Legislature(1993 - 1994)
02/01/1993 09:00 AM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
SENATE BILL 50
Act making appropriations for capital projects;
and providing for an effective date.
FRANK TURPIN, Commissioner, Dept. of Transportation and
Public Facilities, and KEITH GERKEN, Deputy Commissioner,
Dept. of Transportation and Public Facilities, came before
committee.
(Senator Kelly arrived at the meeting at this time.)
The Commissioner directed attention to a handout (Attachment
A) which he advised contains a collection of information
included within the department's six-year plan. Mr. Gerken
explained that the first tabulation and accompanying pie
chart demonstrates the composition of the department budget
by fund type for the current year and six years hence. The
capital budget for DOTPF is predominantly funded by federal
dollars with a general fund match. The assumption is that
the department will be given obligation authority equal to
amounts in ISTEA legislation.
Airport improvement funds are fairly constant. Federal
legislation has been renewed for another year. IARF
(International Airport Revenue Funds) are based upon the
six-year plan.
Amounts set forth for general funds are based on an
assumption that need would continue at approximately the
same level.
Directing attention to page 7 of the handout, Mr. Gerken
explained that it demonstrates distribution of the FY 94
capital budget by fund type and function. Mr. Gerken
cautioned that the appropriation proposed by the Governor
does not necessarily reflect the actual spending plan for a
given year. He spoke specifically to what appears to be a
great amount of funding for the central region. That
perception is partially due to the fact that Anchorage has
had a federal planning process for a number of years. AMATS
thus had a plan in place, and that plan was incorporated in
the FY 94 request. The fact that other boroughs did not
have similar ongoing planning efforts appears to inflate
numbers for the AMATS area. The department will be amending
the Governor's request to include projects for other
boroughs that are now in the process of establishing
priorities. That will change the distribution of funds.
Mr. Gerken stressed that the department annually requests an
appropriation to cover both projects it expects to be
obligated in a given year as well as alternates. Alternates
can then be substituted for projects that develop problems
and cannot be undertaken in the current year. Alternates
are also utilized in situations where the state receives
more funding than planned.
Directing attention to the next line graph and tabulation
(pages 10 and 11), Mr. Gerken observed that they are
specific to federal highway funding and show the historic
level of apportionment (the amount of federal funding for
Alaska) versus the initial obligation level (the number
Congress provides in the budget at the beginning of the
federal fiscal year). The last column lists the total
obligation (commitments the department actually achieved
during the fiscal year). Mr. Gerken noted that the initial
obligation level has, with few exceptions, been less than
the apportionment. Since 1985, Congress has struggled to
keep federal expenditures down. Even though federal
dollars, funded through the federal gas tax, have been
collected at a rate allowing for full funding of the
apportionment, spending from the trust fund is counted
against the domestic spending cap. There has, therefore,
been pressure at the national level to limit the amount in
each budget year. Mr. Gerken further pointed to the fact
that the amount the state obligates has always been
"somewhat higher than the initial amount" since the state
has been fortunate in getting additional funding when it is
not utilized by other states.
Directing attention to the projected obligation for FY 93,
Mr. Gerken said that the state collected additional moneys
beyond the $176.1 million shown--approximately $4 million in
discretionary ferry moneys for the TUSTUMENA and $8 to $10
million in emergency money for flooding on the Haines
Highway and storm damage at Nome.
Mr. Gerken noted that funding for 1993 is essentially the
same as 1991 (considerably below the high of 1992). The
assumption for future years is that funding will reach the
apportionment level. That depends upon action by Congress.
There is much talk about stimulating the economy through
full funding of the federal highway program.
The chart on page 13 demonstrates the three elements of
federal highway funding under ISTEA:
1. 50% for improvements to the existing core system.
2. 35% for boroughs for local roads.
3. 15% for expansion of the transportation system.
Charts set forth on pages 16 and 17 show a breakdown of
ISTEA funding for boroughs. Mr. Gerken noted that boroughs
have ability to spend transportation enhancement dollars,
safety funds, and air quality dollars as well as bridge and
planning moneys. Most of the funding to be allocated to
boroughs under ISTEA is yet to be prioritized and requested
by the boroughs. The department continues to work with the
Alaska Municipal League committee on criteria for
competitive funding.
The tabulation on page 21 demonstrates core system funding
by region and by year. It reflects 50% of annual ISTEA
funding. Mr. Gerken noted that the amount shown for
Southeast appears to double from 1993 to 1999 as a result of
needed work on Tongass Avenue in Ketchikan. Tongass Avenue,
a core road, is in danger of collapse and will require
improvements of $60 to $70 million.
Mr. Gerken next directed attention to graphs and tabulations
relating to airport improvement funding, which he explained
would be relatively stable from FY 94 on. A small amount of
funding is available for local airports as well.
Legislation funding this activity was renewed for an
additional year. Congress will be taking it up again in the
current session. There is no great movement to make changes
here.
Directing attention to page 27, Mr. Gerken said that it
presents a tabulation of aviation funding by region. He
noted, particularly, the adjustment line and advised that
the department is over programmed in the early years, but
significant moneys remain "on the table" in later years.
The department has begun to develop a new aviation plan.
The last plan was done approximately ten years ago. Outer
years have thus been kept free so that the department may
later reflect the policies of the new plan.
Mr. Gerken next directed attention to the final pages of the
handout and noted the listing of statewide projects, those
for the three regions, and Alaska Marine Highway System
funding. He advised of several hundred open projects within
the department's capital budget.
Senator Frank asked that the department explain how the
federal highway match requirement works. Mr. Gerken said
that the department requests the annual general fund match
as a single appropriation. The request is based on
assumptions, including the full federal apportionment,
additional moneys at the end of the year (discretionary
moneys), and a percentage of non-participating items (right-
of-way issues, etc.). Mr. Gerken further attested to
savings derived from funding the match on the basis of the
state fiscal year rather than the federal fiscal year.
Remaining match from a prior fiscal year in taken as a
credit against the computation for the current year's match.
Mr. Gerken advised that the department could provide a work
sheet demonstrating how the requested $23 million match for
FY 94 was derived.
Senator Kelly inquired regarding the workings of the vessel
replacement fund. Mr. Gerken explained that moneys flow to
the fund through a separate appropriation. Last year, an
appropriation was made from the oil response fund.
In response to an additional question from Senator Kelly,
Mr. Gerken explained that questioned funding for the Alaska
Marine Highway System relates to alternate projects. The
department seeks as much as 50% in alternate projects
against what it projects it will receive from the federal
government. Commissioner Turpin added that both expected
and alternate projects are presented to the legislature, and
both are listed in the six-year plan.
Senator Kelly directed attention to the $354,917.8 listed as
federal funds under "Fund Source" information on page 7 and
asked if it includes alternate projects. Mr. Gerken
answered affirmatively.
Review next proceeded to the list of FY 94 projects set
forth on pages 30 and 31 of the handout. Mr. Gerken advised
that the $5.5 million represents the general fund match for
federal-aid to aviation.
The $11.7 million request for refurbishment and replacement
of the state equipment fleet reflects moneys from the
highway working capital fund. The fund is comprised of
payments made by state agencies for use of equipment. The
proposed appropriation would pay for replacement of
equipment that has outlived its useful life.
Brief discussion followed between Co-chair Pearce, Mr.
Gerken, and Commissioner Turpin regarding projects set forth
in the Governor's Executive Budget document.
Speaking to the $2.5 million for the corps of engineers
program, Mr. Gerken explained that, for the past four
years, the state has appropriated a match amount for corps
projects throughout the state. Prior to going to that
system, it was difficult to know which agency or community
would be able to provide match money when Congress decided
upon funding priorities for the corps. Department staff
meets with representatives of the corps in developing the
needed match amount.
General funds of $550.0 for the annual planning work program
relate to a $3.5 million federal highway appropriation for
planning work in support of the capital budget. State
moneys cover elements that are not fundable from federal
dollars.
The $1.5 million for statewide facilities major repair,
renovation, and equipment, is an ongoing appropriation for
new windows, roof repair, etc., in DOTPF facilities
statewide.
The $1 million for highway and aviation non-routine
maintenance is an emergency fund for washed out bridges,
etc. Funding covers items that are generally not
significant enough to be eligible for state or federal
emergency moneys. Commissioner Turpin subsequently attested
to use of approximately $275.0 to repair a washed-out
culvert on the Dalton Highway and $150.0 for snow and
avalanche problems.
Brief discussion followed between Co-chair Pearce and
Commissioner Turpin regarding criteria for use of federal
emergency funds. The Commissioner pointed to Haines Highway
flooding and severe storm damage at Nome as examples of
projects qualifying for federal emergency moneys. The
magnitude of damage is what leads the state to declare a
disaster and request federal moneys.
The $650.0 in statewide advanced project definition funding
provides for CIP engineering positions to review projects
for definition prior to appropriation. Most of the
department's technical staff is funded from CIP receipts
rather than general funds.
The $1 million for ports and harbors non-routine maintenance
is similar to non-routine maintenance funding for highway
and aviation projects. Last year was the first time such a
request was made. The request reflects a recommendation by
the harbors' task force.
The $8 million for statewide compliance with the American
Disabilities Act stems from impact upon both facilities and
employment practices. Funding will deal with needed changes
in buildings housing state agencies to accommodate disabled
persons. The federal act required a preliminary assessment
of state facilities. That has been accomplished. There is
presently some disagreement over how much compliance will
cost. The requested $8 million will, undoubtedly, not be
sufficient, but it represents a "good first start" toward
dealing with the issue.
The $30.0 match for the U.S.G.S. digital mapping program
covers state requests to the federal government for
remapping of areas within Alaska. It represents good,
reasonable leverage of state moneys.
The $16.0 in general funds for federal transit
administration grants represents a "fairly significant
increase" from prior years. That is due to the increased
level of transit moneys in ISTEA. Funding flows through the
department to transit operators for improvements to their
systems, purchase of equipment, etc. In response to a
question from Senator Sharp concerning eligibility for the
funding, Mr. Gerken voiced his understanding that grants
would be available to "anyone who is running a publicly
accessible transit program. It thus applies to
municipalities, private operators, etc.
The $3.5 million for DOTPF maintained facilities energy code
upgrade is similar to an appropriation last year. It would
allow the department to install such items as energy
efficient overhead doors in shops, replace inefficient
windows, upgrade heating and ventilating systems, etc. The
department has identified projects with as little as one and
a maximum of eight to ten year payback in operating savings.
The $200.0 in other funds for the federal transit
administration metropolitan planning grant reflects grants
to municipalities to plan transit projects.
The $80.0 shown as general funds for standards manual
publishing is actually program receipts. It reflects
authorization for the department to receive fees for the
sale of various manuals published by the technical section
of the department. Receipts continue to fund production of
future manuals. The effort is essentially self-sustaining.
The $250.0 from the hazardous materials response contingency
fund is for cleanup of materials on department property. As
dealing with hazardous materials becomes increasingly
costly, the department has found that people are disposing
of these materials on state property.
The $200.0 for statewide surveying and engineering equipment
replacement is an appropriation of CIP receipts similar to
the $80.0 for the standards manual publishing. The
department charges the cost of using surveying and
engineering equipment to individual projects.
The $500.0 for federal agency service agreements is a new
appropriation which allows the department to do work for
federal agencies on behalf of a capital program, if the
federal agency so requests. This issue is often raised when
the department is undertaking a project in an area, and a
federal agency wants additional work done. The
appropriation would allow the department to receive funds
from the federal agency and, in turn, pay the contractor for
the work.
The $36.0 from the federal railroad administration for
railroad planning provides for cooperative planning by the
department and Alaska Railroad.
The $120.0 for annual bridge inspection and inventory is
general fund money that supplements federal dollars. The
federal bridge inspection program is becoming more complex
than in the past. That is primarily due to the condition of
old bridges throughout the United States and catastrophic
failures in states other than Alaska. The state is thus
being required to spend more time and money on these
inspections. Requested funding will allow the department to
purchase additional inspection equipment.
End, SFC-93 #19, Side 2
Begin, SFC-93, #21, Side 1
Brief discussion followed between Senator Kerttula and Mr.
Gerken concerning statewide bridge inspections. Mr. Gerken
advised that the department inspects every bridge in the
system on "about a two-year frequency." Alaska is probably
not in as good a position to compete for bridge dollars as
Eastern states with much older bridges. In most national
surveys, Alaska's bridges are near the top of the list in
general sufficiency.
The last statewide appropriation is $500.0 for underground
fuel tank replacement. This request is in response to EPA
requirements that underground tanks that do not meet new EPA
standards be replaced. Half of the ten-year period allowing
for replacement has elapsed. The cost of replacement is
significantly greater than $500.0 a year. The department
has been fortunate in that it has not encountered $1 million
cleanup situations.
Mr. Gerken next directed attention to projects for the
Northern, Central, and Southeast regions, and noted that
regional projects share common elements in their deferred
maintenance requests. This is the third or fourth year that
general funds have been sought for this purpose. Funding
has allowed the department to clean out ditches, cut brush,
and repave worn-out roads.
Each region also has one or more contaminated site cleanups.
Cleanup is conducted through a cooperative effort with the
Dept. of Environmental Conservation to inventory and
evaluate problems. All 300 airports and 78 maintenance
sites have experienced many years of use and operating
practices that are not up to today's standards.
Mr. Gerken next spoke to the $450.0 slated for Governor's
Office renovations. He noted that because of its age, the
capitol building is often not conducive to present day
needs. The requested funding would move some offices and
provide for electrical upgrades and remodeling.
Speaking to projects within the Alaska Marine Highway
System, Mr. Gerken explained that the $4.5 million in
general funds for AMHS improvements and overhaul reflects
the same amount as requested in prior years. This type of
work does not qualify for federal funds.
The $6.4 million for the multi-purpose replacement vessel is
part of the funding for the new ferry. It will be added to
federal dollars for this effort.
The $1.2 million for reservations and marketing computer
upgrade would purchase a new computer system to replace the
present slow, inflexible, system that does not adequately
track ferry traffic.
In response to a question from Senator Sharp, Mr. Gerken
advised that information set forth in the department handout
applies to FY 94. The $2 million for dust abatement in the
Mendenhall Valley would be spent in federal FY 93. That
expenditure, with the local match, is expected to solve the
present unpaved road problem.
Responding to a further inquiry from Senator Sharp, Mr.
Gerken said that the $5 million in congestion mitigation/air
quality funding would be divided between Anchorage and
Fairbanks per the formula for disbursement of borough funds
based on population and vehicle registration.
Co-chairman Pearce advised that the meeting would be briefly
recessed prior to review of projects within DOTPF
headquarters as set forth in the capital budget bill (SB
50).
RECESS - 10:20 A.M.
RECONVENE - 10:30 A.M.
Co-chair Pearce directed attention to requests listed under
the statewide federal highway program commencing on page 12
of SB 50. Mr. Gerken explained that federal funding of
$30.0 for the experimental features program allows for
incorporation of specific technical advances into projects.
These advances are experimental in nature and "not
necessarily . . . known to work." The program is a method
of encouraging the department to try new things. The
department is required to conduct follow up for five years
after incorporating an item in a project. Experimental
items include such things as a new surface for bridge decks
in arctic environments. The new processes are intended to
save costs or improve quality.
Co-chair Pearce inquired regarding flexibility in federal
funding. Could the department elect not to conduct an
experimental program and place funding elsewhere? Mr.
Gerken explained that because projects listed under the
statewide federal highway program represent allocations
within an appropriation, the department can "do a revised
program to move money from one place to another within the
appropriation." That is generally not the result of the
department changing its spending priorities but the fact
that cost estimates or bids came in differently (higher or
lower) then expected.
Co-chair Pearce noted the mandatory nature of the $250.0
expenditure for storm water pollution control. Mr. Gerken
observed that most of the items listed under the statewide
federal highway program reflect "things which we are
required to do at some level." He acknowledged that the
level may be somewhat discretionary.
Efforts relating to storm water control relate to EPA
requirements that the quality of runoff be raised to a
higher standard than that of today. Mr. Gerken noted that
for Alaska, the standard is that of drinking water. It will
be extremely difficult to achieve.
Speaking to the internal review audit program, Mr. Gerken
explained that the department is required to have such a
program. The $215.0 funds employees within the department
who conduct internal review to provide a second opinion on
issues. The employees review specific projects and
expenditures and conduct program audits to ensure that file
materials are in proper order in accordance with state and
federal regulations.
The $370.0 for minority and women contractor participation
funds the external DBE program for training and costs of
operating the DBE system required by the federal act.
The $80.0 for the national highway institute training
program allows the department membership in the national
organization and participation in training, when offered.
The $600.0 for the statewide safety management system
relates to ISTEA. That legislation requires that, in
exchange for flexibility given to states, each state be more
systematic in managing its facilities. Alaska is required
to have a safety management system, a pavement management
system, a bridge management system, a congestion management
system, a transit management system, etc. The theory is
that the state must have some way of identifying these
elements and putting them through an inventory and
prioritization process. The systems are primarily computer
data bases with selection and sorting ability. As an
example of usage, Mr. Gerken advised that the department
could compile data in support of its plan for expenditure of
federal highway safety dollars. Under ISTEA, safety
represents 10% (approximately $11 million annually) of the
surface transportation program. The $600.0 reflects a one-
time cost for establishing the safety management system.
Speaking to the $6.2 million for statewide scenic travel and
transportation enhancements, Mr. Gerken noted that 10%
(approximately $11 million) of ISTEA funding is to be spent
on enhancements. The department does not yet know what all
is entailed by this designation. Efforts to define are
ongoing with municipalities, the state division of parks,
and the department in concert with tourism interests,
chambers of commerce, etc. The appropriation will be
available for all groups to use for qualifying projects.
The $1.1 for statewide research reflects another change
resulting from ISTEA. The federal act places a minimum
level of spending on research relating to surface
transportation. The department has established a
cooperative board with the University of Alaska, Fairbanks,
in order to prioritize research needs. This effort is
working well. The University has expanded its process to
include public transportation to assist in directing
expenditure of research moneys in the future.
The statewide safety improvement program is similar to the
enhancement program. The $4 million is a general
appropriation to make use of safety projects identified by
the safety management system.
The $385.0 for strategic highway research program asphalt
test equipment reflects funding for a research program
established at the federal level, several years ago, in
response to the national problem of premature failure of
road surfaces. Much work has been done in reviewing efforts
in Europe and looking at the chemistry and installation of
asphalt. New methods require different testing equipment to
determine whether the asphalt meets specifications. The
above-funding would allow the state to purchase that
equipment. Federal highway funds are not normally eligible
for such purchases, but since Congress has placed great
importance on this issue, moneys are available.
The $200.0 for statewide total quality management funds a
program covering value engineering and peer review processes
to conduct life-cycle cost analysis to improve the quality
of products.
The $200.0 for U.S.G.S. flood analysis is made available
each year. The U.S.G.S. does much data collection and
receives moneys from a number of agencies. The federal
agency provides needed information for department design of
culverts, bridges, road improvements, etc.
The $725.0 for statewide urban area planning will be passed
through to municipalities for preparation of local
transportation plans. Anchorage and Fairbanks are the two
largest recipients.
Discussion followed between Senator Sharp and Mr. Gerken
regarding the research arrangement with the University of
Alaska, Fairbanks, and purchase of asphalt test equipment.
Mr. Gerken advised that one set of test equipment would be
available for use by all regions and the university.
Additional discussion followed between Senator Rieger and
Mr. Gerken regarding use of general funds rather than 470
funds for underground fuel tank replacement. Mr. Gerken
acknowledged that the department had access to 470 fund
moneys for site cleanup of hazardous materials. The
underground tank problem has been viewed as a state agency
issue. Commissioner Turpin added that the tanks in question
belong to the department. Other departments may be
utilizing 470 moneys for "non-ownership tanks." The
Commissioner voiced his understanding that the tank owner
must sponsor the cleanup.
ADJOURNMENT
The meeting was adjourned at approximately 10:40 a.m.
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