggests that tribal and local governments are much less likely to be represented at workgroup meetings than federal and state agencies. This is consistent with the fact that the signatories to the Commission’s MOU have typically been federal and state agencies. However, the Commission consistently calls in its literature for inclusion of tribal and local governments. Workgroup attendance suggests that the latter two groups may not be engaging as often as they might. The current “workgroup” approach to coordination has some other disadvantages. After the Denali Commission MOU was signed, it appears there was a conscientious effort to establish the four initial groups and to develop goals and objectives, or at least an agenda, for each of them. However, with one exception, the groups now are largely inactive. Further, the fact that the workgroups do not have linked priorities or expectations suggests a need for more pro-action on the part of the Governmental Coordination Program. Commission staff is working to reengage agency interaction by creating an MOU Partner Workgroup (see 2007 MOU: Workgroup organization chart) which will provide overall direction and goals to the other workgroups. Efficiency The perception among rural development experts is clearly that the Denali Commission has made the realization of government projects in rural Alaska more efficient (and effective). However, if the Commission’s government coordination efforts are intended specifically to address its legislative mandate to deliver services as efficiently as possible, then it would be helpful for the Commission to make an explicit connection between its individual coordination functions and service costs. No baseline has been established for the cost of government service delivery prior to the Commission’s formation. It would be nearly impossible to estimate retroactively what government service costs since 1999 would have been if there had been no Commission. Conceptually, one might identify comparable projects pursued by different agencies — including the Commission — and compare their costs. However, detailed case studies (with access to extensive financial records) would be necessary to draw meaningful conclusions. Ideas for Improving Coordination In addition to the Commission’s current efforts to re-vitalize its Government Coordination program, other improvements might include: Continue to work to standardize Denali Commission procedures, nomenclature, and paperwork across agencies and programs Interviewees said it is important for the Commission to continue efforts to simplify the challenge of obtaining funding for complex rural projects. Many support a level of inter-agency standardization that would allow applicants to use a single set of documentation for all funding agencies involved in a single project. Grantees said they would also benefit to the extent that multiple agencies are able to standardize funding criteria, reporting requirements, and monitoring programs. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 147 Establish some method of assessing coordination improvements Changes in government coordination are not an easy thing to measure. However, the Governmental Coordination Program might, at minimum, produce annual output measures similar to those produced by other Denali Commission programs. How often does the Commission bring agencies together for discussions? What and how many agencies are involved? What projects or policies are discussed? What decisions are made as a result, and what Commission programs are they intended to impact? Answers to these questions would be a useful addition to the Commission’s annual report, particularly if it chooses to treat government coordination as one of its programs. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 148 SECTION 7: BIBLIOGRAPHY Alaska Electric Power Statistics 1960-2001. Institute of Social and Economic Research, University of Alaska Anchorage. November 2003. Alaska Industrial Development and Export Authority Rural Energy Programs. Legislative Audit, Pat Davidson, CPA. July 2001. Alaska Rural Primary Care Facility Needs Assessment, Volume I, I and III. Alaska Native Tribal Health Consortium, Department of Health and Social Services and Indian Health Service. October 2000. Alternative Energy and Energy Efficiency Assistance Plan, July 1, 2005 to June 30, 2007. Alaska Energy Authority. June 2005. Annotated Bibliography of Selected References on Economics and Social Indicators. Northern Economics. June 2004. Performance and Accountability Report, Appalachian Regional Commission, Fiscal Year 2006. Appalachian Regional Commission. November 15, 2006; Parts I and II. ' Business Planning for Rural Alas ka Utilities. Alaska Department of Community and Economic Development, Rural Utilities Business Advisor Program. July 2003. Current Community Conditions: Fuel Prices across Alaska, Fall-Winter 2006 Update. Department of Commerce, Community and Economic Development, Division of Community Advocacy. January 2007. Denali Allied Health Training Project Outcomes. University of Anchorage Alaska Allied Health. June 2006. Denali Commission Annual Reports: 2005, 2006 Denali Commission Annual Workplans: FY2000 through FY2007 Denali Commission Five Year Strategic Plan (2005-2009) and Fiscal Year 2006 Work Plan Denali Commission FY05 Status Report Denali Commission Performance and Accountability Report, Fiscal Year 2005 Distressed Community Criteria 2006 Update, Denali Commission document. June 2006 Denali Training Fund- FY05 Status Report. Division of Business Partnerships, Alaska Department of Labor and Workforce Development. Economic Development Performance Indicators: 3 Briefing Papers. Institute for Social and Economic Research. June 2004. Evaluate, Quantify, and Prioritize the Need for Teacher Housing in Rural Alaska, Summary and Analysis Report. NANA Pacific. August 2004. Literature Review on Economic Growth and Poverty Reduction. Donna J. Goldsmith, Esq. July 2006. Middle Kuskokwim Regional. Energy Project. Alaska Energy Authority / Rural Energy Group. (Prepared for the Denali Commission Infrastructure Subcommittee). August 2004. Statistical Report of the Power Cost Equalization Program, Fiscal Year 2005. Alaska Energy Authority. January 2006. Sustainable Utilities in Rural Alaska, Effective Management, Maintenance and Operation of Electric, Water, Sewer, bulk Fuel, Solid Waste, Final Report. Institute for Social and Economic Research. July 2003. Kohler, Meera. The Challenges of Electricity (and Diesel Fuel) in Rural Alaska. PowerPoint presentation. Alaska Village Electric Cooperative. September 2005. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 149 Training for Jobs, Denali Training Fund 2001 Annual Report. Department of Labor and Workforce Development. 2002. Past Assessments of Denali Commission Programs: Audit Report, Alaska Industrial Development and Export Authority, Rural Energy Programs. Division of Legislative Audit. July 2001. Evaluation of Construction Job Training and Placement in Alaska, A Comparison of Alaska Works Program Participants, Traditional Construction Apprentices, and Non-served Cohorts. FOF Communications. September 2005. Denali Commission Inspector General Reports: ¢ Buckland power plant * Manakotak power plant * Red Devil fuel storage tank ¢ Sterling Landing tank farm ¢ Stony River fuel storage tanks ¢ Takotna fuel storage tanks ¢ Tenakee Springs power plant ¢ Unalakleet tank farm Mini-Grant Program Evaluations, FY 2003 & FY 2004. Holly Johanknecht, Denali Commission /DCED Intern. August 2004. Mini-Grant Program: Community Impact and Program Evaluation. Department of Commerce, Community and Economic Development, Division of Community Advocacy, May 2006 Monitoring Plan and Recommendations. Aurora Consulting (Twenty reports available in the Denali Commission database under Alaska Energy Authority grant 380327. 10 filed as of 8/05/05; 2 as of 12/08/05; 2 as of 10/30/06; and 6 as of 1/08/07.) Program Assessment Rating Tool (PART) Evaluation of the Denali Commission. US General Accounting Office. 2005. The Foraker Group Rural Technical Assistance Pilot Project Evaluation. Sheila Selkregg & Associates. August 2004. SFY02 Outcomes, State-Federal Mini-Grant Program. Tessa DeLong, Denali Commission Graduate Intern Denali Commission Program and Policy Review McDowell Group, Inc. + Page 150 APPENDICES Appendix 1 — List of Interviews Appendix 2 — Site Visit Reports Appendix 3 — Scope of Work Denali Commission Program and Policy Review McDowell Group, Inc. * Page 151 Appendices APPENDIX 1: EXECUTIVE INTERVIEWS I. Executive Interview Key Informants Denali Commission Staff (former and present) George Cannelos, Federal Co-Chair Krag Johnsen, Chief Operating Officer Tessa Rinner, Director of Programs Denali Daniels, Health Program Manager Kathy Prentki, Energy Program Manager Mike McKinnon, Transportation Program Manager Sharon Lind, Government Coordination Program Manager Paul McIntosh, Economic Development Program Manager Gene Kane, Solid Waste Program Manager Cindy Roberts, Former Solid Waste Program Manager Michelle O'Leary, Former Program Manager Nelson Angapak, Alaska Federation of Natives /CEO Representative Dick Cattanach, Commissioner Cheryl Frasca, Former Commissioner Gary Brooks, Former Commissioner Mark Hamilton, Former Commissioner Kathie Wasserman, Commissioner Jeffrey Staser, Former Federal Co-Chair Fran Ulmer, Former State Co-Chair Henry Springer, Former Commissioner Kevin Ritchie, Former Commissioner Al Ewing, former staff Joel Neimeyer, former staff Sam Kito III, former staff Michelle Anderson, former staff Other Interviews Bill Hogan, Deputy Commissioner, Department of Health and Social Services Mary Anaruk, Student Success Facilitator, Alaska Center fro Rural Health Jeff Jessee, Executive Director, Alaska Mental Health Trust Authority Pat Carr, Health Program Manager, Primary Care Office, Department of Health and Social Services Marilyn Kasmar, Executive Director, Alaska Primary Care Association Suzanne Neimi, Project Manager, Norton Sound Health Corporation Ken Brewer, President/CEO, Southeast Alaska Regional Health Consortium (SEARHC) Steve Weaver, Senior Director, Division of Environmental Health and Engineering, Alaska Native Tribal Health Consortium (ANTHC) Denali Commission Program and Policy Review McDowell Group, Inc. + Page 1 APPENDIX 1 Paul Morrison, Manager, Health Facilities Engineering, ANTHC Simon Mawson, Project Coordinator, Health Facilities Engineering, ANTHC Rose Heyano, Director of Community Health Services, Bristol Bay Area Health Corporation John Muir, Project Manager for Health Services, Arctic Slope Native Association James Sears, Special Assistant, Southcentral Foundation James Wiedle, Planner I, Alaska Housing Finance Corporation Mike Andrews, Executive Director, Alaska Works Debbora Allen, Chief Operations Officer, Alaska Works Vicki Schneibel, Training Director, Associated General Contractors of Alaska Joe Cladouhos, Special Projects Director, Allied Health Workforce Development, UAA Allied Health Athena Logan, Program Manager, Department of Commerce, Community and Economic Development (DCCED) Judy Haymaker, Grants Administrator, DCCED Jo Grove, Grant Manager for the Division of Community Advocacy, DCCED Marcia Brand, Associate Administrator, Office of Rural Health Policy, U.S. Department of Health and Human Services Karen Larsen, USDA-RUS Chuck Kleeschulte, Aide to Senator Lisa Murkowski Sheila Selkregg, former director USD. Rural Development, Alaska Bill Allen, DCCED, former director UsDA Rural Development, Alaska John Katz, Office of the Governor of Alaska, Washington DC. Dennis McMillian, Foreaker Group Ann Campbell, Aurora Consulting Chris Mello, Alaska Energy Authority Mike Harper, Alaska Energy Authority Meera Kohler, Alaska Village Electric Cooperative Brent Petrie, Alaska Village Electric Cooperative Myron Nenang, Association of Village Council Presidents Robert Herron, Alaska Congressional Delegation, Bethel Wanetta Ayers, former Director, Southwest Alaska Municipal Conference (GSWAMC) Il. Site Visit Interviews (See individual site visit reports, Appendix 2) Denali Commission Program and Policy Review McDowell Group, Inc. + Page 2 APPENDIX 1 Denali Commission Program and Policy Review McDowell Group, Inc. + Page 1 APPENDIX 2 The Site Visit sections in this report present a combination of information from community-based interviews, on-site observations, and publicly available documents. It is important to note that interviews represent the opinions and perceptions of individuals and may or may not be factual. Unless specifically identified as such, information in the Site Visit sections may not represent the position of the Denali Commission. Site Visit to Craig/Klawock, Prince of Wales Island, Southeast Alaska January 17 - 18, 2007 McDowell Group Field Staff Bob Koenitzer, McDowell Group Survey Manager and Analyst Jim Calvin, McDowell Group Partner Key Informants Jon Bolling, Administrator, City of Craig Greg Mickelson, Manager Power Operations, Alaska Power & Telephone (AP&T) Tom Briggs, General Manager, Inter-Island Ferry Authority (and former Craig City Administrator) Dr. McGrath, Craig Clinic, City of Craig Dennis Watson, Mayor, City of Craig Bill Altland, Pharmacist and Proprietor, Whale Tail Pharmacy, Craig Cindy Gamble, Administrator, Alicia Roberts Clinic Don Marvin, Mayor, City of Klawock and Acting Administrator Community Overview The communities of Craig and Klawock are located on the west side of Prince of Wales Island, in southern Southeast Alaska. Craig and Klawock are connected by the 7-mile Craig/Klawock Highway. Ketchikan is the regional hub through which the island is served. Both Craig and Klawock are 1“ Class Cities. They are classified as “non-distressed.” However, the Craig /Klawock area serves as the on-island service and supply hub, including the distressed communities of Hydaburg, Kasaan, and Thorne Bay. The population of Craig has been declining, falling steadily from 1,725 in 2000 to 1,417 in 2005. Klawock’s population has been somewhat more stable, but at 780 residents is also below the 2000 level of 854 residents. Craig’s population is predominantly White (67 percent) while approximately half of Klawock’s population is Alaska Native (51 percent). Per capita income in Craig was $20,176, while Klawock’s was $14,621, as of the 2000 Census. The statewide average was $22,660. Funding Summary The Denali Commission project database shows that as of the end of 2006, the Craig /Klawock area has received a total of $9.8 million in Denali Commission funding for 15 projects. Projects supported by the Commission received total funding of $15.8 million, including funding from other sources. Commission- supported projects include five Health Program projects, three Energy Program projects and a variety of others. Projects are described and evaluated by major project area, below. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 2 APPENDIX 2 Health Program Projects Overview Denali Commission Health Program grants to the Craig /Klawock area have totaled $2.4 million, with approximately $2 million of that spent to date. Projects supported by the Commission received total funding of $3.9 million, including funding from other sources. The largest project funded by the Commission was the Alicia Roberts Medical Center, a $3.2 million project, including $1.86 million from Denali Commission. Details on this and other Health Program projects are provided below. Project Title: Conceptual Planning - Community Needs Assessment (POW Island) Project ID: 0065-DC-2002-118 (Start date Sept. 2002, closeout Nov. 2005) Program: Health Communities: Klawock Recipient Org.: Klawock, City of Funding Sources/ Partners: Denali Commission Funding: $100,000 City of Thorne Bay: $1,000 Community of Coffman Cove: $100 Total Project Funding: $101,100 Status: Close-out Complete Project Overview: This project was administered by the City of Klawock on behalf of the Prince of Wales Health Advisory Committee. Project included conceptual planning with an emphasis on a community needs assessment to address primary care needs for Prince of Wales Island. Project Title: Alicia Roberts Medical Center, Prince of Wales Island Project ID: 0053-DC-2002-I6 (Start date April 2002, closeout Aug. 2005 (construction began late 2003)) Program: Health Communities: Klawock Recipient Org.: SEARHC Funding Sources/ Partners: Denali Commission Funding: $1,857,386 Indian Health Service: $81,301 Southeast Alaska Regional Health Consort: $448,926 Southeast Alaska Regional Health Consort: $839,386 Total Project Funding: $3,226,999 Status: Close-out Complete Project Overview: The project included renovation and expansion of the primary care clinic facility in Klawock, including behavioral health space, emergency services space, pharmaceutical space, expanding and equipping existing dental space, and new physical therapy space and equipment. Project Title: Clinic Renovation Project ID: ANO2-G60 Program: Health Communities: Craig Recipient Org.: ANTHC Funding Sources/Partners: Denali Commission Funding: $11,784 Total Project Funding: $11,784 Status: Close-out Complete Project Overview: The scope of work for this project was the replacement of the exterior vinyl siding on the Craig Health Clinic. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 3 APPENDIX 2 Project Title: Clinic Renovation Design Project ID: ANO4-GC1 (Dec. 2004 agreement date) Program: Health Communities: Craig Recipient Org.: ANTHC Funding Sources/ Partners: Denali Commission Funding: $75,014 Total Project Funding: $75,014 (nothing expended to date) Status: Planning/Design Project Overview: Complete design studies and construction planning to repair, renovate and expand an existing health clinic in the City of Craig. Project Title: Design Management Project ID: ANO6-GFO (Nov. 2006 agreement date) Program: Health Communities: Craig Recipient Org.: ANTHC Funding Sources/Partners: Denali Commission Funding: $480,000 Total Project Funding: $480,000 (nothing expended to date) Status: Planning/Design Pending Project Overview: The project is for completion of design studies and construction planning for a new clinic in Craig. Health Program Projects Evaluation The first Denali Commission Health Program grants were two generally concurrent projects, including planning and construction related to the expansion of Alicia Roberts Medical Center in Klawock (ARMC) and a conceptual planning project aimed at creation of a centralized, single-campus, regional healthcare facility located in the Craig / Klawock area. The conceptual plan was prepared by Prochaska & Associates for the Prince of Wales Island Health Advisory Committee (POWHAC) with a $100,000 Denali Commission grant. The planning effort concluded that the ARMC was the logical location for a single-campus facility. The need for a centralized healthcare facility in the POW area was rooted in the basic challenges facing healthcare providers in rural settings. Klawock was (and is) served by ARMC, which is operated by Southeast Alaska Regional Health Consortium (SEARHC). Craig was (and is) served by the Craig Clinic, a facility that was operated privately until financial problems forced the City of Craig to assume control of the facility in 2001. One of the challenges facing previous operators of the Craig Clinic was the cost of providing emergency care services to patients who often could not pay for those services. Beginning in 2001, ARMC agreed to take all ambulance and after-hours emergency calls, though the center itself was not staffed, equipped or designed to handle the resulting increase in service demand. Since shedding itself of emergency care responsibilities, the Craig Clinic has been operating “in the black,” but is understaffed according to local sources. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 4 APPENDIX 2 Just as the POWHAC conceptual plan for a single campus was being completed, Denali Commission-funded construction work was beginning on the expansion of ARMC to provide upgraded emergency care facilities as well as behavioral health space, pharmaceutical space, expanded dental space and equipment, and new physical therapy space and equipment. The project was also funded by the IHS and SEARHC. At around the time work began on expanding ARMC, movement toward development of a single campus, in accordance with the POWHAC conceptual plan, ceased (apparently POWHAC and SEARHC were unable to agree on how such a campus would be managed). Planning instead shifted to development of a “mini- campus” in Craig that would house the Craig Clinic as well as several other health and social service providers. To support this process, Denali Commission awarded a $75,000 grant to complete design studies and construction planning for repair, renovation and expansion of the existing clinic (ANTHC is the program partner). That grant funding has since been rolled into a $480,000 grant for design studies and construction planning for a new facility in Craig (the existing facility was deemed physically obsolete and not suitable for renovation). That planning process is scheduled for completion by December 2007. Construction of the Craig campus is expected to cost $6 million. Local informants say the overlap between ARMC expansion and single-campus planning was stressful and may have been a poor use of resources. It is unclear if the planning work conducted through the POWHAC on a unified healthcare campus has any lasting value. At the time of the site visit, it was not apparent how development of two facilities in close proximity would evolve. Commission staff report that discussions continue in an attempt to reconcile the two approaches. Energy Projects Overview At the end of 2006, Denali Commission Energy Program grants to the Craig /Klawock area totaled $4.4 million, with approximately $4.1 million of that spent to date. Projects supported by the Commission received total funding of $5.7 million, including funding from other sources. The largest project funded by the Commission was the South Fork hydroelectric project, a $4 million project, including $3.5 million form Denali Commission. Details on this and other Energy Program projects are provided below. Project Title: Hydro Electric (ECR) Project ID: 407003 Program: Energy Communities: Island-Wide Recipient Org.: AEA Funding Sources/Partners: Denali Commission Funding: $3,539,062 Alaska Power Company $430,880 Total Project Funding: $3,969,942 Status: Close-out Complete Project Overview: Design and construction of 2MW run-of-river hydroelectric facility on South Fork of Black Bear River which now augments the existing hydroelectric facility on Black Bear Lake. This additional generation capacity reduced the use of diesel fuel for power generation. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 5 APPENDIX 2 Project Title: Mergers and consolidations Project ID: 0073-DC-2002-126 Program: Energy Communities: Kasaan, Klawock, Thorne Bay Recipient Org.: AP&T Funding Sources/ Partners: Denali Commission Funding: $600,000 Alaska Power Company: $27,702 Total Project Funding: $627,702 Status: Project close-out complete Project Overview: This project upgraded existing distribution system components in Klawock, Kasaan, and Thorne Bay to bring them into compliance with National Electrical Safety Code (improving public safety) and increase the operating life of the utilities. Project Title: Wood-fired Boiler, Partial Construction Project ID: 402012 Program: Energy Communities: Craig Recipient Org.: AEA Funding Sources/ Partners: Denali Commission: $300,000 Alaska Energy Authority: $300,000 Local Match: $233,000 USDA Natural Resources Conservation Service: $50,000 U.S. Forest Service: $217,000 Total Project Funding: $1,100,000 Status: In-Progress Pending (9% of funding expended) Project Overview: Construction related to the installation of a wood-fired boiler to reduce heating costs by providing supplemental heat at three city-owned buildings in Craig, the Craig Aquatic Center and the Craig Elementary and Middle schools. Energy Projects Evaluation Denali Commission has funded a variety of energy related projects in the Craig /Klawock area. The largest was the design and construction of 2MW run-of- river hydroelectric facility on South Fork of Black Bear River. The project had a total cost of $4 million, including $3.5 million from the Denali Commission. Alaska Energy Authority was the program partner and Alaska Power & Telephone was the operator and construction contractor. Prior to construction of the South Fork facility, Black Bear River generating capacity was insufficient to meet peak demand, requiring costly supplemental diesel power generation in order to prevent draw down of Black Bear Lake water levels. The Black Bear FERC license requires a release of 9 cfs. During high-power demand, low rainfall periods, this requirement forced AP&T to generate diesel power to supplement the hydroelectric generation. A significant indirect benefit of this project has been reduced power costs in Hydaburg. Completion of a 31-mile transmission line linking Hollis and Hydaburg, coupled with the power supply stability made possible by the South Fork project, has lead to a dramatic reduction in diesel usage in Hydaburg. Prior to completion of the transmission line, Hydaburg would burn 130,000 gallons of diesel annually to generate power. In 2006, the community burned approximately 2,000 gallons. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 6 APPENDIX 2 The so-called “mergers and consolidations” project was a $628,000 system upgrade project that included $600,000 in Denali Commission funding. Project included pole replacement, replacement of non-compliant parts of the URD system, removing abandoned TV cable, replacing substation transformers, correcting NESC violations, etc. A project now under construction is a wood-fired boiler to provide supplemental heat at three city-owned buildings in Craig, the Craig Aquatic Center and the Craig Elementary and Middle schools. This project germinated with the City of Craig. The City Manager (Jon Bolling) has been the primary facilitator of this project. The USDA Forest Service has provided technical assistance (in addition to funding support) on the project. Project costs will total $1.6 million. The project is expected to save the City of Craig $40,000 to $90,000 annually depending fuel costs. The project could serve as model for similar facilities elsewhere in Southeast. Other Projects Overview Among the numerous other Denali Commission-funded projects in the Craig and Klawock area, three stand out in terms of their importance or potential importance to these communities. The “Demonstration Solid Waste Project” was a project intended to correct a number of health and environmental problems associated with the operation of an un-permitted, inadequate landfill. With grant money, the community constructed a transfer facility for municipal solid waste and closed its landfill to raw garbage. Klawock’s Elder Supportive Housing Repair and Renovation project includes a significant expansion of an existing facility. Now under construction, the expanded facility will make it possible for more senior citizens to remain in their home community. The Klawock Senior Center is managed under the Tlingit Haida Regional Housing Authority’s Elderly Low Income Rental Program. Project Title: Demonstration Solid Waste Project Project ID: 0040-DC-2001-I21 Program: Other Infrastructure Communities: Klawock Recipient Org.: Klawock, City of Funding Sources/Partners: Denali Commission Funding: $728,900 Local Match: $18,000 SOA Dept of Environmental Conservation: $135,000 Total Project Funding: $881,900 Status: Project is complete Project Overview: Included preparation of bid package, issuance of RFPs and award of contracts for site preparation, construction project management and commissioning of a solid waste transfer station demonstration project for the City of Klawock. | “Klawock Assessment, Transfer Facility Demonstration Project” Alaska Department of Environmental Conservation, February 2004. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 7 APPENDIX 2 Project Title: Elder Supportive Housing Repair & Renovation Project ID: 197-05-J Program: Elder Housing Communities: Klawock Recipient Org.: AHFC Funding Sources/Partners: Denali Commission Funding: $1,800,000 Other Funding: $2,888,000 Total Project Funding: $4,688,000 Status: Construction Project Overview: Rehabilitation of existing Senior Center in Klawock, including addition of up to eight senior housing units and expansion of dining area/facilities. Project Title: Water Source Engineering Planning & Prelim. Design Project ID: 0002-DC-1999-E1 Program: Other Infrastructure Communities: Klawock Recipient Org.: Klawock, City of Funding Sources/Partners: Denali Commission Funding: $230,750 City of Klawock: $25,000 Total Project Funding: $255,750 Status: Close-out Complete Project Overview: Engineering planning and preliminary design of a new community water source at 3.5 Mile Creek, including water intake structure at Three-Mile Creek and transmission piping to the existing water treatment plant. Project Title: IAID Tlingit Haida Regional Housing Authority (AIDA - Initiative for Accelerated Infrastructure Development) Project ID: 850118 Program: Other Infrastructure Communities: Craig, Hydaburg (and seven other Southeast communities) Recipient Org.: DCCED Funding Sources/Partners: Denali Commission Funding: $74,565 Local Match: $149,128 SOA Department of Transportation: $37,282 U.S. Department of Agriculture: $37,282 Total Project Funding: $298,257 Status: Close-out Project Overview: Project included preparation of community profile maps for the following communities: Angoon, Craig, Hoonah, Hydaburg, Kasaan, Klawock, Kake, Kiukwan, Saxman, Skagway, and Yakutat. The project is complete and maps have been distributed. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 8 APPENDIX 2 Project Title: Safety Equipment Upgrade for IFA Ferry Project ID: 850320 Program: Economic Development Communities: Craig Recipient Org.: IFA Funding Sources/ Partners: Denali Commission Funding: $20,000 Total Project Funding: $20,000 Status: Close-out Complete Project Overview: The purpose of this grant was to purchase advance safety equipment for the M/V Prince of Wales ferry. This safety equipment supports the advance fire safety training that the crew received through the Denali Commission. Project Title: IFA Equipment Training Project ID: EN 734128 Program: Training Communities: Craig Recipient Org.: DOLWD Funding Sources/ Partners: Denali Commission Funding: $19,711 Inter Island Ferry Authority: $6,480 Total Project Funding: $26,191 Status: Close-out Complete Project Overview: Four participants were to be trained on 3500 B series CAT engines and power generator systems that are on board the M/V Prince of Wales. Project Title: Klawock Heavy Equipment Operator Training Project ID: EN 715364 Program: Training Communities: Klawock Recipient Org.: DOLWD Funding Sources/Partners: Denali Commission Funding: $22,807 City of Klawock: $14,400 Total Project Funding: $37,207 Status: Close-out Complete Project Overview: Water & Waste Water Operators, Heavy Equipment Operator and Project Manager/Supervisor Training Consistency with Denali Commission Policies Sustainability: Health Program: There are a number of different informant perspectives on the sustainability of Denali Commission’s health care program projects on POW. From one perspective, operation of the expanded ARMC, while providing much-needed emergency medical services to POW residents, requires greater on-going federal government support for non-emergency services (such as dental and pharmaceutical services), than prior to clinic expansion. This increased need for government support is viewed, from a macro perspective, as contrary to the policy of sustainability. Further, expansion of ARMC included facilities for pharmacy and dental services, which are not currently staffed, and therefore to date have not proven sustainable in terms of service. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 9 APPENDIX 2 Alternatively, reliance on private sector or local taxpayer support for health care services has proven difficult and sometimes unsustainable in many small communities. As such, it is claimed, the only path to sustainability of services is through greater government support. Greater sustainability in health care services through consistent government support is one component in overall community sustainability. Sustainability is also achieved by partnering with larger regional organizations that have resources to sustain operations. Informants suggested that a better approach, in terms of sustainability, would have been the single-campus concept, blending federal and state government support and local support for a facility that housed both for-profit and non-profit health care providers. Energy Program: High power costs are one of the fundamental challenges to economic development and sustainability in rural Alaska, including Prince of Wales Island. The largest private employer in the Craig /Klawock area, the Viking Lumber Mill, is a major consumer of electric power. Projects that help control power costs will, therefore, contribute direct or indirectly to economic sustainability. The largest Denali Commission-funded energy project, the South Fork hydro project, is sustainable from an operational perspective because maintenance is funded through user fees with necessary expertise provided by a stable, well-established private utility, AP&T. The wood-fired boiler project is an interesting one in that it could serve as a model for other communities looking to reduce power costs. Further, such boilers serve as a market for the significant volume of wood product waste produced in the region. Private Enterprise: Denali Commission’s grant for expansion of ARMC (which included pharmaceutical and dental space and equipment) is viewed by some as contrary to the Commission’s Private Enterprise policy. Craig has private for-profit pharmacy and dental providers, which perceive themselves in competition with SEARHC. Craig also has the City-owned clinic, which is in some respects also in a competitive position with respect to ARMC. Documentation provided by one informant included correspondence between a local dentist and the Commission and a local pharmacist and the Commission expressing opposition to the funding on dental and pharmacy facilities at ARMC. This clearly contentious issue also included correspondence with state and federal-level elected officials, letters of concern from private providers from around Southeast Alaska, a second review of the ARMC grant award by the chair of the Health Facilities Steering Committee and a final determination by the federal co-chair of the Denali Commission. The issue of competition between regional health care providers, such as SEARHC, and local non-profit and for-profit providers is complex and statewide in scope. Understanding and presenting all the facts surrounding this issue is outside the scope of this study. With regard to the Denali Commission, the opinion expressed by several key informants was that regional providers have an “inside track” with the Commission, sometimes at the expense of local providers. It was noted by one informant that neither private providers nor rural providers are represented on the Denali Commission’s Health Care Steering Committee. The Denali Commission's Private Enterprise policy regarding health care is carefully worded to capture to challenges surrounding investment in rural Alaska. The Policy states “The Denali Commission seeks to support health care facilities in a manner which improves access to quality, affordable health services, be it a private entity or a publicly funded one. The Denali Commission does not seek to create or enhance competition in an inefficient market.” The Policy goes on to state “Given the Denali Commission Program and Policy Review McDowell Group, Inc. + Page 10 APPENDIX 2 economic fragility of rural health care systems, Denali Commission funding for health care facilities will be deployed in a manner which encourages a cooperative and collaborative arrangement for the health benefit of the community in question, and improves the sustainability of the overall care delivery system for the population.” The obvious and unanswered questions surrounding this complex issue include, what sort of mutually beneficial relations (between private providers and SEARHC) were considered, what obstacles prevented such relationships from developing, and what role could (or should) the Commission have played in facilitating the formation of such relationships. Available documentation suggests that the regional health care provider did have precedence for contracting with private pharmaceutical providers. The major energy projects funded by Denali Commission include a private sector partner, AP&T. AP&T is the only for-profit power provider in the area. Therefore, there are no private enterprise policy conflicts. Cost Containment: Some cost inefficiencies were suggested related to the timing of the conceptual planning and ARMC expansion projects, which were conducted approximately concurrently. It is unclear if the planning work conducted through the POWHAC on a unified health care campus has any lasting value. Craig is now pursuing its own “mini-campus.” Much of this issue may have been outside the control of the Denali Commission, though it was suggested that the Commission could have taken a stronger leadership role in working toward the single campus concept. Based on available documentation, Health Care projects completed in the Craig/Klawock area have been completed within the planned budget. No construction cost over-runs were noted or evident in the Energy Program project documentation. Open Door: Emergency room and other services offered by ARMC are available to all residents of POW, consistent with Denali Commission’s Open Door Policy. Key Site Visit Observations * Overall, there is strong support for the Denali Commission and its programs. * There is the local perception that Denali Commission is flexible and can provide support that would otherwise not be available. * Regarding health care, it is universally agreed that POW Island residents are better off as a result of Denali Commission investment. ¢ All of the projects funded by Denali Commission were or are local priorities (none were imposed on the communities) * There is some dissatisfaction with past processes and indirect outcomes of health care projects. Apparent conflicts between regional providers and representatives of Craig's health care sector lead to some planning and funding inefficiencies. * Perceived competition between health care providers in Craig and the Denali Commission-supported Alicia Roberts Medical Center remains an issue with some people in Craig. Because of this competition, and because of the greater federal government support required to operate ARMC, some informants believe the Denali Commission funding for expansion of the clinic was contrary to the Commission's sustainability and private enterprise policies. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 11 APPENDIX 2 Selected Informant Comments “Denali could have done more in assisting Craig and Klawock in working together” {on the single health campus concept] “[Denali Commission is a] good “culling” organization for grants.” “Business planning aspect of the project was difficult, requiring three submissions to the Technical Advisory Committee.” “On the Craig mini-campus, Denali has been open in working with four groups in Craig, they thought outside the box.” “New Craig clinic is needed to attract new physicians.” “Health services [on POW] are getting better for the client as a result of DC investment.” “As a follow-up, Denali should look at the economics of ARMC. Is it sustainable? It would not be without major government support.” “The distressed community concept is difficult for Craig and Klawock because they don’t qualify, yet they serve residents from distressed communities.” “We hope the Commission keeps getting funding. However, there is a need for regional offices, with stronger regional advocates, especially economic development advocates.” “No question, the Denali Commission is playing a key role in rural development.” “Cheaper power may spur business growth and employment on the island.” “The Denali Commission is very flexible.” Concerning the new Craig Clinic “I don’t know who else we could go to for funding.” “A larger [clinic] facility, more staff and a better ability to respond has saved lives.” “Tnitial Denali Commission funding was the catalyst for many other things like extended care, medivacs, dental and pharmacy services.” “They [the Commission] were able to think outside the box and approved our application, we are thankful for that.” “The Denali Commission has a critical role in rural Alaska. But they do need more regional outreach.” Denali Commission Program and Policy Review McDowell Group, Inc. + Page 12 APPENDIX 2 Site Visit to Nome and Golovin, Northwest Alaska February 5 — 9, 2007 McDowell Group Field Staff Susan Bell, McDowell Group Partner Ashleigh Arledge, McDowell Group Research Analyst Key Informants Nome Denise Michels, Mayor, City of Nome and Training Program Manager, Kawerak, Inc. Randolph Romenesko, City Manager, City of Nome Leo Rasmussen, Area Director, USDA Rural Development Josie Hardy Bahnke, Local Government Specialist, Alaska State Department of Community, Commerce, and Economic Development Loretta Bullard, President, Kawerak Inc. Sean McKnight, Transportation Program Director, Kawerak Inc. Helen Pootoogooluk, COO, Norton Sound Health Corporation John Handeland, General Manager /COO, Nome Joint Utility System Golovin Agnes Moses, Mayor, City of Golovin Joanne Katchatag, City Clerk, City of Golovin Kathy Punguk, Water and Sewer Administrator, City of Golovin Dean Peterson, Vice President, Golovin Native Corporation Irene Sockpealek, Vice President, Golovin Native Corporation Toby Anungazuk, Grant Writer, Chinik Eskimo Community Kathy Fagerstrom, Grant Writer, Chinik Eskimo Community Larry Fagerstrom, Sr., Operator, Golovin Power Plant Ruth Peterson, Health Aide, Golovin Clinic Thomas Nayokpuk, Health Aide, Golovin Clinic Rita Buck, Regional Clinic Supervisor, Golovin Clinic Community Overview Nome is located on the south coast of the Seward Peninsula in Northwest Alaska. There is a regional road system, connecting Nome to villages in the Bering Strait Region. Serving as a regional hub for surrounding villages, Nome is the supply, service, and transportation center of the Bering Strait region. There are a number of regional representatives for state and federal government. Additionally, Nome is the base for the regional for-profit Native corporation (Bering Strait Native Corporation) and non-profit economic development and social services corporation (Kawerak, Inc.). Nome has had a consistent population of roughly 3,500 for the past two decades, with a 2006 population of 3,540. Just over half (59 percent) of its population is Alaska Native. The per capita income is $23,402, with roughly one-third of the labor force employed directly by local, state, or federal government. Nome is classified as a First Class City and is listed as “non-distressed” by the Denali Commission. It is not located in an organized borough. Denali Commission Program and Policy Review McDowell Group, Inc. « Page 13 APPENDIX 2 Golovin is located 70 miles east of Nome, on a point of land between Golovin Bay and Golovin Lagoon. It is accessible by road and port during the summer months, but only by small plane year round. Golovin is an Inupiat Eskimo village with a fishing, herding, and subsistence lifestyle. The sale or importation of alcohol is banned in the village. Golovin has a 2006 population of 154, of which over 92 percent is Alaska Native. The per capita income is $13,261 with two-thirds of the labor force working directly in government. Golovin is classified as a second class city and listed as “non- distressed” by the Denali Commission. It is not located in an organized borough. Funding Summary The communities of Nome and Golovin have received a total of $26.4 million in Denali Commission funding, including $20.7 million for Nome and $5.7 million for Golovin. This funding supported a total of 19 projects, including nine in Nome and ten in Golovin. Funds secured from other sources totaled $7.6 million ($6.2 million for Nome projects, $1.4 million for Golovin projects). Commission-supported projects include four Health Care Program projects ($12 million in Commission funding), five Energy Program projects ($11 million in Commission funding), and a variety of others. Projects are described and evaluated by major project area, below. Nome Health Program Projects Overview Denali Commission Health Program grants to Nome totaled over $11.2 million, with approximately $3 million of that spent to date. Projects supported by the Commission received total funding of more than $11.3 million, including funding from other sources. The largest project funded by the Commission was the Nome Replacement Hospital design. Details for these projects are provided below. Project Title: Hospital Design Project ID: 0103-DC-2003-116 (Award performance period Sept. 2003 - Aug. 2008) Program: Health Care Communities: Nome (and surrounding villages) Recipient Org.: Norton Sound Health Corporation Funding Sources/Partners: Denali Commission Funding: $11,180,000 (29% used) Indian Health Service: $120,000 (100% used) Total Project Funding: $11,300,000 Status: Planning/Design Complete Project Overview: The project included planning and design for the Nome Replacement Hospital. Funds were used to identify appropriate hospital programmatic space requirements, layout and configuration of the building, permitting and environmental clearance, and site layout/construction development concerns. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 14 APPENDIX 2 Project Title: Assisted Living Assessment Project ID: 06-4-C-5026 (Start date April 2005, closeout March 2006) Program: Health Care Communities: Nome Recipient Org.: Alaska Department of Health and Social Services Funding Sources/ Partners: Denali Commission Funding: $44,000 (100% used) Total Project Funding: $44,000 Status: Close-out Complete Project Overview: The scope of work for this project was to assess the need for and feasibility of building/operating an assisted living center. Nome Health Program Projects Evaluation Nome serves as a regional hub for approximately 15 surrounding villages and 9,300 people. The Nome hospital is the last point of “local” medical service, after which residents must fly to Anchorage for higher levels of health care. The Nome hospital is owned and operated by Norton South Health Corporation (NSHC). Residents report that the current facility is fairly old, has some out-of-date technology and equipment, and has experienced difficulty attracting and keeping doctors and medical staff. The Denali Commission awarded NSHC an $11 million grant for planning and design of a new hospital facility. The expectations of the new facility are more space, improved technology and equipment, and physical connection or proximity to a newly constructed hostel. NSHC hopes that these improvements will enhance Nome’s ability to attract medical professionals. The Nome hospital design project objectives were achieved. The planning and design phase was completed well under budget and construction will begin in a couple years. The Denali Commission does not intend to fund the construction phase of the project. Kawerak is already working to identify training opportunities for potential hospital operation and maintenance staff. It is difficult to assess the impacts of the facility plan at this point. Many residents are excited about the new hospital and the anticipated benefit of remaining within their community or region for medical care. Construction of the hospital will provide extensive employment opportunities. There is some community concern as to whether the new hospital will be “overbuilt” for the size and needs of the regional community, as well as their ability to financially support it, raising sustainability issues. Another concern is the lack of access to the hospital for doctors and medical staff who are not part of NSHC, which could conflict with the Denali Commission’s open door policy. Golovin Health Program Projects Overview The Denali Commission awarded two Health Program grants for the design and construction of a new clinic in Golovin. The grants totaled $1.2 million and were complemented by a $400,000 contribution from Norton Sound Health Corporation for the clinic construction. All of the funds have been used. Detail on these two projects is provided below. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 15 APPENDIX 2 Project Title: Health Clinic Design Project ID: ANO3-G68 (Start date June 2003, completed Dec. 2003, closeout Jan. 2006) Program: Health Care Communities: Golovin Recipient Org.: Alaska Native Tribal Health Consortium Funding Sources/Partners: Denali Commission Funding: $58,339 (100% used) Total Project Funding: $58,339 Status: Close-out Complete Project Overview: Complete design of community health clinic (mid-size structure). Project Title: Health Clinic Construction Project ID: ANO3-G77 (Start date Nov. 2004, completed Dec. 2005, closeout Jan. 2006) Program: Health Care Communities: Golovin Recipient Org.: Alaska Native Tribal Health Consortium Funding Sources/Partners: Denali Commission Funding: $1,091,818 (100% used) Norton Sound Health Corporation: $403,099 (100% used) Total Project Funding: $1,494,917 Status: Close-out Complete Project Overview: The project built a mid-sized (2,500 SF) village health clinic for Golovin residents. Golovin Health Program Projects Evaluation Golovin’s old clinic was very small, provided little to no privacy for patients, and had poor technology and equipment. The structure was dilapidated, requiring a new clinic facility rather than an upgrade. With a $58,000 grant from the Denali Commission for planning and design, another Commission grant just over $1 million, plus a $400,000 match from NSHC, NSHC constructed of a new health clinic in Golovin. The new clinic was built using NSHC’s three-sized clinic models (small, medium, and large), which it had developed for new clinic construction in other villages in the region. NSHC developed three clinic prototypes and construction methods, and secured funding from the Denali Commission used for new clinics in villages throughout their region. They also used Denali Commission funding to provide training to local communities in their region on how to apply for future Commission grants and felt that is was a very successful program. The new clinic is a medium sized facility (2500 sq. ft.), centrally located in Golovin, and has more room, including space for more exam rooms, new dental and behavior health services, and a morgue. The new clinic provides much better technology, including equipment allowing health aides to electronically send x-rays and photographs, and to video- conference with off-site doctors and specialists. The new technology enables more patients to be treated on-site rather than having to travel to Nome or Anchorage. Residents believe the new facility has helped with staff retention and the current health aides felt optimistic about attracting a physician's assistant with the improved facility. The Commission’s posted performance indicators only account for the project’s adherence to schedule and budget. They do not address how well the project met the health needs of the community or whether or not the size and scope of the project was appropriate for the community. Residents believe the project meets the needs of the community very well, although local staff noted a few specific negative aspects. The new clinic is located in the center of town, which offers easy access to water and Denali Commission Program and Policy Review McDowell Group, Inc. + Page 16 APPENDIX 2 sewer. Access from the street into the clinic is via a steep ramp, which makes access for wheelchairs or stretchers challenging. Residents noted that the central location limits privacy for those seeking care. Numerous residents expressed concern about the clinic’s proximity to the flood zone. The new clinic is currently owned by NSHC, but its future ownership is uncertain. Residents are concerned about financial sustainability after a transfer of ownership. Clinic operation and maintenance is costly; the facility will likely not survive without continued outside support. Several residents felt that local ownership of the clinic would promote community responsibility and pride. One of the notable costs in running the clinic is the expense of flying in qualified maintenance contractors, since there is a lack of locally trained maintenance staff. Several interviewees cited issues soon after the clinic opened. For example, a boiler maintenance issue was a very frustrating experience for local residents. Nome Energy Projects Overview Denali Commission Energy Program grants in Nome have totaled more than $7.5 million, with approximately $3.8 million of that spent to date. Projects supported by the Commission received total funding of $11.7 million, including funding from other sources. The largest project funded by the Commission was the Diesel “Power Facility Upgrade, a $10.9 million project, ‘including $6.6 million from the Denali Commission. Project details are provided below. Project Title: Power System Upgrade Project ID: 350159 (Start date Sept. 1999, closeout Dec. 2006) Program: Energy Communities: Nome and outlying neighborhoods Recipient Org.: Alaska Energy Authority Funding Sources/Partners: Denali Commission Funding: $770,000 (3% used) State of Alaska: $25,000 (100% used) Total Project Funding: $795,000 Status: Close-out Complete Project Overview: Design and construction of approximately seven miles of distribution line for the extension of electricity to surrounding residential developments in three corridors and rehabilitate portions of existing power grid as necessary to support. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 17 APPENDIX 2 Project Title: Diesel Power Facility Upgrade Project ID: 403002 (Start date Jan. 2003, project still in progress) Program: Energy Communities: Nome and outlying neighborhoods Recipient Org.: Alaska Energy Authority Funding Sources/ Partners: Denali Commission Funding: $6,751,500 (57% used) Community Contributions: $2,158,800 (11% of total “other” funding used) US Department of Energy: $1,996,000 Total Project Funding: $10,906,300 Status: DC database indicates that close-out is complete, but no close-out date given. Project Overview: This project included construction of a new diesel power facility in an improved location (concerning regulations of the near-by airport and flooding from the adjacent river). The new facility will also have a newer and larger diesel generator(s). Nome Energy Projects Evaluation Through the Alaska Energy Authority (AEA), the Nome Joint Utility System (NJUS) received two energy program grants from the Denali Commission - a power system upgrade and a diesel power facility upgrade. The power system upgrade, implemented between 1999 and 2001, was an extension of rural electrification, expanding power in three directions to subdivisions outside the Nome municipality. Some of these residents had previously used generators or kerosene lamps, wind power, or had no power at all. In addition to powering private homes, the rural electrification project allowed the City to expand public lighting, increasing public safety. This project addressed a need for better power to subdivisions and areas bordering Nome, which indirectly diffused a housing crunch within city limits. As Nome is a regional hub for rural villages, this project improved infrastructure and emergency services for the region. The grant process for the NJUS power facility upgrade and relocation started in 2000 but was significantly derailed at one point, causing its completion date to move towards spring 2007. The old plant is located a few yards from the Snake River, near the Nome airport. Relocation was necessary because erosion of the adjacent river banks allows for frequent floods and the plant’s proximity to the airport put the facility smoke stacks in violation with Federal Airport Administration regulations. NJUS felt that problems due to location, and their newly extended coverage, warranted the facility relocation and upgrade. Impacts can only be estimated at this time, as the project was not complete during the time of data collection. Flooding will not be a concern at the new location, which is on higher ground. The new plant’s smoke stacks will not violate federal regulations. With newer equipment, it is likely that facility operation and maintenance costs will be lower. NJUS expects that the power plant upgrade and relocation will resolve service reliability issues stemming from older equipment. Improved reliability and capacity directly enhance community and economic development projects including the new hospital, mine development, and seafood processing. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 18 APPENDIX 2 Golovin Energy Projects Overview Denali Commission Energy Program grants in Golovin have totaled over $3.3 million, with approximately $3 million spent to date. Projects supported by the Commission received total funding of $5.5 million, including funding from other sources. The largest project funded by the Commission was a Regional Power System Upgrade, a $1.7 million project, 99 percent of which came from the Denali Commission. Project details are provided below. Project Title: Bulk Fuel Facility Construction Project ID: 340204 (Start date Oct. 2001, closeout Sept. 2005) Program: Energy Communities: Golovin Recipient Org.: Alaska Energy Authority Funding Sources/ Partners: Denali Commission: $1,363,291 (100% used) State of Alaska: $375,154 (100% used) Total Project Funding: $1,739,218 Status: Close-out Complete Project Overview: Construction for a new bulk fuel facility with a 203,600-gallon capacity. Fuel is delivered by barge twice a year to the facility by pipeline from the marine header adjacent to Golovin Bay. The power plant and school are fed by underground pipeline. Gasoline is dispensed at the gas station. Heating fuel is delivered by trailer. Participants were the City and Bering Strait School District. Project Title: Regional Power System Upgrade Project ID: 350154 (Start date Sept. 1999, closeout in-progress) Program: Energy Communities: Golovin Recipient Org.: Alaska Energy Authority Funding Sources/Partners: Denali Commission: $217,514 (0% used) State of Alaska: $36,928 (100% used) Total Project Funding: $254,442 Status: Close-out In-progress Project Overview: Distribution System Upgrade Project Title: Regional Power System Upgrade Project ID: 350169 (Start date April 2002, closeout June 2006) Program: Energy Communities: Golovin Recipient Org.: Alaska Energy Authority Funding Sources/Partners: Denali Commission: $1,702,935 (99% used) State of Alaska: $12,687 (100% used) Total Project Funding: $1,715,622 Status: In-Progress Pending (9% of funding expended) Project Overview: Design and construction for a new powerhouse, which consisted of a 30x48-ft foam panel building on a steel post and pad foundation adjacent to village water storage tank, 4 diesel generator sets (total capacity 580 kW) and all support systems, and control panels with automatic load sensing, engine paralleling, power data recording, & remote monitoring capabilities. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 19 APPENDIX 2 Golovin Energy Projects Evaluation Through AEA, the village of Golovin has rece: 4 three energy program grants from the Denali Commission - one grant for design and construction of a new bulk fuel storage facility and two grants for regional power system upgrades. Bulk Fuel Facility. Golovin’s bulk fuel storage facility is currently owned by the City of Golovin; the school district partnered on the project. Eight old, small fuel tanks were replaced with two new tanks. The new tanks are larger and double-walled, making them compliant with current federal codes, more spill resistant, and safer for the community and the environment. Additionally, the larger storage capacity allows purchasing efficiencies for the community. Golovin has experienced significant flooding in the past two years. Residents repeatedly expressed concerns that the new tanks are ina flood zone (as were the old tanks). However, residents also acknowledged that delivery from the storage tanks to community buildings is most efficient in this central location. Furthermore, the land at higher elevations was privately owned and was not affordable when the project was under development. The project was locally coordinated by the City of Golovin and the Bering Straight School District. The local IRA Council (Chinik Eskimo Community) felt that there was insufficient discussion between planners and community residents. Residents were frustrated that outside contractors were brought in for the construction. However, tribal council members said that the Denali Commission application process was much more efficient than that of other federal funders. The bulk fuel facility project enjoyed construction cost efficiencies, as deliveries of project materials and equipment were coordinated with the concurrent power system upgrade. Residents have experienced problems with the fuel pumps, which don’t function very well in cold weather. The Commission’s performance indicators for adherence to budget and schedule were useful and fairly comprehensive because the projects’ outcomes were easily measurable. Data regarding the availability and cost of fuel before and after the project would be another useful performance measure. Diesel Power Facility. Golovin’s power system upgrades, totaling about $2 million, met many community needs by providing more reliable power, increased safety, and the ability to meet federal codes. Unfortunately, the community’s recent flood experience is a threat to the newly upgraded plant. The generators, which were initially set on the ground, have since been raised about 4 feet to avoid damage. Some residents felt that the lack of communicaion between the outside designer / project overseer and local residents led to design and location flaws. The construction process followed Commission objectives by providing work opportunities for a few local residents. Facility maintenance has been an issue for the new Golovin plant since its completion. The DCCED Local Government Specialist noted that privately owned/operated facilities (as opposed to AEA owned/operated) are more challenging to run because AEA does not travel to villages to train local operators / maintenance staff on non-AEA facilities. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 20 APPENDIX 2 Other Projects Overview The Denali Commission has funded a range of other projects in Nome and Golovin. Among others, this includes construction of a hostel in Nome, funding for upgrading a women’s shelter in Nome, washeteria design and construction in Golovin, and various training programs. Project Title: Hostel Construction Project ID: ANO5-GE7 (Start date May 2006, closeout June 2007) Program: Other Infrastructure - Other Communities: Nome (and surrounding villages) Recipient Org.: Norton Sound Health Corporation Funding Sources/ Partners: Denali Commission Funding: $1,850,000 (58% used) Norton Sound Health Corporation: $1,320,000 (67% of total “other” funding used) Rasmuson Foundation: $495,000 Total Project Funding: $3,665,000 Status: Construction Project Overview: The project will provide inexpensive/free accommodation for village-based patients and escorts travel to Nome for hospital care. It is intended to be connected (by indoor walkway) to the Nome Replacement Hospital once the hospital is built. Project Title: Bering Sea Women’s Group Facility Upgrade Project ID: No number (Closeout date Aug. 2004) Program: Other Infrastructure - Domestic Violence Communities: Nome Recipient Org.: Council on Domestic Violence Funding Sources/Partners: Denali Commission Funding: $10,000 (100% used) Rasmuson Foundation: $29,750 (0% of “other” funding used) State of Alaska: $16,586 Wells Fargo: $5,000 Total Project Funding: $51,336 Status: Close-out Complete Project Overview: See project overview, below. Project Title: Bering Sea Women’s Group Facility Repair and Renovation Project ID: 05-CIP-09 (Start date April 2004, closeout date Oct. 2005) Program: Other Infrastructure - Domestic Violence Communities: Nome Recipient Org.: Council on Domestic Violence Funding Sources/ Partners Denali Commission Funding: $77,665 (100% used) Total Project Funding: $77,665 Status: Close-out Complete Project Overview: The Bering Sea Women's Group (BSWG) used its grant to install wireless, outdoor video surveillance cameras and split screen video monitors. BSWG also used its funds to install door mounted peep holes, security deadbolts, wall-mounted motion detection floodlights and convex security mirrors to make their facility safer for residents and staff. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 21 APPENDIX 2 Project Title: NCCER Instructor Certification Training Program Project ID: EN 734070 (Start date Sept. 2002, closeout June 2003) Program: Training Communities: Barrow, Golovin, Nome, and White Mountain Recipient Org.: Department of Labor and Workforce Development Funding Sources/Partners: Denali Commission Funding: $12,491 (100% used) Associated Builders and Contractors: $2,500 (0% used) Total Project Funding: $12,991 Status: Close-out Complete Project Overview: Train-The-Trainer project for NCCER Instructor Certification Training Program. Project Title: Training for welders, maintenance mechanics, heavy equipment operators, and pipe fusers Project ID: EN 753078 (Start date April 2005, closeout Aug. 2005) Program: Training Communities: Akiachak, Atka, Hooper Bay, Mekoryuk, Mountain Village, Nome, Tulusak, Whitestone Community Recipient Org.: Department of Labor and Workforce Development Funding Sources/ Partners: Denali Commission Funding: $42,712 (100% used) Total Project Funding: $42,712 Status: Close-out Complete Project Overview: Grant to train welders, maintenance mechanics, heavy equipment operators, and pipe fusers. Project Title: [AID Kawerak, Inc (Bering Strait Region) Project ID: 850011 (Start date June 2004, closeout Dec. 2006) Program: Other Infrastructure - Other Communities: Gambell, Golovin, Koyuk, Savoonga, Shaktoolik, Shishmaref, Stebbins, Teller, Unalakleet, Wales, White Mountain, Elim, Brevig Mission, Diomede, Saint Michael Recipient Org.: Department of Commerce, Community, and Economic Development Funding Sources/Partners: Denali Commission Funding: $59,393 (76% used) Kawerak: $9,332 (108% of total “other” funding used) Local Match: $247,785 Alaska Department of Transportation: $104,696 US Department of Agriculture: $54,696 Total Project Funding: $475,902 Status: Close-out Complete Project Overview: This project prepared community profile maps for 15 communities located in the Bering Straight region. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 22 APPENDIX 2 Project Title: Washeteria Design and Construction Project ID: ANO2-G36-0068 (Start date Jan. 2004, closeout Mar. 2007) Program: Other Infrastructure - Washeterias Communities: Golovin Recipient Org.: Alaska Native Tribal Health Consortium Funding Sources/ Partners: Denali Commission Funding: $818,520 (100% used) Environmental Protection Agency: $165,500 (100% of total “other” funding used) Local Match: $12,500 Total Project Funding: $996,520 Status: Close-out Complete Project Overview: The scope of this project includes design and planning, site preparation, materials and equipment, construction, and labor. Project Title: Washeteria Design and Construction Project ID: ANO2-G36-272 (Not started) Program: Other Infrastructure - Washeterias Communities: Golovin Recipient Org.: Alaska Native Tribal Health Consortium Funding Sources/Partners: Denali Commission Funding: $290,000 (0% used) Total Project Funding: $290,000 Status: Construction Project Overview: The scope of this project includes design and planning, site preparation, materials and equipment, construction, and labor. Project Title: Dust Control Demonstration Project Project ID: DC8 (Start date March 2003, closeout Feb. 2005) Program: Other Infrastructure - Other Communities: Brevig Mission, Elim, Golovin, Teller, Unalakleet White Mountain Recipient Org.: Alaska Department of Transportation and Public Facilities Funding Sources/ Partners: Denali Commission Funding: $352,433 (100% used) Total Project Funding: $352,433 Status: Close-out Complete Project Overview: Commission funding for this project was for the development of a construction phase dust control strategy to serve rural Alaskan villages. Other Projects Evaluation The main objective of the Nome hostel project is to provide an affordable, convenient place to stay for hospital patients and escorts visiting from regional villages. Currently, village-based patients and escorts traveling to Nome for hospital treatment must cover their own costs (accommodation, local transport) unless they have insurance coverage. Additional convenience will be achieved by a walkway between the hostel and the future hospital. Since the new hospital is not yet built and the hostel is not yet open, it is difficult to determine the project’s effectiveness. The expected outcome of the hostel is lowering travel costs for village-based hospital patients and their escorts. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 23 APPENDIX 2 Consistency with Denali Commission Policies Sustainability: All informants, including those directly involved in a local Commission-funded project and those not directly involved, felt that the facility replacement requirement was unrealistic. Most interviewees assumed that when the time comes to replace facilities (health or energy-related), some other government grant or funding source will be pursued. Nome projects seem more likely to be able to cover their operation and maintenance costs than those in Golovin simply because Nome has a larger population and more potential for generating revenues. Several Golovin informants felt that additional training in facility maintenance would help the community better position itself to pay for facility operation and maintenance costs. Private Enterprise: No private competition exists for energy or medical care. (However, one interviewee expressed concern that NSHC’s policy precluded private physicians from hospital access.) The Nome patient hostel could reduce future revenues for area hotels. However, residents also noted that travelers from outlying villages were most likely to stay in private homes. Cost Containment: Based on information from the Denali Commission website, all projects have been completed within budget. The bulk fuel storage facility project in Golovin realized cost savings by coordinating the use of heavy equipment between that project and the power plant upgrade. : Open Door: The open door policy was met by all Commission-funded projects. The Nome hostel will likely have an income-cap for free accommodation or a scaled-fee system, allowing access to all eligible patients and escorts. Investment: The power plant upgrade in Nome will enhance the viability of other community and economic development projects including future mines, seafood processing, and the new Nome hospital. Key Site Visit Observations * Nome interviewees believed that Denali Commission plays an important role as a funding magnet and inter-agency coordinator. * The consensus from Nome and Golovin informants is that the Denali Commission's application and grant process is more efficient than those of other federal funders, particularly when dealing with multiple funders. ¢ Providing one point of contact for multiple funding organizations is considered a vast improvement other earlier federal granting processes. * Accessibility to, and support from, Commission staff regarding application questions and project issues were also appreciated by many people who had been locally involved in Commission-funded projects. * Intermediary organizations, such as the Norton Sound Health Corporation, Kawerak, and the Alaska Energy Authority played crucial roles in making Nome/Golovin projects feasible and successful. These organizations have developed an important capacity to facilitate the granting process, as well as to conduct project planning and implementation. * The Nome Joint Utility System spoke about their challenge to meet evolving Commission requirements throughout a lengthy application and granting process. They suggested that the requirements in place at the start of an application should be the only requirements applied throughout the entire Denali Commission Program and Policy Review McDowell Group, Inc. + Page 24 APPENDIX 2 process so that the applicant has a clear understanding of expectations from the beginning. * Concerns mentioned during local interviews included the limitations of the Commission’s “distressed” and “non-distressed” categorization. Nome informants felt that these groupings did not account for middle-sized communities, such as Nome, which are not necessarily distressed communities themselves, but serve as regional hubs for surrounding, often distressed, rural villages. Golovin residents fear that their postal code, which is the same as Nome’s postal code, is a factor in the non-distressed categorization of their community. They feel that Golovin should be classified as a distressed community. * Golovin residents desire involvement and coordination in Denali Commission projects at the regional and local level to maximize local benefits and success. * Nome interviewees stressed the importance of strengthening village infrastructure and economies. Similarly, Nome wants to ensure that it can meet the region’s needs as a transportation hub, medical center, and supply center. Golovin residents remain concerned about erosion threats. * Residents desire further exploration of alternative energy throughout the region. * Golovin residents are strongly interested in future employment and training opportunities—especially if they are conveniently offered in terms of location, time commitment, and do not conflict with critical subsistence activities. Selected Informant Comments “The additional reliable power is helping to facilitate other economic development projects.” “Denali Commission should require the recipient to cover maintenance and operations for the useful life of the facility.” “Denali Commission staff is extremely helpful.” “Don’t partially fund projects. With the changeover in Denali Commission leadership, the money for Nome disappeared. This created problems as we were trying to get funds from other organizations.” “They can work with a community on a project, even if all the criteria are not met. That is good and bad, as the Denali Commission process is not extremely clear.” “They should routinely look at changes and social factors when determining if a community qualifies.” “Power and health were the right priorities. There was a big backlog of needs in rural Alaska. Everyone kept limping along. Inefficient, nasty little clinics, oils spills, etc.” “Denali Commission uses only 5 percent for administration. The money gets to the people. To the end product.” “There is a planning gap at Denali Commission. You need a contractual agreement to tie funding commitments, get partners, and build momentum.” “It was more challenging before Denali Commission. It is easier to work with an organization that has a health care mission.” Denali Commission Program and Policy Review McDowell Group, Inc. * Page 25 APPENDIX 2 “We used to have to spend a lot of time putting our own network together for projects.” “Denali Commission staff came several times to meet with our board. They visited villages.” “Once you start a project, you gain skills and knowledge from the planning process. New contacts.” “T have no idea where the money would come from for bulk fuel and electrical projects without the Denali Commission. It would take 100 years if you had to rely on the State.” “We need money to expand training in the villages. If you take the kids out for training, they are more likely to stay out.” “Very few single agencies get things done. You have to partner. With Denali Commission, we can walk things through Congress as a group.” Denali Commission Program and Policy Review McDowell Group, Inc. * Page 26 APPENDIX 2 Site Visit to Kodiak and Port Lions, Western Gulf of Alaska February 26 — 28, 2007 McDowell Group Field Staff Erin Harrington, Manager of McDowell Kodiak Operations Karen McIntyre, McDowell Group Research Analyst Key Informants Kodiak Linda Freed, City Manager, City of Kodiak Jimmy Ng, Executive Director, Kodiak Island Health Care Foundation Matt Jamin, Treasurer for the Board, Threshold Services, Inc. Richard Pillans, Recycle Plant Manager, Threshold Services, Inc. Letitia Raub, Executive Director, Kodiak Women’s Resource and Crisis Center Port Lions Wayne Lukin, Tribal Administrator, Native Village of Port Lions Steve Andresen, Vice-Mayor, City of Port Lions Ivan Lukin, Tribal Council President, Native Village of Port Lions Dorinda Kewan, Grants Administrator, Native Village of Port Lions Julie Kaiser, Tribal Council Member, Native Village of Port Lions Susan Kewan, Tribal Council Member, Native Village of Port Lions Marv Bartleson, Mayor, City of Port Lions Community Overview Kodiak Island is located 252 air miles southwest of Anchorage, in the Gulf of Alaska. The Kodiak Island Borough encompasses 6,500 square miles of land and 5,500 square miles of water. There are numerous communities on Kodiak Island, including six traditionally Native Alaskan villages and the “road system” communities, which include the City of Kodiak. For the purposes of this report, “Kodiak” refers to the City of Kodiak plus the surrounding suburban population, all located on the road system. Kodiak is the hub community that serves as the locus for transportation, supplies, health care, and other services for residents of surrounding villages. Kodiak is served by several marine shipping companies that link to Seattle. Passenger airlines Alaska Airlines and ERA Aviation provide multiple daily flights to Anchorage. The Alaska Marine Highway System provides service to and from Homer several times per week during about three-quarters of the year. Kodiak’s Marine Highway route also connects it to the ferry-serviced communities of the Alaska Peninsula and Aleutian Islands. Kodiak’s economy is driven primarily by the seafood harvesting and processing industries and the U.S. Coast Guard base. More than 360 million pounds of seafood was landed in Kodiak in 2005, with a value of $95.2 million. The Coast Guard base employs approximately 1,300 military and civilian workers, and there are an additional 1,700 military dependents. * Kodiak Chamber of Commerce. Kodiak Community Profiles and Economic Indicators, 2007: 1“ Quarter. Retrieved March 5, 2007 at http:/ / www.kodiak.org / pdfs /cpr0107.PDF Denali Commission Program and Policy Review McDowell Group, Inc. * Page 27 APPENDIX 2 Kodiak is an ethnically diverse community. Races and ethnicities represented in the road system communities include white, Alaska Native, Pacific Islander, Asian, African American, and Hispanic and/or Latino. Although Kodiak’s economy is more developed than that of the island villages, it retains important characteristics of remote, rural Alaska communities. The U.S. Fish and Wildlife Service Federal Subsistence Board confirmed Kodiak’s rural subsistence status during a 2006 review.” Port Lions is located in Settler Cove on the north coast of Kodiak Island, approximately 19 air miles west of the city of Kodiak and 247 air miles southwest of the city of Anchorage. The town has a population of 256' (Census 2000) and was founded in 1964 by displaced inhabitants of Afognak village, which was destroyed by a tsunami after the Good Friday earthquake. The majority of the population is Alutiiq. The economy of Port Lions is based primarily on commercial fishing, fish processing and tourism. All of the residents depend to some extent on subsistence food sources such as salmon, crab, halibut, shrimp, clams, duck, seal, deer and rabbit. Port Lions is accessible by air and water. There is a State-owned gravel airstrip and the city dock may be used by seaplanes. Regular and charter air flights are available from Kodiak. The boat harbor with breakwater and dock provides 82 boat slips. The Alaska Marine Highway System operates ferry service to Port Lions. Depending on the time of year, sailings are as frequent as twice a week. Winter service is limited to times when the F/V Tustumena is running. Typically, service is not available for several months each winter. Barge service is no longer available to the community. This is a recent development (in the last two years). Funding Summary The Denali Commission has funded 6 projects in the City of Kodiak for a total of $0.5 million. Total funding for those projects was $1.1 million, including funding from other sources. Commission- -supported projects include two Health Program projects, three Domestic Violence Program projects and one Solid Waste Program project. Projects are described and evaluated by major project area, below. The Commission has also funded 6 projects in Port Lions for a total of $2.6 million. Those projects received another $0.3 million in funding from other sources. Commission-supported projects include two Health Program projects, one Energy Program project, two Solid Waste projects and one Economic Development project. Projects are described and evaluated by major project area below. * Federal Subsistence Board, “Federal Subsistence Board Adopts Final Rule on Rural / Nonrural Status Changes.” News release, December 14, 2006. *Community members presently estimate the population at approximately 195 people. Denali Commission Program and Policy Review McDowell Group, Inc. « Page 28 APPENDIX 2 Kodiak Health Program Projects Overview Denali Commission Health Program grants in Kodiak have totaled $482,121, with all funding spent to date. Projects supported by the Commission received total funding of $974,241, including funding from other sources. The largest project funded by the Commission was the purchase of a CT Scanner for the Providence Kodiak Island Medical Center, a $582,241 project, including $291,121 from the Denali Commission. Detail on this and other Health Program projects is provided below. Project Title: Providence Kodiak Island Medical Center CT Scanner Project ID: 218-06-B Program: Health Care: Hospitals Community: Kodiak Recipient Org.: Alaska State Hospital and Nursing Home Association Funding Sources/Partners: Denali Commission Funding: $291,121 Local Match: $291,120 Total Project Funding: $582,241 Status: Project close-out complete Project Overview: The purchase of a CT Scanner. Project Title: Providence Kodiak Island Medical Center - X-Ray Machine and Detection System Project ID: 06-4-C-4894 Program: Health Care: Other Community: Kodiak Recipient Org.: Department of Health and Social Services Funding Sources/Partners: Denali Commission Funding: $191,000 Local Match: $231,000 Total Project Funding: $422,000 Status: Project close-out complete Project Overview: The purchase of a computer aided detection system for mammography and an X-ray machine and support equipment. Kodiak Health Program Projects Evaluation There had been discussion surrounding the need for new medical equipment in the Providence Kodiak Island Medical Center for over three years before an application for Denali Commission funding was submitted. Staff at the medical center felt it was important to obtain new equipment (including X-ray machine, CT Scanner, and a detection system for mammography) so that specialized services that were unavailable at that time could be provided on the island. Prior to receiving Denali Commission funding to purchase this equipment, patients had to travel to Anchorage to receive these services. In 2003, a review and re-prioritization of equipment needs took place that eventually lead to the application for funding from the Denali Commission to purchase the equipment. The Kodiak Island Borough and the Kodiak Island Health Care Foundation have been working with the Providence Kodiak Island Medical Center (PKIMC) to expand the scope of medical services available and improve medical care and access through the PKIMC Patient Care and Facilities Improvement Project. The equipment purchases funded by the Denali Commission were one component of this project. In Denali Commission Program and Policy Review McDowell Group, Inc. * Page 29 APPENDIX 2 2003, PKIMC and the Kodiak Island Borough began focusing on patient care support and capital improvement issues. This process included a review and re-prioritization of the hospital’s capital equipment list, patient care equipment needs and modernization of facilities and process improvements. This planning review process primarily involved PKIMC and Kodiak Island Health Care Foundation. However, several key participants have contributed to the project. These partners include the Kodiak Island Borough, the Rasmuson Foundation, Department of Health and Social Services, MJ Murdock Charitable Trust and the Denali Commission. The final ratio of Denali Commission funds to match existing funds exceeded the required 50% match. A higher quality of care is possible in the Providence Kodiak Island Medical Center as a result of new equipment. The equipment saves time and cost associated with traveling and provides patients with timely, convenient and high quality care. These equipment purchases also resulted in ten new jobs, according to local sources. Interviewees commented that they were required to submit separate applications to several agencies in order to receive each round of funding for the project. They would like to see agencies coordinate their processes to a greater degree. PKIMC developed a business plan with the assistance of the Department of Health and Social Services. This was a useful process for the organization and it proceeded relatively smoothly and was approved in a timely manner by the Denali Commission. Interviewees indicated that DC staff were helpful, forthright and flexible. Interviewees commented that DC is flexible in the sense that it does not use a “one model fits all” approach. PKIMC is also seeking funding assistance from partners for a $2.5 million hospital construction and rehab project. This project involves adding ‘on to the existing hospital building to accommodate the growth of the main hospital building and converting administrative spaces for use by the New Start Community Health Center. Other Kodiak Projects Overview Other Denali Commission-funded projects in Kodiak include Solid Waste equipment purchases and facility improvements to the Kodiak Women’s Resource and Crisis Center (KWRCC). Project Title: Solid Waste Equipment Purchase Project ID: 209-06 Program: Other Infrastructure: Solid Waste Community: Kodiak Recipient Org.: Threshold Services, Inc. Funding Sources/Partners: Denali Commission Funding: $46,000 Total Other Funding: $31,829 Local Match: $4,750 Rasmuson Foundation: $27,079 Total Project Funding: $77,829 Status: Project close-out complete Project Overview: The funds awarded to Threshold Inc. were used to purchase a vertical baler and electric lift truck. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 30 APPENDIX 2 Project Title: Kodiak Women’s Resource and Crisis Center (KWRCC) Project ID: no number Program: Other Infrastructure: Other Community: Kodiak Recipient Org.: Council on Domestic Violence (DPS) Funding Sources/Partners: Denali Commission Funding: $10,000 Total Other Funding: $57,150 Rasmuson Foundation: $45,351 State of Alaska: $6,799 Wells Fargo: $5,000 Total Project Funding: $67,150 Status: Project close-out complete Project Overview: Repair and renovation to the Kodiak Women’s Resource and Crisis Center, including new windows, new roofing and new viny! siding on the exterior of the building. Project Title: Repair and Renovation: Domestic Violence Facility (KWRCC) Project ID: 05-CIP-07 Program: Other Infrastructure: Domestic Violence Community: Kodiak Recipient Org.: Council on Domestic Violence (DPS) Funding Sources/Partners: Denali Commission Funding: $6,682 Other Funding: $0 Total Project Funding: $6,682 Status: Project close-out complete Project Overview: Funding for a new security and alarm system. Project Title: Facility Improvements (KWRCC) Project ID: 06-CIP-12 Program: Other Infrastructure: Domestic Violence Community: Kodiak Recipient Org.: Council on Domestic Violence (DPS) Funding Sources/Partners: Denali Commission Funding: $10,213 Local Match: $8,356 Total Project Funding: $18,569 Status: Project close-out complete Project Overview: Facility improvements to the Kodiak Women’s Resource and Crisis Center, including a new heating system and carpeting. Other Kodiak Projects Evaluation In the case of the solid waste project, Threshold Services Inc. had been discussing the issues of efficiency and safety in the recycling and processing plant for two years prior to applying for funding. With the purchase of a vertical baler and electric fork lift, it was believed that the plant could operate much more efficiently in terms of handling and processing more product. Threshold Services Inc. contacted the Denali Commission directly. They were put in contact with the Solid Waste Program Manager, who provided them with the necessary information to submit a grant application. Interviewees reported that it took about four weeks to gather all of the required information for the grant application, and the specifics on 1 the equipment that they needed for their recycling program. They originally applied for a tier one grant and asked for $130, 000, but were partially funded for $46,000. After the Denali Commission Program and Policy Review McDowell Group, Inc. * Page 31 APPENDIX 2 equipment was in place and operating, and they had submitted reports to the Commission, they applied for a second round of funding. The equipment purchases, including a vertical baler and electric lift truck, have assisted them in being able to process 17 percent more product and have resulted in a safer environment for employees. As a result of its application in the second round of funding, Threshold was awarded $47,531, which they are expecting to receive by mid-April 2007. The funds are to be used for another baler, a waste oil furnace to recycle used cooking oil, and 20 sorting /storage totes. Interviewees said that Denali Commission staff were helpful and responsive and that they provided a user-friendly grant application. The approval process was completed in a timely fashion. Interviewees emphasized the ease of the application and approval process and had no suggestions for improvement with regards to this process. Kodiak Women’s Resource and Crisis Center had been discussing the need for various repairs and renovation on their facility for 8 years. Staff at KWRCC felt that these problems needed to be dealt with to save money on utility bills, improve the morale of staff and clients, and to improve safety and security in the building. Interviewees stated that the Council on Domestic Violence and Sexual Assault (CDVSA) was their primary contact and they did not deal directly with the Denali Commission. The CDVSA assisted them with the grant application. In 2004, they received funding from the Denali Commission for new windows, new roofing and new vinyl siding on the exterior of the building. These repairs were completed in December of 2004. They received additional funding i in 2005 for a security and alarm system and for a new heating system and new carpeting in 2006. It was reported that the initial approval process took over a year to complete. Interviewees believe that the approval process was quite slow and could have been more efficient. Interviewees expressed frustration at having to repeatedly obtain estimates from contractors on the proposed repair and renovation work because they had to update the estimates throughout the approval process. However, they also stated that they could not have completed this project without Denali Commission funding and they were very satisfied with the results. Local contractors completed the repairs and renovations to the KWRCC facility and it was reported that the work was done professionally and efficiently with no major problems. It was reported that Denali Commission funding and the high quality of work carried out by contractors has contributed to the sustainability of the organization and extended the life of the building considerably. The new vinyl siding on the exterior of the building is maintenance free and KWRCC believes the new windows and heating system will result in lower utility bills. They are currently tracking changes in utility bills. The improvements to the building have added to the overall morale of staff and clients and the feeling of safety in the building. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 32 APPENDIX 2 Port Lions Health Program Projects Overview Denali Commission Health Program grants in Port Lions have totaled $1.6 million, with approximately $1.4 million of ‘that spent to date. Health Program projects supported by the Commission received total funding of $1.9 million, including funding from other sources. The largest project funded by the Commission was the construction of a new health clinic, a $1.7 million project, including $1.4 million from the Denali Commission. Detail on this and other Health Program projects is provided below. Project Title: Clinic Design Project ID: ANO4-GA3 (Start date: July 28, 2006; closeout: Nov. 30, 2006) Program: Health Care: Primary Care Community: Port Lions Recipient Org.: Alaska Native Tribal Health Consortium (ANTHC) Funding Sources/Partners: Denali Commission Funding: $166,000 KANA: $16,500 Total Project Funding: $182,500 Status: Project close-out complete Project Overview: Planning and design of a new health clinic to replace existing clinic. Project Title: New Clinic Construction Project ID: ANO4-GB4 Program: Health Care: Primary Care Community: Port Lions Recipient Org.: ANTHC Funding Sources/Partners: Denali Commission Funding: $1,407,740 Alaska Mental Health Trust Authority: $50,000 IHS Tribal Equipment: $251,524 Total Project Funding: $1,709,264 Status: Construction Project Overview: Construction of new health clinic to replace existing clinic, including emergency services space, expanding and equipping existing dental space, and staff quarters. Port Lions Health Projects Evaluation The need for a new health clinic in Port Lions and improved equipment had been recognized prior to the existence of (or local awareness of) Denali Commission programs. The community had reportedly been discussing this need for longer than a decade. There are a number of issues with the previous clinic including a lack of adequate space, no housing provided for traveling healthcare providers and a need for new equipment. The community was able to make use of the Denali Commission Health Program to address its identified needs for a new clinic facility. Port Lions developed a community plan in 2002 that outlined community needs and goals. That plan was updated in 2006 in partnership with the Kodiak Island Housing Authority (KIHA). KIHA supported community planning in five of six of the small villages on Kodiak Island. (That planning process followed the Denali Commission’s community planning template and was intended to support community partnerships with the Denali Commission. However, it was not undertaken solely for the purpose of obtaining Denali Commission funding.) Denali Commission Program and Policy Review McDowell Group, Inc. + Page 33 APPENDIX 2 Community members noted that the community planning process was valuable. It helped bring community members together to establish community goals and intentions. Interviewees commended the Denali Commission for requiring communities to undertake this process. They also noted that they were pleased the Denali Commission now has copies of their community plan on file, and can reference it to see if future applications and programs match the community’s stated needs. The Denali Commission worked primarily with the Native Village of Port Lions to implement the project. The Native Village of Port Lions is the traditional tribal council for the Port Lions Alaska Native community. The Tr.0e is responsible for administering health care in the community. The Kodiak Area Native Association (KANA) is a health consortium that receives funding from Indian Health Services on behalf of the Kodiak Island tribes, including the Native Village of Port Lions. KANA also provides the visiting clinicians for the clinic. The Tribe partnered with the Afognak Native Corporation and with the City of Port Lions to procure the necessary land for the development. The Afognak Native Corporation donated the land for the development to the City of Port Lions, which in turn gave the land to the Native Village of Port Lions. Tribal staff prepared a business plan for the new clinic and said they were assisted in the planning by ANTHC. According to staff, the business plan went through three revisions before approval. Staff believe they are getting better at the business planning process. Interviewees say that at peak construction there were ten workers employed. All jobs were local hire with the exception of the supervisors, who were hired from the regional hub of Kodiak. The clinic will be operated with the same local staff who worked in the previous facility, with continuing oversight from KANA, as in the previous clinic. Clinic operations include visits by traveling physicians and dentists and their support staff, as well as primary care provided by health aides living in the Port Lions community. There were no major problems reported with the clinic construction. There were minor changes and amendments. Some of these were suggested by local project participants. For instance, a small wall was installed between the waiting area and the check-in desk to provide an additional layer of privacy for patients. The construction process was able to accommodate these suggested improvements. In general, construction was considered to be in line with typical projects. The new clinic is expected to provide significantly improved treatment facilities and quality of care. Community members noted that the project likely would not have happened without the Denali Commission’s program support and funding. Port Lions Energy Projects Overview Denali Commission Energy Program grants to Port Lions totaled $952,036 for bulk fuel facility upgrades, with approximately $756,420 of that spent to date. There was no funding from other sources for this project. Details on this project are provided below. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 34 APPENDIX 2 Project Title: Bulk Fuel Facility Project ID: 340258 Program: Energy: Bulk Fuel Community: Port Lions Recipient Org.: AEA Funding Sources/Partners: Denali Commission Funding: $952,036 Other Funding: $0 Total Project Funding: $952,036 Status: Construction Complete Project Overview: Retrofit and repair of the existing bulk fuel storage facility including building a new pad and relocating and upgrading the existing tanks, co-locating and consolidating the storage with the dispensing, providing a new 3 product dispensing tank, and refurbishing the on dock marine header for taking on fuel from barge shipments. Port Lions Energy Projects Evaluation The bulk fuel facility upgrade was a proactive initiative by the Native Village of Port Lions. A wholly owned subsidiary of NVPL, Kizhuyak Oil Sales, operates the fuel company that services the town. NVPL identified a need for eventual facility upgrades, and was able to use the Denali Commission program to extend the life of the facility and to bring it into better environmental compliance. This project is best described as scheduled maintenance and upgrades rather than deferred maintenance or critical repairs. The Native Village of Port Lions prepared a business plan for the facility upgrades and improvements, in partnership with the Alaska Energy Authority, which managed construction. Contractors installed some of the control systems for the facility. No new jobs were created as a result of the upgraded facility. Operation of the bulk fuel facility is by Kizhuyak Oil Sales. This company employs locals exclusively. The bulk fuel facility is currently operational. Interviewees noted that the new system is more efficient for fueling. It also reduces the likelihood of fuel spills. The lifetime of the facility was expanded. The new facility also provides better access for marine fueling. Residents haul fuel from the facility to their homes for home heating and uses. They noted that the new dispensing system streamlines the process for accessing both gasoline for automobiles and #1 and #2 diesel for home and auto use. In the previous fuel farm configuration, customers had to visit multiple pump sites to get their fuel. In the new system, they are able to obtain diesel and gas at the same site. Interviewees also noted that the new facility creates a certain amount of pride and good feeling in the community. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 35 APPENDIX 2 Other Port Lions Projects Overview Other Denali Commission-funded projects in Port Lions include solid waste equipment purchases and a dock feasibility study. Project Title: Solid Waste Equipment Purchase Project ID: 192-05 Program: Other Infrastructure: Solid Waste Community: Port Lions Recipient Org.: Port Lions, City of Funding Sources/Partners: Denali Commission Funding: $12,750 In-Kind Match: $5,691 Total Project Funding: $18,441 Status: Project close-out complete Project Overview: Purchase of bear-proof dumpsters for use in the new garbage collection and control program. Project Title: Solid Waste Equipment Purchase Project ID: 207-06 Program: Other Infrastructure: Solid Waste Community: Port Lions Recipient Org.: Port Lions, City of Funding Sources/ Partners: Denali Commission Funding: $53,612 Local Match: $898 Total Project Funding: $54,510 Status: Project close-out complete Project Overview: Purchase of a Dump Truck for Solid Waste Operations. Project Title: Port Wakefield Dock Feasibility Study/Repair or Replacement Project ID: 850328 Program: Economic Development Community: Port Lions Recipient Org.: Dept. of Commerce, Community and Economic Development Funding Sources/Partners: Denali Commission Funding: $8,470 Other Funding: $0 Total Project Funding: $8,470 Status: Project close-out complete Project Overview: Project funds will be used to hire an engineering firm to conduct a feasibility study to determine if the dock can be repaired or if it will need a total replacement. The study will be used as a guide to help the community provide a long-term solution to the viability of the dock structure. It will be used, as a basis for securing the funding the City will need to implement the solution. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 36 APPENDIX 2 Other Port Lions Projects Evaluation Port Lions has had a problem with dump-reliant bears for a number of years. Community members frequently have to shoot bears that are attempting to enter homes and other property. They have been partnering with several agencies, including the US Fish and Wildlife Service and the Alaska Department of Fish and Game, to address this problem. The total effort includes purchase (and pending installation) of electric fencing, clearing forested areas around the dump site (completed), public education, and the planned installation of the bear proof dumpsters. The Denali Commission solid waste program supported this effort by funding purchase of a dump truck and bear-proof dumpsters for use in the new garbage collection and control program. The dumpsters are expected to make the community cleaner and safer. Residents anticipate a reduction in bear problems, and expect to see these beginning in summer of 2007. A dock feasibility study has recently been conducted to determine if the local dock can be repaired or if it will need a total replacement. The study will be used as a basis for securing the funding the City will need to implement the solution. The community has not yet receiv red the results of this study and informants indicated that they plan to apply for funding from the Denali Commission to repair or replace the dock. There is presently some uncertainty as to how the community will proceed with the repair/replacement as residents of all of Kodiak’s remote villages are currently working together on a possible inter-community ferry system. This development may impact engineering needs for a new dock. Community members are evaluating their project in light of this development. Consistency with Denali Commission Policies Kodiak Sustainability: The sustainability of the Threshold operation will be contingent upon its ability to increase throughput at the facility. The Denali Commission investments are anticipated to help the organization achieve this, and as a result will likely contribute significantly to the future sustainability of the organization. KWRCC has been operating in the Kodiak community for more than two decades. The organization has proved sustainable to this point. The shelter facility did have significant deferred maintenance that impacted the well-being of staff and shelter residents/clients. The Denali Commission project enabled the organization to perform that maintenance. The future sustainability of the organization was not likely contingent upon receipt of that funding, but it certainly improved the quality of the services provided by the organization, and prevented the organization from being forced to use other funds to perform this maintenance. Private Enterprise: Threshold: The existing solid waste contracting firm in Kodiak (Waste Management) does not provide recycling services as part of their contract. Therefore, Threshold does not appear to be competing with private enterprise through its activities. Kodiak Women’s Resource and Crisis Center: Not applicable Cost Containment: Based on available documentation, projects completed in Kodiak have been within budget. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 37 APPENDIX 2 Port Lions Sustainability: The health clinic has not yet opened. However, the community has a track record of sustainable operations with the previous health clinic and they anticipate that upkeep of the new facility will not be substantially more costly than current operations. While the bulk fuel facility is relatively new, the community has a track record of sustainable operations with the bulk fuel facility. Community initiative has been demonstrated by community members proactively initiating discussions and taking responsibility for the upgrade before any potential problems with the bulk fuel tank occurred. This project is best described as scheduled maintenance and upgrades rather than deferred maintenance or critical repairs. The community anticipates that upkeep of these facilities will not be substantially more costly than previous operations. Kizhuyak Oil Sales has typically operated “in the black.” Private Enterprise: Funded Health Program projects do not compete with private businesses. The bulk fuel project has benefited private enterprise in the Port Lions community with respect to Kizhuyak Oil Sales (KOS). In order to receive Denali Commission funding for this project, KOS agreed terms under which a “secondary operator” might assume control of the facility if the company were to have challenges operating it. While KOS has a long history of profitable operation, there was some concern that they might lose control of the facility in a time of financial hardship. Cost Containment: Based on available documentation, design and construction of the health clinic in Port Lions has been within budget. Tribal members said costs associated with the bulk fuel facility may have been reduced through the use of manual versus electronic valve controls. Some questioned whether the facility engineering may have exceeded the community needs. Open Door: The new clinic is required to have an open door policy; however, the previous clinic did not operate under an open door policy. There are ongoing discussions with KANA regarding the implications of this policy. Presently, staff are uncertain of how this policy will be implemented. Investment: Regarding the clinic, no observable impacts; however, Port Lions appears to be a good candidate for funding in terms of capacity in the community to maintain and operate facilities. Community members noted that the fuel system may support marine tourism opportunities as vessels will be better able to refuel at the community’s dock. Port Lions is presently home to a number of fishing and hunting lodges, and this activity appears to hold some potential for supporting economic development in the community in the future. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 38 APPENDIX 2 Key Site Visit Observations Kodiak Informants commented that the Denali Commission effectively brought diverse types of funders to the table (ranging from private donors to state and federal funders) to talk about development projects. Kodiak Informants generally agreed that joint coordination between funding agencies has improved over time and that funding partners communicate more and share information more openly as a result of Denali Commission coordinating efforts. Comments were made regarding the requirement to submit separate applications to several funding agencies in order to receive funding for one project. The suggestion was made that agencies coordinate their processes to a greater degree so that multiple applications and approval processes are not necessary. Port Lions informants said they had little direct experience with the process of bringing various funding agencies to the table in order to make projects happen. They suggested that Denali Commission staff try to spend more time “on the ground” in communities applying for or receiving funding. Port Lions community members suggested that a regional approach to project funding by the Denali Commission might improve their programs. They believe that different regions in Alaska have different infrastructure needs and that current programs may not match well with certain regions. Though Kodiak is not a “distressed” community, it serves as the hub to a number of communities that are distressed. Interviewees suggested that it was important to consider its role as a central location for island-wide services and infrastructure development. Community members found that their needs aligned well with the Denali Commission project priorities and funding opportunities. The separate programs for Health Clinics and Multi-Use Facilities may have prevented some project synergies in Port Lions, where both types of facilities were necessary, but are being approached individually. The six rural villages on Kodiak Island undertook community planning processes on approximately the same time frame, with centralized assistance from a consultant paid for by the Kodiak Island Housing Authority and some of the communities. The planning process helped the communities identify shared concerns and issues, and resulted in cooperation and synergy between the communities. This model may provide some benefit in future regional planning. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 39 APPENDIX 2 Selected Informant Comments Kodiak “Construction estimates went up substantially and getting [multiple] bids became a real issue.” “Funding matched needs perfectly.” “Everyone wants a business plan... if the Denali Commission accepts a business plan, it should be accepted across many [federal] agencies.’ “There is good coordination between funding agencies and partners.” “The Denali Commission has allowed rural communities to do things that they wouldn’t have otherwise been able to do.” “T prefer a method where you can draw down on funds rather than go for re- imbursement.” (Comparing different partner models) “Tf Denali goes under, our project dies.” “Denali Commission meetings with funding partners are really helpful.” “Denali Commission staff have been very helpful and flexible.” “Projects have met community needs and helped us to keep services on the island.” “Denali Commission funding made our organization more sustainable.” “We would not have been able to purchase the equipment without Denali Commission funding at that time.” Port Lions “The application for the project was a learning experience. Generally, we got through the application process fairly smoothly.” “The business planning process was useful and valuable.” “Tt is a no-brainer [that the community will look to Denali Commission for funding in the future].” “The Denali Commission needs to meet with people in the community. They need to use a bottom-up, rather than a top-down, approach.” “Denali Commission needs to recognize regional differences [in the state].” “Denali Commission shouldn’t use a one-size-fits-all approach. All regions and communities are different.” “The bulk fuel facility is] definitely a boost to the lifestyle.” “Denali Commission has helped the community tremendously to carry on despite the loss of people.” [This is in relation to people leaving the community to find employment opportunities elsewhere. ] “It’s 100% improvement... it’s [the bulk fuel facility] more efficient, cleaner, easier to operate. The previous equipment was poorly designed.” “Denali Commission has really picked up the pieces. It helped the community get back up to date.” Denali Commission Program and Policy Review McDowell Group, Inc. « Page 40 APPENDIX 2 Site Visit to Bethel, Kwethluk and Napaskiak, Western Alaska February 6 — 9, 2007 McDowell Group Field Staff Scott Miller, McDowell Group Senior Consultant Bethel Wally Baird, city manager, City of Bethel John Malone, area director, USDA Rural Development Bob Herron, special assistant, Alaska Congressional Delegation Luke Welles, CFO, Yukon Kuskokwim Health Corporation Myron Nenang, chairman, Association of Village Council Presidents (AVCP) Ron Hoffman, director, AVCP Housing Authority Bill Ferguson, superintendent, Lower Kuskokwim School District (LKSD) Kate McIntyre, capital projects, LKSD Carl Berger, executive director, Lower Kuskokwim Economic Development Council (local ARDOR) (Interview conducted in Juneau) Michelle DeWitt, executive director, Tundra Women’s Coalition (Denali Commission grantee) LaMont Albertson, Director; Tiffany Longan, Programs Manager; Yuut Elitnaurviat (People’s Learning Center) (Denali Commission grantee) Kwethluk David Epchook, mayor, City of Kwethluk Max Angellan, director, Kwethluk Tribal Residential Council; City of Kwethluk Phillip Guy, Kwethluk, Inc. Margaret Fitka, City Manager James Nicori, President, Kwethluk Inc., Organized Village of Kwethluk George Guy, manager, local utility Herman Evan, Kwethluk, Inc. Chariton Epchook, Kwethluk, Inc. Martha Jackson, Kwethluk, Inc. Napaskiak Phillip Nicolai Jr., tribal administrator for the Native Village of Napaskiak, also president, Napaskiak, Inc. Elinor Okoviak, mayor, City of Napaskiak Fanny Stephen, city clerk, City of Napaskiak Andrew Evan, board of directors, local power utility Paul Guy, board of directors, local power utility Denali Commission Program and Policy Review McDowell Group, Inc. + Page 41 APPENDIX 2 Community Overview Bethel is located approximately 400 miles southwest of Anchorage, on the lower Kuskokwim River. It is the regional hub community for 56 area villages and the largest regional hub in western Alaska. It is home to the Lower Yukon School district, and Yukon Kuskokwim Regional Health Corporation. The ANCSA regional corporation is Calista Corporation, headquartered in Anchorage. Kwethluk is located about ten air miles (18 river miles) north of Bethel. Napaskiak is located about 5 air miles (ten river miles) southeast of Bethel. There are no roads between Bethel and Anchorage, nor between Kwethluk or Napaskiak and Bethel. During the coldest winter months it is possible, and not uncommon, for residents to drive vehicles and snow machines between local communities on the ice of the Kuskokwim River and its tributaries and sloughs. However, air travel is the dominant form of inter-community transportation. Community leaders in Kwethluk, are well aware that the village needs private enterprise. The community plan identifies several potential businesses, some of which have been explored further. Additional business planning needs to be done. Realistically, however, there are few commercial opportunities. One idea for a local business is a commercial garden to supply the community and possibly export products, as well. Whether this is indeed a revenue opportunity requires more analysis. However, the potential of a community garden seems worth exploring on its own merits in terms of lowering living costs, improving health, and building community relationships and skills. The populations of all three communities have been increasing since the 1990 census. Kwethluk is classified as distressed by the Denali Commission. Bethel and Napaskiak are considered non-distressed. Kwethluk is 95 percent Alaska Native. Napaskiak is 98 percent Native. Bethel is 68 percent Native. Per capita income in the three communities as of the 2000 Census was: $6,500, $8,200 and $20,265 respectively. Funding Summary Bethel projects have received $11.7 million in Denali Commission funding, Kwethluk projects $7 million, and Napaskiak $2.4 million. Projects in Bethel have been primarily smaller ones, with the exception of a regional training facility and a yet-to- be constructed assisted living facility. Both Kwethluk and Napaskiak have received funding for new tank farms and medical clinics, among other projects. Bethel, Kwethluk and Napaskiak Health Program Projects Overview Project Title: Bethel Family Clinic Renovation Program: Health Care: Primary Care Community: Bethel Recipient Org.: Alaska Native Tribal Health Consortium Funding Sources/ Partners Denali Commission Funding: $164,023 Local Match: $36,973 Total Project Funding: $200,996 Status: Project close-out complete Project Overview Clinic renovation Denali Commission Program and Policy Review McDowell Group, Inc. + Page 42 APPENDIX 2 Project Title: Kwethluk Clinic Design and Construction Program: Health Care: Primary Care Community: Kwethluk Recipient Org.: Alaska Native Tribal Health Consortium Funding Sources/Partners Denali Commission Funding: Design - $50,000; Construction - $1,716,451 Other Funding: Indian Health Service Equipment - $305,303; Community Development Block Grant - $196,479 Total Project Funding: $2,268,233 Status: Planning Complete, Construction in Progress Project Overview New community clinic Project Title: Napaskiak Clinic Design and Construction Program: Health Care: Primary Care Community: Napaskiak Recipient Org.: Alaska Native Tribal Health Consortium Funding Sources/Partners Denali Commission Funding: Design - $51,400 Construction - $932,321 Other Funding: Indian Health Service Equipment - $193,688; Community Development Block Grant - $259,434; YKHC - $60,961 Total Project Funding: $1,451,544 Status: Project Close Out Project Overview New community clinic Bethel, Kwethluk and Napaskiak Health Projects Evaluation Denali Commission funded health projects are not central to Bethel’s needs because the city is the headquarters for Yukon Kuskokwim Health Corporation and home to the YKHC hospital. Napaskiak’s new clinic is fully operational. At the time of the site visit, there were half a dozen residents waiting to be seen in the clean, modern facility. The community is especially enthusiastic about the overnight accommodations and examining rooms that will allow dentists and other specialists to provide services. They are also proud of the fact that local labor did nearly all the construction. The new clinic in Kwethluk is nearing completion, but residents are concerned that it will not be able to open because of delays in water and sewer provision. They said twelve local employees were getting credit toward certification while working on the construction. Tundra Women’s Coalition in Bethel noted that, “Subregional clinics are a huge improvement that trickles down to us. We get better care and intervention with more highly trained people out in the field making referrals.” A contact at Lower Kuskokwim School District (LKSD) noted that regional and village clinics have resulted in better services for children, which, in turn, has made them more ready to learn. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 43 APPENDIX 2 Bethel, Kwethluk and Napaskiak Energy Program Projects Overview Project Title: Napaskiak Bulk Fuel Facility Project ID: 340114 Program: Energy: Bulk Fuel Community: Napaskiak Recipient Org.: Alaska Energy Authority Funding Sources/ Partners Denali Commission Funding: $310,683 Other Funding: Local match - $498,000; DEC RSA - $8,162; State of Alaska - $563,673 Total Project Funding: $1,380,519 Status: Project close-out Project Overview New bulk fuel facility Project Title: Kwethluk Bulk Fuel Facility Project ID: 340244 Program: Energy: Bulk Fuel Community: Kwethluk Recipient Org.: Alaska Energy Authority Funding Sources/Partners Denali Commission Funding: $4,435,130 Other Funding: 0 Total Project Funding: $4,435,130 Status: Construction complete Project Overview New bulk fuel facility Project Title: Kwethluk Rural Power System Upgrade (RPSU) - Conceptual Planning Project ID: 350278 Program: Energy: Bulk Fuel Community: Kwethluk Recipient Org.: Alaska Energy Authority Funding Sources/ Partners Denali Commission Funding: $95,000 Other Funding: 0 Total Project Funding: $95,000 Status: Conceptual planning Project Overview Replacement of existing non-code-compliant powerhouse with a new building and four new generators, including remote monitoring capabilities. Bethel, Kwethluk and Napaskiak Energy Projects Evaluation The tank farm projects have been critical for the school district. LKSD said it would not have been able to bring all its individual fuel storage facilities into compliance with Coast Guard requirements. Many of the old tanks were inherited from BIA installations. The district believes that there have been fewer fuel spills as a result of the projects. The district also notes that bulk purchases can reduce costs, but that villages can’t always afford to fill the new tanks. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 44 APPENDIX 2 When LKSD participates in a tank farm project, it wants a cell of dedicated tankage of its own. Then overall maintenance is shared among all the users of the tank farm. Kwethluk residents are hoping that the RPSU currently being planned will include using waste heat for the school and a community building. Napaskiak’s bulk fuel facility is operated by the tribe — as is the gas station -- and appears to be well maintained and well used. The local utility is operated by the City and is in need of upgrading, according to the utility board. The utility buys fuel from the tribe. At the time of the site visit, only one of three generators was working and a technician from AEA was expected soon to repair one of the others. AEA subsequently determined that the third generator is not repairable. The Napaskiak utility board was uncertain about how to proceed with requests for a generator upgrade. They said they needed assistance with the process. They are also concerned about residents who are behind in their utility payments. Napaskiak is also interested in wind power. Bethel, Kwethluk and Napaskiak Other Projects Overview Other Projects: Infrastructure Bethel — Yuut Elitnaurviat (People’s Learning Center) Denali Commission funded $1 million of this $16 million regional training center project. Other funders include the BIA ($2 million), Paul G. Allen Foundation ($100,000), Rasmusson Foundation ($2 million), University of Alaska ($500,000), USDA Rural Development ($2 million), State of Alaska (various programs - $2.9 million), a local match of $1.7 million, and various other funding. The center is partly operational. Bethel — Licensed Assisted Living Facility Denali Commission has approved a pass-through grant of $8,336,424 to YKHC for future construction of an assisted living facility in Bethel. The funding is part of a $24 million award to ANTHC that covers 35 projects. Bethel — River Bank Stabilization The project is not yet in construction. It will include construction of a dock face and associated uplands to complete the Bethel waterfront system. The project fills a gap in the waterfront that limits shipping operations and encourages erosion. Denali Commission funding is $570,000. The City of Bethel will contribute $200,000 and the Corps of Engineers $4 million. Napaskiak — Washeteria Denali Commission contributed $1,025,000 to a new washeteria with a total cost of $2,791,500. Other funding included $300,000 in local match and $1,466,500 through Village Safe Water. The washeteria was the final component in a comprehensive water and sewer upgrade of the village. Other components — partly funded through ANTHC — included upgrades to the primary water treatment plant and flush-and hall system, and a new sewage lagoon with boardwalk access as well as a secondary water treatment plant to serve the washeteria. The secondary water treatment and washeteria are located at the opposite end of the village from the primary watering point, making potable water more accessible to residents in that part of the village. The washeteria was nearly ready to open at the time of the site visit, February 8, 2007. The tribe will manage the facility and will need to price services competitively, to some extent. In the past, residents have taken laundry to Bethel. Denali Commission Program and Policy Review McDowell Group, Inc. * Page 45 APPENDIX 2 Kwethluk — Community Building The city received a $100,000 grant in 2002 and another $25,000 through First Alaskans Institute to complete construction of a $1 million community building that was principally funded through other sources (HUD). Contractor problems, weather delays, local flooding and problems with electrical hook-ups led to cost over-runs. The building was substantially damaged by fire in 2006. Other Projects: Training Grants Six training programs have been funded in Bethel. Two are Alaska Works Partnership (AWP) Youth Initiative Programs that draw construction trainees from communities around the state, including King Salmon, Saint Mary’s, Bristol Bay and Prince of Wales Island. One program is in progress and the other complete. Total Commission funding was $240,000. Matching funds of $60,000 were provided by ADOLWD Two other training programs were by Alaska Works Partnership in conjunction with the Association of Village Council Presidents. These funded Building Maintenance and Repair training. Both programs are complete. Total Denali Commission funds were $230,000 with matching funds from AWP of $66,728. Two programs funded Construction Trade Apprenticeship training through Yuut Elitnaurviat (YE). One program is complete, the other pending. Total Denali Commission funding was $256,089, with matching funding from YE of $61,640. Other Projects: Domestic Violence Four grants have been awarded to the Tundra Women’s Coalition, a family violence shelter in Bethel: $91,406 was awarded for safety and other upgrades to an aging facility in 2004 through the Council on Domestic Violence and Sexual Assault. In 2006, $300,000 was awarded for planning and design of an expanded facility, $195,000 for land acquisition and pre-construction planning. The fourth grant was for $59,077 with $25,716 in matching funds for an equipment purchase. A cooperative project agreement was signed in October 2006 to design either a renovation or a new facility, with ANTHC as the construction managers, and DHSS Division of Environmental Health and Engineering. When land became available, a grant was arranged for its purchase. Construction has not yet begun. Other Projects: Teacher Housing Two teacher housing renovation projects were funded, 8 units in Kwethluk and 2 units in Napaskiak. In Kwethluk, Denali Commission funding was $117,781 with an equal amount provided by the Lower Kuskokwim School District. AVCP Regional Housing Authority performed the work, which is complete. In Napaskiak, the arrangement was identical, with $38,857 from Denali Commission and matching funds from AVCP Housing. That work is in progress. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 46 APPENDIX 2 Other Projects: Miscellaneous Three other smaller grants were made in Bethel. The City received $80,922 to purchase a baler for municipal solid waste handling in order to reduce the volume of waste entering the landfill. The City provided $3,767 in matching funds. Another grant, made through DCCED, funded a Community Strategic Development Plan ($29,965). The third grant ($18,060) was for design and installation of a winter trail-marking system for the surrounding region. The primary funder was DOT&PF (federal funds), which allocated $181,940. No expenditures have yet been made on that grant. A $30,000 grant was made to Kwethluk through DCCED for a multi-purpose facility business plan and feasibility study. Bethel, Kwethluk and Napaskiak Other Projects Evaluation Training The assessment did not look individually at all the other funded projects. However, one that stands out is Yuut Elitnaurviat (YE), a bold experiment designed to address regional training and employment needs through local initiative supported by a broad partnership. Bethel has both high unemployment and high job vacancy. The project will train regional residents to fill jobs that formerly required recruiting outside the region. Currently, the program is operating on a limited basis while awaiting completion of the remainder of its campus facilities. Active programs at the time of the site visit included: * Classes for high school students * Seasonal apprenticeships = Academies for beginning construction workers = Specialized training in autocad, building inspection, construction driving, etc. Management is planning a dental therapy program that they expect to be extremely active, in part because of the capacity of new (Denali Commission-funded) clinics to provide dental care. One aspect of the YE programs is that they don’t offer training per diems as an incentive to participate. “We are looking for people who want to work.” YE management reported that the Denali Commission has been responsive and very helpful throughout the long, complex process of putting the project together. According to a local official, the Denali Commission played a key role in getting YE off the ground by recognizing the limits of shipping people to distant places to receive training. Comments by residents in Kwethluk bear out the logic behind YE. Most of the training available to the village has been at Job Corps in Palmer or AVTEC in Seward, they say. Sometimes people can’t finish because there is too much travel. Kwethluk residents said training has increased village employment and helped to motivate village residents, with the effects felt beyond the specific project. They said residents of the village were best at experiential learning. They also said they need training for emergency response for flooding, oil spills, pandemic or some other calamity. Residents also say Kwethluk is a candidate for wind energy. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 47 APPENDIX 2 Teacher Housing LKSD believes that teacher housing and resulting continuity of staff are key to better village education outcomes. Further, they say housing improvements would not have happened without Commission funding. Prior to the Commission, the funding had to be pieced together as it became available, an inefficient process. The district notes that there used to be an “exodus” of teachers from the villages into Bethel. Reportedly, that is changing. Teachers often stay six to ten years in villages, compared to one or two in the past, according to LKSD. Residents of Kwethluk also emphasized the importance of teacher housing and ascribed much of their past turnover to housing that dates back to BIA days. In Napaskiak, when a tribal housing application to USDA became bogged down in paperwork, the tribe built one unit itself because they considered it very important for teacher retention. Domestic Violence A Bethel city official said the availability of space at Tundra Women’s Coalition and is so critical that it affects the number of local homicides. Further, expansion of the Tundra Women’s Coalition facility will not only result in safer and better services. It will provide additional revenue from a thrift store and some rental space. More importantly, it will help the Coalition to address a more and more challenging target population that consists of younger women, more dependent children and a wider range of issues. Consistency with Denali Commission Policies Sustainability Sustainability concerns vary across the wide range of projects. Yuut Elitnaurviat’s feasibility study identified multiple ongoing funding sources, including, for example the school district, the University of Alaska, and USDA Rural Development. Commitments from established funders like these suggests sustainability, however government funding is also subject to changes in political priorities. Tank farms are typically shared by multiple users that often include the local utility, the school, the local tribe, any local military installation, etc. This means that sustainability depends on all the participants upholding their commitments. LKSD reports some issues in regard to past participation in water and washeteria facilities where the school has been asked to take on expenses other users can’t cover. More generally, local schools have routinely covered the cost of extra maintenance and administrative work associated with community use of gyms and other school facilities. Some concern was expressed that sustainability concerns mean the most needy are not addressed. In the words of one informant, “VSW alw ays has sustainability in mind, so people continue to have health problems.” Finally, Kwethluk is subject to seasonal flooding and is experiencing river bank erosion that will soon threaten the school and other buildings. The erosion problem has been recognized, and some erosion control has been done by the state. The city has asked the Denali Commission to fund a more permanent solution, with LKSD providing additional funding. They say their proposal seemed to have been misplaced for a time, but that it is now under consideration. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 48 APPENDIX 2 Cost Containment According to one local informant, “There is some disconnect between what the Commission staff think is reasonable (construction) cost and what we think based on our sources.” Informants also noted that failing to provide health care in rural areas doesn’t save money, it just shifts costs to urban areas. Other Policies No issues were identified that pertain directly to the other Denali Commission policies. Key Site Visit Observations Without exception, informants believe that Denali Commission funding has had a positive impact on the health and wellbeing of local residents and moreover, that many of those impacts would not have been possible without the Commission. The role of the Commission as a facilitator and coordinator of government programs is also widely considered important and unique. Informants noted flexibility, thoughtfulness, and knowledge of Alaska as among the Commission’s strong points. The Commission’s funding process is seen as less burdensome and more responsive than that of other g government agencies. Many informants cited as an issue the distance between Anchorage and the villages, both in miles — which makes face-to-face meetings fairly rare -- and in perspective and awareness. Recurring themes were that the situation and needs in every community are unique and that strategies by all agencies to meet them effectively and efficiently should make heavier use of local and regional know ledge and experience. Meetings in the two villages -- though only 15 miles apart -- revealed very different approaches to local development, with one focused around joint meetings of the tribe, city and corporation and the other driven by a strong tribal organization, possibly to the exclusion of meaningful city participation. Residents of both villages reported that city-tribe relationships had gone through periods of considerable strain. If these villages are any indication, the capacity of organizations within the same community to understand and respond to the policies and requirements of the Commission vary widely. Meetings with two local non-profits in Bethel - Tundra Women’s Coalition and Yuut Elitaurviat - highlighted substantial differences in their challenges, capacities and areas of expertise as compared with the larger organizations that more typically implement Denali Commission projects. Both these smaller organizations are highly regarded in the community and considered to be very important to the region. Meetings with LKSD and YKHC identified program data that may help to demonstrate Denali Commission impacts. However, the site visit generally confirmed that numerical data on impacts is likely to be rare. Denali Commission Program and Policy Review McDowell Group, Inc. + Page 49 APPENDIX 2 Selected Informant Comments “There’s no one else like the Denali Commission, with the possible exception of the Rasmuson Foundation. They are down-to-earth and understand the realities of Alaska.” “The Commission has developed a knowledge base for rural Alaska that is valuable and needs to stick around.” “The Denali commission almost needs to assign someone to do hand-holding with someone in each village.” “The owners of rural clinics are the tribal councils. But less than five percent of rural tribes can put together a business plan that would satisfy the Denali Commission and HUD.” “Often the economic base simply isn’t there. Commercial fishermen make about $3,000 a year. Meanwhile youth tend to want commercial food, which is expensive.” “Tf you bring in amenities, you raise costs. Whose responsibility is it to sustain that?” “Every school is a multi-use facility, but they aren’t planned and funded that way.” “The Denali Commission needs to grow. It’s still in its infancy. It will need constant refinement, but the dream is to keep it different (from other agencies).” “Force account is critical. A contractor builds and leaves — doesn’t create a partnership that follows through to close-out the grant. They won’t do the extra administrative work.” “Rural Alaska understands urban Alaska ten times better than the other way around.” “Don’t expect the Denali Commission to make huge, visually measurable steps, but the small steps are important.” “At the village level, one person can make a huge difference.” “Tt makes sense (for the Denali Commission) to work with big, regional partners. They have the capacity. But you have to realize they work to their own incentives. So, there has to be goal alignment and resources do get siphoned off.” “The big organizations don’t necessarily have village interests at heart. For example, in the past, AVEC has put tanks where they want them, not necessarily where they are most needed. Hopefully, that is beginning to change.” “The Denali Commission needs to understand the dynamics of all the players in a village. Involve local communities from the beginning. “ “Villages tend to focus on residential needs. They don’t understand the role of “anchor tenants” (in making facilities sustainable).” “One teacher arrived, looked around, and left on the afternoon plane.” “The number of users is critical to support a water system. And, if you don’t have water, you need a clinic even more.” “(For our village) the Denali Commission is more available, responsive and knowledgeable than other agencies. AEA has also been responsive and understands what we are talking about.” “Developing a standardized, public set of village metrics would be an incredibly valuable use of resources.” Denali Commission Program and Policy Review McDowell Group, Inc. * Page 50 APPENDIX 2 “In the past we have been discouraged with the state and other federal agencies. Having the Denali Commission focus on rural communities has encouraged us.” “The Denali Commission has been decent to deal with. Not hard or easy, but flexible.” “One improvement the Commission could make when they fund construction for small non-profits is to allocate part of the award to hiring a construction manager to help with logistics. Non-profits don’t have the time, expertise or purchasing leverage to deal effectively with contractors.” “The Denali Commission is too short-staffed and the technical people for a particular project too far away geographically. It’s extremely costly, if we have to fly 6 people to Anchorage for a meeting.” “The Denali Commission is necessary. When you need it, it’s happening now. USDA is like pulling teeth and EDA (in Alaska) is even worse. Enormous paperwork and hoops. USDA is too rigid to be useful here.” Denali Commission Program and Policy Review McDowell Group, Inc. * Page 51 APPENDIX 2 APPENDIX 3: SCOPE OF WORK Denali Commission Program and Policy Review McDowell Group, Inc. + Page 1 APPENDIX 3 ONC-06-0003 SOLICITATION/CONTRACT/ORDER FOR COMMERCIAL ITEMS OFFEROR TO COMPLETE BLOCKS 12, 17, 23, 24 & 30 TPD-DNC-06-C-0001 | _See block 3t¢ BPD-DNC-06-Cl-0002 | 11 July 2006 i July 2006, eae EST Bureau of the Public Debt Division of Procurement 200 Third Street Avery 5F Attention: Jane Oney 304-480-7111 541611 Parkersburg WV 26101 $6.5 million S0KE (CO see screoue 4 ” ‘ AFe CEL.ER TD oe *6 ADMIN'S 7 BY Sate Denali Commission Bureau of the Public Debt 510 L Street, suite 410 Division of Procurement Anchorage AK 99501 200 Third Street Avery 5F Attention: Jane Oney 304-480-7111 Parkersburg WV 26101 MEi-ReT oF DF sin ao ta, PAYMENT WiLL EY ace li Group Inc Denali Commission McDowe'l PO Box 21009 510 L Street, suite 410 Juneau, AK 99802 Anchorage AK 99501 DUNS: 605217512 e-mail invoice to www.mcdowellgroup.net NMerriman@denali.gov iis SUEMIT INVOICE SHOWN iM ELOCK 12a SEE ADDE! S CEFFERENT SUCH ADOPESS iN CFFER ERVICES QUANTITY UNIT UNIT PRICE | SCHEDULE OF The purpose of this contract is to acquire services to perform a program and policy review of the Denali Commission covering | the past six years. Technical proposai dated August 7, 2006 is incorporated by reference. | NTE $ 233,300.00 DOR LOCAL PEPRODUCT ON DIT.Oh i= NOT USABLE 0002 \tWethodology Report & work plan {Draft due with proposal revised final due 10 days after Methodology meeting, include travel cost to Anchorage will not be paid separately), 5 Review commission records & develop sets of potential indicators to help evaluate each major area: 10° interview Commission Staff and selected representative of state programs, 10°>. Design surveys and develop interview protocols. !dentify any data needed form grantees or partners. Identify and data needed form grantees or partners. Identify survey populations and target interviews. Conduct media content analysis, 10°. Field grantee survey and conduct first round of grantee interviews. Conduct interviews with a sampie of community representatives form funded and untunded communities, 20°o. Analyze grantee survey results. Develop framework for case study comparisons. Identify locations and begin site visits. 10° Continue site visits and conduct brief survey of individuals who have received training through Denali Commission programs, 15%. Draft report, 10°%>. Final Presentation to the Commission, 10°. Travel cost for Fieldwork ,airfare and per diem, will be determined after award (do not price item, will be paid according to location of work in accordance with FTR, Travel cost with-in the state of Alaska will be reimbursed on this line item any travel from outside of Alaska needs to be reflected in the line item it is associated with.) Not to Exceed (NTE) dollars indicated. 18,330.00 18,330.00 18.300.00 36,660.00 18,330.00 27,495.00 18,330.00 18,330.00 $ 183.399.60 NTE $ 50,000.00 OVERNMENT RE 37 CHF oe NUMEL 10 UD » STANDARD FORM 1449 (nev. 3.2005) BACK omnst §2.212-4 CONTRACT TERMS AND CONDITIONS -- COMMERCIAL ITEMS (SEP 2005) a) Inspection Acceptance. The Contractor shall only tender for acceptance those items that conform to the requirements of this contract. The Government reserves the right to inspect or test any supplies or services that have been tendered for acceptance. The Government may require repair or replacement of nonconforming supplies or reperformance of nonconforming services at no increase in contract price. The Government must exercise its post acceptance rights (1) within a reasonable time after the defect was discovered or should have been discovered; and (2) before any substantial change occurs in the condition of the item, unless the change is due to the defect in the item (b) Assignment. The Contractor or its assignee may assign its rights to receive payment due as a result of performance of this contract to a bank, trust company, or other financing institution, including any Federal lending agency in accordance with the Assignment of Claims Act (31 U.S.C. 3727). However, when a third party makes payment (e.g., use of the Government wide commercial purchase card), the Contractor may not assign its rights to receive payment under this contract. (c) Changes. Changes in the terms and conditions of this contract may be made only by written agreement of the parties. (d) Disputes. This contract is subject to the Contract Disputes Act of 1978, as amended (41 U.S.C. 601-613). Failure of the parties to this contract to reach agreement on any request for equitable adjustment, claim, appeal or action arising under or relating to this contract shall be a dispute to be resolved in accordance with the clause at FAR 52.233-1, Disputes, which is incorporated herein by reference. The Contractor shail proceed diligently with performance of this contract, pending final resolution of any dispute arising under the contract. (e) Definitions. The clause at FAR 52.202-1, Definitions, is incorporated herein by reference. (f) Excusable delays. The Contractor shall be liable for default unless nonperformance is caused by an occurrence beyond the reasonable control of the Contractor and without its fault or negligence such as, acts of God or the public enemy, acts of the Government in either its sovereign or contractual capacity, fires. floods, epidemics, quarantine restrictions, strikes, unusually severe weather, and delays of common carriers. The Contractor shail notify the Contracting Officer in writing as soon as it is reasonably possible after the commencement of any excusable deiay, setting forth the full particulars in connection therewith, shall remedy such occurrence with ali reasonable dispatch, and shall promptly give written notice to the Contracting Officer of the cessation of such occurrence. aiiih) (g) Invoice. The Contractor shall submit an original invoice and three copies (or electronic invoice. if authorized,) to the address designated | the contract to receive invoices. An invoice must include-- (i) Name and address of the Contractor; (ii) Invoice date and number, +“ (iii) Contract number, contract line item number and, if applicable. the order number; (iv) Description, quantity, unit of measure, unit price and extended price of the items delivered; (v) Shipping number and date of shipment, including the bill of lading number and weight of shipment if shipped on Government bill of fading: (vi) Terms of any discount for prompt payment offered; (vii) Name and address of official to whom payment is to be sent; (viii) Name, title, and phone number of person to be notified in event of defective invoice; and (ix) Taxpayer Identification Number (TIN). The Contractor shall include its TIN only if required elsewhere in this contract. (x) Electronic funds transfer (EFT) banking information. (A) The Contractor shall include EFT banking information only if required elsewhere in this contract. (B) If EFT banking information is not required to be on the invoice, in order for the invoice to be a proper invoice, the Contractor shall have submitted correct EFT banking information in accordance with the applicable solicitation provision, contract clause (e.g., 52.232-33. Payment by Electronic Funds Transfer--Central Contractor Registration, or 52. 232-34. Payment by Electronic Funds Transfer--Other than Central Contractor Registration), or applicable agency procedures. t (C) EFT banking information is not required if the Government waived the requirement fo pay by ERT (2) Invoices will be handled in accordance with the Prompt Payment Act (31 U.S.C. 3903) and Office of + Management and Budget (OMB) prompt payment regulations at 5 CFR 1315 Semmens (hy Patent indemnity. The Contractor shall indemnify the Government and its officers, employees and agents against liability. including costs. for actua! or alleged direct or contribu infringement of. of inducement to infringe. any United States or foreign patent, trademark or copyright. arising out of the of this contract, provided the Contractor is reasonably notified of such claims and proceedings . (1) ite. ayment shall be made for items accepted by the Government that vations set forth in thi ct 2) Prompt payment. The Government will make payment in accordance with the Prompt Paymeni Act 31 U.S.C. 3903) and Office of Management and Budget (OMB) prompt pay regulations at 5 CFR 1315 (3) Electronic Funds Transfer (EFT). lf the Government makes payment by EFT. see 52.212-5/b) for the appropriate EFT clause (4) Discount. In connection with any discount offered for early payment, time shall bs computed from the date of the invoice. For the purpose of computing the discount earned, payment shail be considered to have been made on the date which appears on the payment check or the specified payment date if an electronic funds transfer payment is made. (5) Overpayments. If the Contractor becomes aware of a duplicate contract financing or invoice payment or that the Government has otherwise overpaid on a contract financing or invoice payment, the Contractor shall immediately notify the Contracting Officer and request instructions for disposition of the overpayment. (j) Risk of loss. Unless the contract specifically provides otherwise, risk of loss or damage to the supplies provided under this contract shall remain with the Contractor until, and shall pass to the Government upon: (1) Delivery of the supplies to a carrier. if transportation is f.o.b. origin; or (2) Delivery of the supplies to the Government at the destination specified in the contract. if transportation is f.0.b. destination. (k) Taxes. The contract price includes all applicable Federal. State, and local taxes and duties. (l) Termination for the Government's convenience. The Government reserves the right to terminate this contract, or any part hereof, for its sole convenience. In the event of such termination, the Contractor shall immediately stop all work hereunder and shall immediately cause any and all of its suppliers and subcontractors to cease work. Subject to the terms of this contract, the Contractor shall be paid a percentage of the contract price reflecting the percentage of the work performed prior to the notice of termination, plus reasonable charges the Contractor can demonstrate to the satisfaction of the Government using its standard record keeping system, have resulted from the termination. The Contractor shall not be required to comply with the cost accounting standards or contract cost principles for this purpose. This paragraph does not give the Government any right to audit the Contractor's records. The Contractor shall not be paid for any work performed or costs incurred which reasonably could have been avoided (m) Termination for cause. The Government may terminate this contract, or any part hereof, for cause in the event of any default by the Contractor, or if the Contractor fails to comply with any contract terms and conditions, or fails to provide the Government, upon request, with adequate assurances of future performance. In the event of termination for cause, the Government shall not be liable to the Contractor for any amount for supplies or services not accepted, and the Contractor shall be liable to the Government for any and all rights and remedies provided by law. If it is determined that the Government improperly terminated this contract for default, such termination shall be deemed a termination for convenience. (n) Title. Unless specified elsewhere in this contract, title to items furnished under this contract shall pass to the Government upon acceptance, regardless of when or where the Government takes physical possession. (0) Warranty. The Contractor warrants and implies that the items delivered hereunder are merchantable and fit for use for the particular purpose described in this contract (p) Limitation of liability. Except as otherwise provided by an express warranty, the Contractor will not be liable to the Government for consequential damages resulting from any defect or deficiencies in accepted items. (q) Other compliances. Tne Contractor shall comply with all applicable Federal, State and local laws, executive orders, rules and regulations applicable to its performance under this contract. (r) Compliance with laws unique to Government contracts. The Contractor agrees to comply with 31 U.S.C. 1352 relating to limitations on the use of appropriated funds to influence certain Federal contracts; 18 U.S.C. 431 relating to officials not to benefit: 40 U.S.C. 3701, et seq., Contract Work Hours and Safety Standards Act; 41 U.S.C. 51-58, Anti-Kickback Act of 1986; 41 U.S.C. 265 and 10 U.S.C. 2409 related to whistleblower protections; 49 U.S.C 40118, Fly American; and 41 U.S.C. relating to procurement integrity. (s) Order of precedence. Any inconsistencies in this solicitation or contract shall be resoived by giving precedence in the following order: (1) the schedule of supplies ’services; (2) the Assignments. Disputes. Payments, Invoice, Other Compliances, and Compliance with Laws Unique to Government Contracts paragraphs of this clause; (3) the clause at 52.212-5; (4) addenda to this solicitation or contract. including any license agreements for computer software; (5) solicitation provisions if this is a solicitation: (6) other paragrapns of this clause: (7) the Standard Form 1449: (8) other documents, exhibits, and attachments: and (9} the specification. {t} Centra! Contractor Registration (CCR). i1; Uniess exempted by an addendum to this contract the Contract responsible during performance and through final payment of any contract for the accuracy and completeness of the data within the CCR database. and for any liability resulting from the Government's reliance on inaccurate or incomplete data To remain registered in the CCR equired to review and upda nan annual updates its information in the CCR database te ensure it is current, accurate and complete. Updating information in the CCR does not alter the terms and conditions of this contract and is not a substitute for a properly executed contractual document (2)i) If a Contractor has legally changed its business name, ‘doing business as" name. or division name (whichever is shown on the contract), or has transferred the assets used in performing the contract. but has not completed the necessary requirements regarding novation and change-of- name agreements in FAR Subpart 42.12, the Contractor shall provide the responsible Contracting Officer a minimum of one business day's written notification of its intention to (A) change the name in the CCR database; (B) comply with the requirements of Subpart 42.12; and (C) agree in writing to the timeline and procedures specified by the responsible Contracting Officer. The Contractor must provide with the notification sufficient documentation to support the legally changed name. (ii) if the Contractor fails to comply with the requirements of paragraph (t)(2}(i) of this clause, or fails to perform the agreement at paragraph (t)(2)(i)(C) of this clause, and, in the absence of a properly executed novation or change-of-name agreement, the CCR information that shows the Contractor to be other than the Contractor indicated in the contract will be considered to be incorrect information within the meaning of the "Suspension of Payment" paragraph of the electronic funds transfer (EFT) clause of this contract (3) The Contractor shall not change the name or address for EFT payments or manual payments, as appropriate, in the CCR record to reflect an assignee for the purpose of assignment of claims (see Subpart 32.8, Assignment of Claims). Assignees shall be separately registered in the CCR database. Information provided to the Contractor's CCR record that indicates payments, including those made by EFT, to an ultimate recipient other than that Contractor will be considered to be incorrect information within the meaning of the "Suspension of payment" paragraph of the EFT clause of this contract. (4) Offerors and Contractors may obtain information on registration and annual confirmation requirements via the internet at http:/www.ccr.gov or by calling 1-888-227-2423 or 269-961-5757. ADDENDUM TO 82.212-4, CONTRACT TERMS AND CONDITIONS -- COMMERCIAL ITEMS (SEP 2005) In accordance with 52.212-4 section (g) Invoice: Invoices shall be submitted electronically, and paper. Protected Microsoft Excel files are the preferred format; however, Adobe Acrobat Portable Document Format (PDF) and Microsoft Word are also acceptable. The e-mail address will be provided.at contract award. Invoicing shall be no more than monthly. Please submit invoices NMerriman @denali.gov Confidentiality of Data Due to the sensitivity and confidentiality of much of the data handled by the Commission, the Contractor will maintain confidentiality of al! documents, data, and other information supplied to it by Commission, in accordance with all applicable Federal guidelines and regulations. The Contractor agrees, in the performance of this contract, to keep all information obtained or otherwise reviewed as a result of this contract in the strictest of confidence. The Contractor acquires no possessory and no proprietary interests in such information. The Contractor agrees not to disclose any information concerning the work under this contract to any persons or entities unless prior written approval is obtained from the Contracting Officer. The Contractor agrees not to publish, reproduce, or otherwise divulge such information in whole or in part, in any manner or form, at any time, during or following contract performance, nor to authorize or permit others to do so. The Contractor agrees to take such reasonable measures as are necessary to restrict access to such information to those employees of the Contractor needing such information to perform the work provided on this order, on a “need to know" basis. The Contractor agrees to immediately notify the COTR in the event that he or she determines or has reason to suspect a breach of any of these requirements or restrictions, and to provide written notification as soon as possibie. Confidentiality is essential to satisfactory performance. The Contractor shall prevent any person other than the Contractor's team members for other person for whom access is necessary for the completion of the contract) from seeing or having access to information in the possession or under the contro! of the Contractor. The Contractor shall prevent any person from disclosing the contents or description of documents, data. or information to any person not authorized under this contract or by the Commission to have access to such documents or information. The Contractor shall prevent removai of any documents, data. or information from the Contractor's premises without authorization by appropriate Commission officials. All employees shall be uncial Statement audit Conditional access to sensitive but unclassified ment as shown in the solicitation reauired te fili out and returr information non-disciosure ¢ Conflict of Interest The Contractor shali disclose in its proposal the identity of all contracts. ongoing and completed during the past three years, with the Commission or any component. The Contractor shall provide the Contracting Officer with additional information concerning the work performed under specific contracts to the extent the Contracting Officer needs such additional information to make a determination of conflict of interest If the Contractor is deemed not independent or not objective with respect to the Commission. the Contractor will not be eligible for this contract .Piease fill out and return declaration of independence and conflict of interest statement with proposai. 52.204-9 PERSONAL IDENTITY VERIFICATION OF CONTRACTOR PERSONNEL (JAN 2006) Homeland Security Presidential Directive 12 —- Clause mandated by the Department of the Treasury Acquisition Bulletin (AB) No. 05-12 - October 26, 2005 (a) The Contractor shal! comply with Treasury and Bureau Personal Identity Verification Processes (PIV). that implements Homeland Security Presidential Directive 12 (HSPD-12), Office of Management and Budget (OMB) guidance M-05-24, and Federal Information Processing Standard (FIPS) 201. (b) The Contractor shall insert this provision in all subcontracts when the subcontractor is required to have physical access to a Federally controlled facility or access to a Federal information system. The Bureau of Public Debt Addendum to AB No. 05-12 Contractor Personnel Security and Suitability Requirements Performance of this contract requires contractor personnel to have a Federal government-issued personal identification card before being allowed unsupervised access to a government facility and/or information system. The Contracting Officer's Technical Representative (COTR) will be the sponsoring official, and wiil make the arrangements for personal identity verification and card issuance At least two weeks before start of contract performance, the Contractor will identify ail contractor and subcontractor personne! who will require physical and/or logical access for performance of work under this contract. The Contractor must make their personnel available at the place and time specified by the COTR in order to initiate screening and background investigations. The following forms, or their equivalent, will be used to initiate the credentialing process: ovforms‘html’sf.asp) * OPM Standard Form 85 or 85P (fillable forms available at http:\w e¢ OF 306 (fillable forms avaiiable at http. www.opm.goy forms’himl-of e Fingerprint card (local procedures may require the fingerprinting to be done at a police station; in this case, any charges are to be born by the contractor) « Release to Obtain Credit Information * Personal identity Verification (PIV) card application (for more information see http: ‘osro nist. go ect) Contractor employees are required to give, and to authorize others to give. full, frank, and truthful answers to relevant and material questions needed to reach a suitability determination. Refusal or failure to furnish or authorize provision of information may constitute grounds for denial or revocation of credentials. Government personnel may contact the contractor personnel being screened or investigated in person, by telephone or in writing. and the Contractor agrees to make them available for such contact. Alternatively, if an individua! has already been credentialed by another agency through OPM. and that credential has not yet expired. further investigation may not be necessary. Provide the COTR with documentation that supports the individual's status as} During performance of the contract. the Contractor will keep the COTR apprised of changes in personnel to ensuré that performance is not delayed by c h credentialing processes Cards that have been ust be repo and —— Otice with ours. Replacemen if reis rdinated thro eiSsu ployee is no longer working under this contraci ractor S returned to the COTR 6 Before starting work under this contract. a National Agency Check (NAC) will be conducted to verify the identity of the individual applying for clearance. Upon successful completion of the NAC process. an identification card will be issued and access granted. Simultaneously. a NAC with Inquiries (NACI) will be initiated to determine the individual's suitability for the position. If the NACI adjudication is favorable, nothing more needs to be done if the adjudication is unfavorable. the credentials will be revoked. in the event of a disagreement between the Contractor and the Government concerning the suitability of an individua! to perform work under this contract. the Government shall have the right of final determination This requirement must be incorporated into any subcontracts that require subcontractor personne! to have regular and routine unsupervised physical access to a Federally controlled facility for six (6) months or more. or any unsupervised logical access to a Federally controlled Level 3 or 4 information system. Physical Access: is the ability to enter a federally owned facility or federally leased space: ¢ If federal space is limited to a portion of a building then HSPD-12 applies only to that portion owned or leased by the federal government « Physical access requirements do not apply to: Contractors needing access for less than six (6) months Guest researchers c Volunteers © Intermittent, temporary or seasonal contractors * Contractors, as of October 27, 2005, will be subject to HSPD-12 requirements Logical Access: ability to access federal Level 3 or 4 IT systems or databases — applies to everyone regardiess of how long access is required and whether within a federal facility or by remote connectivity Additional! information regarding HSPD-12 can be located by clicking on the following link http: are. publicdebt.treas gov files‘pdffsbodapplicanttrainmodiinal pdf 1052.201-70 CONTRACTING OFFICER'S TECHNICAL REPRESENTATIVE (COTR) APPOINTMENT AND AUTHORITY (APR 2004) (DEVIATION) (DTAR) a. The Contracting Officer's Technical Representative(s) is Nancy Merriman. b. Performance of work under this contract must be subject to the technical direction of the COTR identified above, or a representative designated in writing. The term “technical direction” includes, without limitation, direction to the contractor that directs or redirects the labor effort, shifts the work between work areas or locations, fills in details and otherwise serves to ensure that tasks outlined in the work statement are accomplished satisfactorily. c. Technical direction must be within the scope of the specification(s)/work statement. The COTR does not have authority to issue technical direction that: 1. constitutes a change of assignment or additional work outside the specification(s)/work statement; 2. constitutes a change as defined in the clause titled “Changes”; 3. in any manner causes an increase or decrease in the contract price, or the time required for contract performance; 4. changes any of the terms, conditions, or specification(s)/work statement of the contract: 5. interferes with the Contractor's right to perform under the terms and conditions of the contract: or 6. directs, supervises or otherwise controis the actions of the contractor's employees. d. Technical direction may be oral or in writing. The COTR shall confirm oral direction in writing within five workdays, with a copy to the contracting officer. e. The contractor shall proceed promptly with performance resulting from the technical direction issued by the COTR. ff, in the opinion of the contractor, any direction of the COTR. or his/her designee. falls within the limitations in (c) above. the contractor shall immediately notify the contracting officer no later than the beginning of the next Government work day. f. Failure of the contractor and the contracting officer to agree that technical direction is contract shall be subject to the terms of the clause titled “Disputes.” D hin the scope of the a OPTION TO EXTEND THE TERM OF THE CONTRACT (MAR 2600) otice to the Contr s the Contr: notice of its intent to extend at least 30 days before the contract expires. The preliminary notice does not commit the Government to an extension ib} If the Government exercises this option, the extended contract shall be considered to include this option clause (c) The total duration of this contract. including the exercise of any options under this clause, shall not exceed one year. CONTRACT TERM This contract consists of a base period of 7 Months from date of award on page 1 of SF 1449 Block 31c. PAST PERFORMANCE EVALUATION This contract is subject to a performance evaluation. Following the end of each contract period and at contract completion, a completed Government evaluation shall be forwarded to the Contractor. The Contractor may submit written comments, if any, within the time period specified in the evaluation transmittal. The Contractor's comments shall be considered in the issuance of the final evaluation document. Any disagreement between the parties regarding the evaluation shall be forwarded to the Bureau Chief Procurement Officer (BCPO). The final evaluation of the Contractor's performance is the decision of the BCPO. A copy of the final performance evaluation report will be sent to the Contractor and to the Government's past performance database at www.ppirs.gov. oo §2.212-5 CONTRACT TERMS AND CONDITIONS REQUIRED TO IMPLEMENT STATUTES OR EXECUTIVE ORDERS — COMMERCIAL ITEMS (APR 2006) 1a) The Contractor shall comply with the following Federal Acquisition Regulation FAR) clauses, which are incorporated in this contract by reference. to implement provisions of law or Executive orders applicable to acquisitions of commercial items (1) 52.233-3. Protest After Award (AuG 1996) (31 U.S.C. 3553}. (2) 52.233-4, Applicable Law for Breach of Contract Ciaim (OcT 2004} (Pub. L. 108-77, 108-78) (b) The Contractor shall comply with the FAR clauses in this paragraph (b) that the Contracting Officer has indicated as being incorporated in this contract by reference to impiement provisions of law or Executive orders applicable to acquisitions of commercial items: X (1) 52.203-6, Restrictions on Subcontractor Sales to the Government (Jul 1995). with Alternate | (Oct 1995) (41 U.S.C. 253g and 10 U.S.C. 2402). __ (2) 52.219-3, Notice of Total HUBZone Set-Aside (Jan 1999) (15 U.S.C. 657a). __ (3) 52.219-4, Notice of Price Evaluation Preference for HUBZone Small Business Concerns {JULY 2005) (if the offeror elects to waive the preference, it shall so indicate in its offer) (15 U.S.C. 657a) ___ (4) [Reserved] X (5)(i) 52.219-6, Notice of Total Small Business Set-Aside (June 2003) (15 U.S.C. 644). __ (ii) Alternate | (Oct 1995) of 52.219-6. __ (iii) Alternate II (Mar 2004) of 52.219-6. __ (6){i) 52.219-7, Notice of Partial Small Business Set-Aside (June 2003) (15 U.S.C. 644). __ (ii) Alternate | (Oct 1995) of 52.219-7. __ (iii) Alternate Il (Mar 2004) of 52.219-7. a (7) 52.219-8, Utilization of Small Business Concerns (May 2004) (15 U.S.C. 637(d)(2) and (3)). ___ (8){i) 52.219-9, Small Business Subcontracting Plan (July 2005) (15 U.S.C. 637(d)(4). __ (ii) Alternate | (Oct 2001) of 52.219-9. __ (iii) Alternate 1! (Oct 2001) of 52.219-9. X (9) 52.219-14, Limitations on Subcontracting (Dec 1996) (15 U.S.C. 637(a)(14)). __ (10){i) 52.219-23, Notice of Price Evaluation Adjustment for Smali Disadvantaged Business Concerns (SEPT 2005) (10 U.S.C. 2323) (if the offeror elects to waive the adjustment, it shall so indicate in its offer). ___ (ii) Alternate | (June 2003) of 52.219-23. __ (11) 52.219-25, Small Disadvantaged Business Participation Program—Disadvantaged Status and Reporting (Oct 1999) (Pub. L. 103-355, section 7102, and 10 U.S.C. 2323). __ (12) 52.219-26, Small Disadvantaged Business Participation Program—tincentive Subcontracting (Oct 2000) (Pub. L. 103-355, section 7102, and 10 U.S.C. 2323). __ (13) 52.219-27. Notice of Totai Service-Disabled Veteran-Owned Small Business Set-Aside (May 2004). X (14) 52.222-3, Convict Labor (June 2003) (E.O. 11755). X (15) 52.222-19, Chiid Labor—Cooperation with Authorities and Remedies (Jan 2006) (E.O. 13126). X (16) 52.222-21, Prohibition of Segregated Facilities (Feb 1999). X (17) 52.222-26, Equal Opportunity (Apr 2002) (E.O. 11246). X (18) 52.222-35, Equal Opportunity for Special Disabied Veterans. Veterans of the Vietnam Era, and Other Eligible Veterans (Dec 2001) (38 U.S.C. 4212). X (19) 52.222-36, Affirmative Action for Workers with Disabilities (Jun 1998) (29 U.S.C. 793). X (20) 52.222-37, Employment Reports on Special Disabled Veterans, Veterans of the Vietnam Era, and Other Eligible Veterans (Dec 2001) (38 U.S.C. 4212} X (21) 52.222-39, Notification of Empioyee Rights Concerning Payment of Union Dues or Fees (Dec 2004) (E.0. 13201) __ (22){i) 52.223-9, Estimate of Percentage of Recovered Material Content for EPA-Designated Products (Aug 2000} (42 U.S.C. 6962(c})(3)(A)(ii)). __ (ii) Alternate | (Aug 2000) of 52.223-9 (42 U.S.C. 69621i}(12)(C1). __ (23) 52.225-1, Buy American Act—Supplies (June 2003) (41 U.S.C. 10a-10d) __ (24)(i) 52.225-3, Buy American Act—Free Trade Agreements—lIsraeti Trade Act (Afr 2006) (41 U.S.C. 10a-10d, 19 U.S.C. 3301 note, 19 U.S.C. 2112 note, Pub. L. 108-77, 108-78, 108-286) } Alternate | (Jan 2004) of 52.225-3. _ i) Alter 14) of 52.225-3 (25) 52.22: Agreements {Apr 2006 X (261 52.2 1 estrictions on Certain Fore statutes administ (28) (Reserved? __ (29) 52.232-29. Terms for Financing of Purchases of Corr (447 U.S.C. 255(f}. 10 U.S.C. 23071f)). (30) 52.232-30. Instaizment Payments for Commercial items «Oct 1995) (44 t 10.U.S.C. 2307(11) X (31) 52.232-33. Payment by Electronic Funds Transfer—Central Contractor Registration (Oct 2003) (31 U.S.C. 3332} (32) 52.232-34, Payment by Electronic Funds Transfer—Oiher than Central Contractor Registration (May 1999) (31 U.S.C. 3332) __ (33) 52.232-36, Payment by Third Party (May 1999) (31 U.S.C. 3332) __ (34) 52.239-1, Privacy or Security Safeguards (Aug 1996) (5 U.S.C. 552a). _ (35)(i) 52.247-64, Preference for Privately Owned U.S.-Flag Commercial Vessels (Feb 2006) (46 U.S.C. Appx. 1241(b) and 10 U.S.C. 2631) ___ (ii) Alternate i (Apr 2003) of 52.247-64. (c) The Contractor shall comply with the FAR clauses in this paragraph (c), applicable to commercial services, that the Contracting Officer has indicated as being incorporated in this contract by reference to implement provisions of law or Executive orders applicable to acquisitions of commercial items: ___ (1) 52.222-41, Service Contract Act of 1965. as Amended (July 2005) (41 U.S.C. 351, et seq.). __ (2) 52.222-42, Statement of Equivalent Rates for Federal Hires (May 1989) (29 U.S.C. 206 and 41 U.S.C. 351, et seq.). __ (3) 52.222-43, Fair Labor Standards Act and Service Contract Act—Price Adjustment (Multiple Year and Option Contracts) (May 1989) (29 U.S.C. 206 and 41 U.S.C. 351, ef seg.). ___ (4) 52.222-44, Fair Labor Standards Act and Service Contract Act—Price Adjustment (Feb 2002) (29 U.S.C. 206 and 41 U.S.C. 351, et seq.). __ (5) 52.222-47, SCA Minimum Wages and Fringe Benefits Applicable to Successor Contract Pursuant to Predecessor Contractor Collective Bargaining Agreements (CBA) (May 1989) (41 U.S.C. 351, et seq.). (d) Comptroller Genera! Examination of Record. The Contractor shall comply with the provisions of this paragraph (d) if this contract was awarded using other than sealed bid, is in excess of the simplified acquisition threshold, and does not contain the clause at 52.215-2, Audit and Records—Negotiation. (1) The Comptroller General of the United States, or an authorized representative of the Comptroller General, shall have access to and right to examine any of the Contractor's directly pertinent records involving transactions related to this contract. (2) The Contractor shall make available at its offices at all reasonable times the records, materials, and other evidence for examination, audit, or reproduction, until 3 years after final payment under this contract or for any shorter period specified in FAR Subpart 4.7, Contractor Records Retention. of the other clauses of this contract. If this contract is completely or partially terminated, the records relating to the work terminated shall be made available for 3 years after any resulting final termination settlement. Records reiating to appeals under the disputes clause or to litigation or the settlement of claims arising under or relating to this contract shall be made available until such appeals, litigation, or claims are finally resolved. (3) As used in this clause, records include books, documents, accounting procedures and practices, and other data, regardiess of type and regardless of form. This does not require the Contractor to create or maintain any record that the Contractor does not maintain in the ordinary course of business or pursuant to a provision of law. (e)(1) Notwithstanding the requirements of the clauses in paragraphs (a), (b), (c), and (d) of this clause, the Contractor is not required to flow down any FAR clause, other than those in paragraphs (i) through (vii) of this paragraph in a subcontract for commercial items. Uniess otherwise indicated below, the extent of the flow down shall be as required by the clause— {i) 52.219-8, Utilization of Small Business Concerns (May 2004) (15 U.S.C. 637(d}(2) and (3)), in all subcontracts that offer further subcontracting opportunities. If the subcontract (except subcontracts to smal} business concerns) exceeds $500,000 ($1.000,600 for construction of any public facility). the subcontractor must include 52.219-8 in lower tier subcontracts that offer subcontracting opportunities (ii) 52.222-26, Equal Opportunity (Apr 2002) (E.0. 11246) fil) 62.222-35, Equal Opportunity for Special Disabled Veterans. Veterans of the Vietnam Era. and Other Eligible Veterans (Dec 2001) (38 U.S.C. 4212) -36. Affirmat tion for Workers with Di of Employee Rights Concern tract A = Contre o ivii} 52.247-64. Preference for Privately Owned U.S.-Fiag Commercial Vessels (Feb 2006) 146 U.S.C Appx. 1241(b) and 10 U.S C. 2631). Fiow down required in accordance with paragraph :d)} of FAR clause 52.247-64 (2) While not required the contractor may include in its subcontracts for commercial items a minimal numbe: of additional clauses necessary to satisfy its contractual obligations DENALi COMMISSION PROGRAM AND POLICY EVALUATION PERFORMANCE WORK STATEMENT A Background In 1998. Senator Ted Stevens focused national attention on the infrastructure and econemic challenges faced by rural Alaska communities with the passage of the Denali Commission Act. The Act was signed into law on ctober 21. 1998. becoming Title Ill of Public Law 105-277. 42 USC 3121 The Commission is an innovative tederal-state partnership designed to provide critical utilities, infrastructure and support for economic development in Alaska by delivering federai services in the most cost-effective manner possible. With the creation of the Commission, Congress acknowledged the need for increased inter- agency cooperation in addressing the unique infrastructure and economic challenges faced by America’s most remote communities. The Denali Commission Act of 1998, as amended (Division C, Title ill, PL 105-277) states that the purposes of the Denali Commission are: ¢ To deliver the services of the Federal Government in the most cost-effective manner practicable by reducing administrative and overhead costs. * To provide job training and other economic development services in rural communities, particularly distressed communities (many of which have a rate of unemployment that exceeds 502%). e¢ To promote rural development and provide power generation and transmission facilities, modern communication systems, bulk fuel storage tanks, water and sewer systems, and other infrastructure needs. The Denali Commission includes seven Commissioners: a Federai Co-Chair appointed by the Secretary of Commerce, a State Co-Chair who is the Governor of Alaska, and five additional members representing statewide, non-governmental organizations. The Commission is staffed by a small number of employees, augmented by additional personnel from partner organizations. The Commission relies upon a special network of Federal, State, Local, Tribal and other organizations to successfully advance its mission. The Commission members meet at least twice a year to develop and monitor annual work plans that guide activities. Commissioners draw upon community-based comprehensive plans as well as comments from individuals, organizations and partners to guide funding decisions. This approach helps provide basic services in the most cost-effective manner by moving the problem solving resources closer to the people best able to implement the solutions. Since beginning operations in 1999, the Denali Commission has invested over $700 million in support of over 1,200 projects throughout rural Alaska. Over 75% of Denali Commission projects have supported construction of infrastructure projects in rural Alaska such as bulk fuel facilities, power generation facilities, primary care facilities, and other basic community infrastructure projects. The Commission has also provided support in the areas of job training and economic development. The Commission has developed several policies that it believes positively impact the infrastructure projects and communities in which it invests, and the Commission gives preference to projects that meet the Commission's policies. As identified in its enabling legislation, the Commission also has the unique mission of Government Coordination, and uses cooperative partnerships with Federal, State and Local Governments along with Native and Non-Profit organizations to implement its mission. The Denali Commission uses the following Guiding Principles as factors in project funding criteria ¢ The Denali Commission will give priority to funding needs that are most Clearly a federal responsibility. e Denali Commission funds may supplement existing funding, but will not replace existing local. state federal government or | ¢ funding. « Denali Commission fund | not be used to create unfair competition with private « Projects must be sustainable. e The Denali Cor sion \ projects. but will its Missi e §=6Projects ts terprise ally not sé ot individual praye or funding nor mane individua! . Pry e Projects that provide substantial health and safety benefit, and or enhance traditional community es will generally receive priority r those that provide narrower benefits « Projects should have broad public involvement and support. Evidence of suppon might include endorsement by affected local government councils (Municipal. Tribal, IRA, etc.}, participation by tocai governments in pianning and overseeing work, and local cost sharing on an “ability to pay” basis « Priority will be generally given to projects with substantial cost sharing e Priority will generally be given to projects with a demonstrated commitment to loca! hire B. Contract Objectives The Commission is seeking contractoris) to conduct an independent review and analysis of the performance. impacts, and outcomes of its programs and policies over the last six years. Programs to be reviewed include: Energy, Health, Training, Government Coordination, Multi-Use Facilities, Washeterias, Solid Waste, Economic Development. Elder Housing, Teacher Housing, and Domestic Violence. Major Commission policies to be evaluated include: Sustainability, Private Enterprise, Cost Containment, Open Door, and Investment. Also included at the policy review level are the Commission's Business Plan and Community Pian requirements. In all areas of inquiry, the contractor(s) shall collect both statistical data, as well as perceptions of the impacts of the Commission's policies and programs from the people involved with or impacted by the Commission's programs and projects. The areas of inquiry to be included in the evaluation include the following: 1. Program: Determine the degree to which the grantee recipient of Commission funding and the beneficiary population achieved the objectives set forth in the project description of the grant agreement document, the bucinece nlan, and other nroiect documents: CoSiinons, che wecmooe Ser ee eee . Policy: Determine the | methodology for and degree to which Commission policies were considered and ees within each program evaluated, and the impacts, both expected and unexpected, of the implementation or iack of implementation of these policies. Identify key elements or factors that contribute or detract from successfui projects, such as; a. Characterize the relationship of a community's involvement in the pre-project development phase, including business planning and community planning, to successful project completion and implementation of Commission policies; b. Identify the degree to which Commission policies contributed or detracted from successful project completion, specific reasons or circumstances that caused this to occur, and recommendations for revisions or improvements to existing policies; 3. Performance Measurement: Assess the appropriateness and relevance of the performance indicators currently used to report on the progress of each program; 4. Change: Document the changes, expected and unexpected, at the individual, community, organization and regional levels that are directly or indirectly attributable to Commission programs and/or policies; 5. Reason for change: Identify the policies and other project implementation strategies that were employed to achieve the observed changes: 6. Process: Evaluate the effectiveness of the administrative processes for proposal submission, approval, administration, data verification and financial oversight of projects; 7. Appropriateness of project selection: Ascertain the degree to which each project responded to community needs and to an overall mission or goal of the Commission. Evaluation of Commission programs and policies require detailed analysis and a deep understanding of the unique nature and scope of the work of the Commission. Each program and policy shall have two distinct sets of results to be evaluated, requiring two distinct means of analysis. One set of results refers to the immediate, tangible results of program activities and policy implementation, as expressed in the project documentation. Of special interest in this respect is not only the achievement of these results but also their likelihood of sustainability over time The other set of results refers to the intangibie capacities of beneficiaries that will ultima and economic advanc over time. For the oe pol to Bev succeeded, t been strengthen ain after the pro pacity, community nfrastructure, health, ate ities may not have been m ade exp e of 4 project's life sit in the pr ng thes essential tc ascenaining the ae ing beth statistical data and human gible and intangible shall be enced at the individual project the Commission seeks analysis of the relationships and cause effect nd policies. Is all cases, the grantees and the beneficiaries themselves shail valuations t of programs and policies i Moreover. to ascertain the full im perceptions. both sets of results community and regional le relationships between progr be an important component o! these The use of these evaluations is twofold. First is to obtain an independent, external review of the performance and impacts of the Commission's programs and policies. And second. the independent evaluation of Commission programs and policies shall serve to inform the revision of the Commission's Strategic Plan which is occurring concurrently with this evaluation, and in future policy and program development. Cc. Methodology The selected contractor(s) shall produce a research design for evaluation of Commission programs and policies. The design shall respond to the guidelines described above in the contract objectives, and shal! be comparabie with similar research methodologies used for evaluation of publicly-funded programs and policies of similar nature and scope to the Commission. The contractor(s) shall review the Commission's project documentation (e.g. electronic and hard copy files. programmatic and financial reports, result reports, and field visits). The contractor(s) shall gather essential information through direct observation, interviews, focus sessions and/or surveys with beneficiaries, former grantees, program partners and DC staff. Data collection instruments, such as participant observation, interviews, focus sessions, questionnaires and other data collection methodologies shall contain key questions refiecting the objectives of the evaluation, and shall be reviewed and approved in advance by the Commission. Additional contextua! information about the community or region may be obtained from secondary sources. The contractor(s) may choose both quantitative and/or qualitative methodologies in the research process. Given the nature of DC supported projects. a mixed methodologica! approach is desirable. The contractor(s) shall outline, in brief, the proposed methodology and data collection as part of the proposal. Contractor(s), researchers and the Commission staff team shall convene at the start of the contract to further develop and finalize the methodology and specific areas of the evaluation, at midterm to discuss the evaluation progress and at the end to present final findings. In addition to selected staff, the Commission staff team may include representatives from partner organizations and other stakeholders as appropriate. The contractor(s) shall organize and facilitate the meetings in locations approved or selected by the Commission in Anchorage, AK. Details on the meetings shall be determined in discussions between the Commission and the selected contractor(s). D. Fieldwork These evaluations shal! involve fieldwork throughout Alaska for the purpose of interviewing and/or data collection. Organizations to be contacted include Commission grantee organizations, support organizations, community leaders, community organizations involved with or impacted by projects, and other appropriate stakeholders identified by the Commission. Other organizations could include project partners such as private sector firms, local governments, and tribal organizations. The communities and projects where fieldwork shall be conducted shall be approved in advance by the Commission based on the contractor(s) recommendation after conducting preliminary research and/or based on staff or other stakeholder recommendations. Both the Commission and the contractor{s) shali consult jointly and negotiate any needed changes in projects or fieldwork. or(s) may conduct some work on-site at the Commission offices for the purpose of researching d interviewing staff. The contractor/s) will be provided electronic access to the Project Database database of ali Commission-funded projects. The cantractoris) shail ammission in advance The contr grant files ar System, the Commission's elec coordinate all on-site work with th in any of the field visits The Commission may choose to varticipate as an observer for Ee Schedule Jj data ntracterts) mated tha t Commission. The 2006 n months from the contract start date. By October 2006. it: d analysis shall be completed to provide an interim update to ent preliminary findings ai a meeting of the Commission in October The contractors) shall include a preliminary evaluation schedule as part of the proposal that details a proposed schedule for completion of the tasks listed in the Deliverables and Performance Requirements Summary F. Deliverables 1. Within 10 days of contract award, the contractor(s) shall meet with the Commission staff regarding the proposed evaluation schedule, fieldwork and methodology. 2. A finalized methodology report with instruments and measures (not to exceed 10 pages) shall be prepared by the contractor(s) and submitted 10 days after the evaluation schedule, fieldwork and methodology meeting. This report shal! be provided to all researchers collaborating in the research project as well as to the Commission. 3. Bi-weekly reports charting the progress of the evaluation program shail be provided to the Commission. This report shall contain information about evaluations in preparation, in the field, and completed. In addition, any significant accomplishments and/or difficulties impeding the full completion of all contract deliverables within the designed contract delivery schedule shall be included. The report shall be provided in software compatible with Microsoft Office and shall be submitted electronically. 4. Within 5 days of completion of each fieldwork visit, a preliminary (three page) evaluation report shall be submitted electronically to the Commission. 5. The contractor(s) shall be required to deliver an oral and/or PowerPoint presentation with preliminary findings at a meeting of the Commission to be held in Anchorage, AK on October 24” or 25", 2006. The presentation shall be approved in advance by the Commission, and a dress rehearsal of the presentation shali be delivered to Commission staff no later than one week in advance of the presentation. Itis expected that the lead researcher shall deliver this presentation. 6. Within 45 days after the compietion of all evaluations, a comprehensive final evaluation document containing the following shall be submitted: a) a specific evaluation report for each program and policy reviewed, b) an analysis report covering the whole body of evaluations, and c) technical documentation, appendices, and bibliography. a. Each individual program and policy evaluation report shall be of reasonable length, neither telegraphic nor epic in nature (not to exceed 20 pages). The reports shall clearly convey the thought and nature of preparatory work, the scope and nature of the fieldwork, and the analysis and results. The Commission requires a practical working paper like report grounded in the social science and development fields, not an obiique thesis filled with excessive footnoted citations and obscure theoretica! constructs. The Commission requires informative and useful reports refiective of the research areas and contract objectives found in the Performance Work Statement. The Commission further requires that the report contains several relevant charts, graphs and other visual displays that enhance both the readability of the report. and convey relevant information visually, instead of conveying research findings only through text. b. The analysis’synthesis portion of the final report which covers the whole body of the evaluations shall be reasonable in length (not to exceed 30 pages). Furthermore, the Commission requires balanced coverage of the evaluations in this section, and an overall synthesis of evaluation findings. and recommendations for possible changes to programs. policies. and periormance indicators. Like the individual reports. the analysis portion shall be dable, useful. and contain several relevant charts, graphs and other visual displays. not dense i requires an analysis synthe mand p ork efly the objectives of the programs and policies evaluated: the ‘dations and a. Executive Summary — Shali state purpose of the evaluation: evaluation r iessons learned b. Body of the Report ~ Shall contain an array of elements, which include the purpose of the evaluation, the socio-economic-politicai context of the project(s), team composition, methodology. and empirical findings. For program evaluations. the report shall also contain a performance measure evaluation. The report shall contain an evaluation of the degree to which Commission policies have influenced change. both expected and unexpected. within programs c. Conclusions — Shall detail the conclusions and recommendations based on the findings of the evaluation. d. Bibliography — Shall contain a fist of documents used and/or consulted for the evaluation process. e. Annexes (if appropriate) — Shall include the PWS. lists organization and individuals consulted, a glossary of terms, and other technicai documentation or treatments. 7. The contractor(s) shall be required to deliver a fina! oral and/or PowerPoint presentation that details findings and recommendations at a meeting of the Commission to be held at a date and time yet to be determined by the Commission. The meeting shall be held within the State of Alaska, potentially during the month of February 2007. The presentation shall be approved in advance by the Commission, anda dress rehearsal of the presentation shall be delivered to Commission staff no jater than one week in advance of the presentation. It is expected that the lead researcher shall deliver this presentation. iG Documentation Requirement All data collected shali be submitted to the Commission after processing and analysis and shail remain the property of the Commission. All reports that are a product of this work shall also remain the property of the Commission. An electronic data file with all data items and reports for each program and policy evaluated shall be compatible with Microsoft Office software already in use by the Commission. All data and information collected during the evaluations shall be regarded as confidential and shall not be teleased without prior written approval from the Commission. H. Quality Assurance Plan (QAP) The contractor(s) shall submit, along with its proposal, a QAP for this contract, which demonstrates how the designated performance quality standards on the following page shal! be met. The contractor(s) shall be responsible for ensuring that the work submitted is acceptable by the Commission which reserves the right to reject or not pay for any deliverable that, upon inspection, does not conform to the terms and conditions of this contract. For this reason, the contractor(s) shall adhere to this Performance Work Statement unless a departure is requested and approved by the Commission in writing. The Contracting Officer shall approve any change order requests or other requests that would result a in change of scope from the original terms of the contract. The contractor(s) shall comply with all due dates listed in the following table. In addition, the contractor(s) shall send ail required deliverables in electronic and “hard copy" (written) format, unless otherwise noted. The electronic copy shall be received by 5:00 p.m. AKST on the due date and the hard copy can arrive no later than 5 business days later END PERFORMANCE WORK STATEMENT PERFORMANCE REQUIREMENTS SUMMARY FOR PROGRAM AND POLICY EVALUATION 1 Desired ! Due Date Quality Standard Quality Acceptable | Incentives/Disincentives Outcomes (See Performance Work | Assurance | Quality | for Meeting or Not ‘ | Statement) Method Level (AQL) Meeting the Quality 1 Preliminary 25 Sept 2006 Meeting shall be in 100% 0°. deviation NA Evaluation accordance with Section inspection ' Schedule, F.1. Deliverables, and { Fieldwork and shall occur 10 days after | methodology award | 1_ meeting 1 i Methodology 10 days after Report shall be in 100% | 0% deviation If the report is delivered late " report methodology accordance with Section inspection or does not meet the quality i meeting F.2. Deliverables, and of the report standards, a 2% disincentive : delivered 10 days after the will be applied to evaluation ' | methodology meeting | award amount Bi-weekly Bi-weekly on Reports shall be in 100% One report may | N/A A progress reports Friday accordance with Section inspection be late during i F.3. Deliverables. and of the report | the contract delivered by 5:00pm AKST period ' on Friday | | ‘Fieldwork reports 5 days after Report shall be in 100% 0% deviation N/A : completion of accordance with Section inspection the fieldwork F.4. Deliverables and delivered 5 days after the completion of the fieldwork | of the report 6 + ¢ i Interim Oct 24" or 25", | Oral Presentation shall be 100% Dratt if the report is not delivered Presentation to the | 2006 in accordance with Section | inspection presentation in a timely manner or does 1 Commission F.5. Deliverables, and of the may be returned {| not meet the quality delivered on the specified presentation | once due to standards, a 2% disincentive date, at the time and non-compliance | will be applied to evaluation location specified by the with guidelines, | award amount Commission 0% deviation for presentation Final evaluation 45 days after Report shall be in 100°. Deliverable may | If the report does not meet " report evaluation accordance with Section inspection be returned the guidelines (with completion F.6. Deliverables and of the report | once due to allowance noted in AQL), the delivered 45 days after non-compliance | contractor(s) will be required evaluation completion with guidelines to reproduce the report at no | cost to the Commission ' Final Presentation | TBD Presentation shall be in 100% Draft If the presentation is not .o the Commission accordance with Section inspection presentation delivered in a timely manner F.7. Deliverables, and of the may be returned | or does not meet the quality shall be delivered on the presentation | once due to standards, a 2% disincentive specified date, at the time and location specified by the Commission non-compliance with guidelines, 0° deviation for resentation END PERFORMANCE WORK REQUIREMENTS will be applied to evaluation line item 0006 of the award amount FINANCIAL STATEMENT AUDIT CONDITIONAL ACCESS TO SENSITIVE BUT UNCLASSIFIED INFORMATION NON-DISCLOSURE AGREEMENT erms in this Agree onal nfermatio cor jassifi | understand and agree te the following terms and conditions: I By being granted conditional access to sensitive but unclassified information, the United States Government has placed special confidence and trust in me and | am obligated to protect this information from-unauthorized disclosure, in accordance with the terms of this Agreement. i As used in this Agreement, sensitive but unclassified information's any information loss, misuse, or unauthorized access to or modification of which could adversely affect the national interest or the conduct of Federal programs, or the privacy to which individuals are entitled under-Title 5 U.S.C. section 552a, but which has not been specifically authorized under criteria established by an Executive Order or an Act of Congress to be kept secret in the interest of national defense or foreign policy. th. | am being granted conditional access contingent upon my execution of this Agreement for the sole purpose of performing the Denali Commission program and policy review. This approval! will permit me conditional access to certain information, and/or to attend meetings in which such information is discussed or otherwise made available to me. This Agreement will not allow me access to materials which the Denali Commission has predetermined, in its sole discretion, is inappropriate for disclosure pursuant to this Agreement. This may include sensitive but unclassified information provided to Denali Commission by other agencies of the United States Government. IV. ! will never divulge any sensitive but unclassified information which is provided to me pursuant to this Agreement to anyone, unless | have been advised in writing by the Denali Commission that the individual is authorized to receive it. Should | desire to make use of any sensitive but unclassified information. | will do so in accordance with paragraph VI of this Agreement. | will submit to the Denali Commission for security review, prior to any submission for publication, any book, article, column or other written work for general publication that is based upon any knowledge | obtained during the course of my work on the Denali Commission program and policy review in order for the Denali Commission to ensure that no sensitive but unclassified information is disclosed. Vv. | hereby assign to the United States Government all royalties, remunerations, and emoluments that have resulted, will result or may result from any disclosure, publication, or revelation of sensitive but unclassified information not consistent with the terms of this Agreement. Vi. if | am permitted. at the sole discretion of the Denali Commission, to review any official documents containing sensitive but unclassified information, such review will be conducted at a secure facility or under circumstances which will maintain the security protection of such material. | will not be permitted to and will not make any copies of documents or parts of documents to which conditional access is granted to me. Any notes taken during the course of such access will remain at the Denali Commission, to be placed in secure storage unless it is determined by Denali Commission officials that the notes contain no sensitive but unclassified information. If! wish to have the notes released to me, Denali Commission officials will review the notes for the purposes of deleting any sensitive but unclassified information to create a redacted copy of the notes. If | do not wish a review of any notes that | make, those notes will remain in sealed and secure storage at the Denali Commission. Vil If | violate the terms and conditions of this Agreement, | understand that the unauthorized disclosure of sensitive but unclassified information could compromise the security of the Denali Commission. Viit '{ | violate the terms and conditions of this Agreement. such violation may result in the cancelation of my ni cess to sensitive but unclassified information. This may serve as a basis for denying me conditionai ali Commission information lassified and sensitive but unclassified information in the future. ff! rms and conditions of this Agreement, the United States may institute a civil action for damages or any opriat lief. The willful disclosure of informatior \ greed therein not to divulc a criminal offer ian from this Ag eni or any fof con Uniess anc of it. all beth during my £ 16 which snai all times thereafter. ac< at ny provision of this Agresment to be X. Each provision of this Agreement is severable. If a court should # unenforceable, all other provisions shail remain in full force and effec xt | understand that the United States Government may seek any remedy availapie to it to enforce this Agreement, including. but noi limited to application for a court order prohibiting disciosure of information in breach o inis Agreement sf xi By granting me conditional access to information in this context, the United States Government does not waive any statutory or common law evidentiary privileges or protections that it may assert in any administrative or court proceeding to protect any sensitive but unclassified information to which | have been given conditional access under the terms of this Agreement. Xi My execution of this Agreement shail not nuilify or effect in any manner any other secrecy or nondisclosure Agreement which | have executed or may execute with the United States Government. XIV. i make this Agreement in good faith, without mental reservation or purpose of evasion. Signature Date This agreement was accepted by the undersigned on behaif of the Denali Commission as a prior condition of conditiona! access to sensitive but unclassified information. Denali Commission Date 1g DECLARATION OF INDEPENDENCE AND CONFLICT OF INTEREST STATEMENT General For proper performance of Government business and te maintain tne independence ot the U.S. Denali Commission ihe Contractor shail certify that they ar t of any conflict of interest situations at the time the Denali Commission contract is awar nd agree o enter into any contract that will create or appear to create a of interest for the Denali Commission. conflict not Requirements The Contractor shall comply with the foliowing requirements: a. Sign this Declaration of Independence and Conflict of Interest Statement. Notify the Denali Commission of the identity of all contracts, current and completed during the past two years, with any Denali Commission program or component, and provide information concerning specific work performed, as requested by the Denali Commission. b. Notify the Denali Commission of any potential new contract with any Denali Commission program or component c. Comply with ail contract conflict of interest clauses, such as complying with Government Auditing Standards. 1994 revision, issued by the Comptroller General of the United States Exampies The following examples illustrate situations in which questions concerning conflict of interest may arise. These examples are not inclusive. . a. Employing a former employee of any Denali Commission program or component, who has information that enables the Contractor to gain an unfair competitive advantage. b. Any work associated with the Denali Commission either as a Contractor or an employee of the Contractor. Penalties If the Contractor fails to comply with the above requirements, it may be considered a material breach of contract subject to monetary penaity, termination for default, and other legal action, such as debarment from future Federal contracts. Certification | certify that i have read and fully understand the above information and what is required concerning conflict of interest. Signature of Engagement Partner, Shareholder or Proprietor Date