Legislature(2003 - 2004)
05/05/2003 09:02 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 100
"An Act making capital appropriations and reappropriations;
capitalizing a fund; making appropriations under art. IX, sec.
17(c), Constitution of the State of Alaska, from the
constitutional budget reserve fund; and providing for an
effective date."
This was the twelfth hearing for this bill in the Senate Finance
Committee.
Amendment #8: This amendment is outlined in a memorandum from Mike
Barton, Commissioner, Department of Transportation and Public
Facilities to Cheryl Frasca, Director, Office of Management and
Budget dated May 2, 2003, which reads as follows.
The Department of Transportation and Public Facilities is
requesting amendments to the capital budget bills (HB 150 and
SB 100) before the Legislature.
Rural Airport Projects
The Department is requesting the following changes to rural
airport capital projects:
Amend
Chevak: Snow Removal Equipment Building
Increase from $50,000 to $200,000 federal receipt
authority. The cost to build this structure has increased over
previous estimates. This amount is needed in addition to an FY
03 appropriation to bring the total estimated cost to
$750,000.
Add
Scammon Bay: Airport Snow Removal Equipment Building
$100,000 federal receipts. Reflects revised Airport
Improvement Program request. This project will upgrade the
Scammon Bay Snow Removal Equipment Building.
Statewide: Various Airport Snow Removal Equipment
$4,300,000 federal receipts. This was inadvertently
omitted from the Department's original request. The project
provides federal authority to purchase new or replacement snow
removal equipment at several rural airports.
Surface Transportation Projects
The Department's current AMATS [Anchorage Metropolitan Area
Transportation Study] and Surface Transportation requests are
$68,734,000 and $416,092,600.
The following reductions are being requested to various
highway projects:
($39,906,000) - Over the past year there has been a
decrease in the amount of federal fuel tax revenues collected,
which have caused a corresponding reduction in the highway
construction program. A reduction in specific projects is
being requested to reflect delays due to the decreased federal
funding.
($48,125,000) - This amendment requests project
reductions where the Department has determined that adequate
project authority already exists to continue work through FY
04.
($1,205,000) - Also being requested is a reduction in
TRAAK [Trails and Recreation Access for Alaska] projects to
reflect a program allocation decrease.
The following additions are being requested:
$55,416,000 - New or increased federal project authority
is being requested where scope changes, funding breakdown,
updated estimates or priorities have changed.
$21,700,000 - Project authority is needed for earmarks
contained within the recently approved congressional
appropriation bill.
Finally, the amendment contains the elimination of individual
pavement and bridge projects and combines them into regionwide
allocations. This will provide the regions flexibility in
determining their greater need, pavement or bridge repair.
Similar adjustments are taking place for AMATS and FMATS
[Fairbanks Metropolitan Area Transportation Study] projects.
The net effect of these amendments is a reduction of
$12,220,000 to the AMATS and Surface Transportation
appropriation requests. A spreadsheet with the changes is
attached [copy on file].
This amendment was initially discussed at the May 2, 2003 hearing
on this bill.
Co-Chair Wilken informed that the projects identified in Amendment
#8 are included in the updated Department of Transportation and
Public Facilities spreadsheet [copy on file], dated May 2, 2003.
Senator B. Stevens stated that lines 78 through 80 of the new
spreadsheet specify that the total pavement and bridge
refurbishment expense would be $46 million. He noted that the
components comprising this amount are: lines ten through twelve
that total $14 million; lines 36 and 37 that total approximately
$10.5 million; and lines 48 and 49 that total $6.1 million.
However, he pointed out that the $6.1 million total of lines 48 and
49 is included in each of the two aforementioned totals. Therefore,
he argued that the total of these three items should be $30.6
million rather than the $46 million reflected on the spreadsheet.
He puzzled as to how the total was calculated.
JEFF OTTESEN, Acting Director, Division of Statewide Planning,
Department of Transportation and Public Facilities shared that one
of the major difficulties the Department has experienced in
preparing its capital budget request is that the Department has had
"to guess what the new formula will be in the reauthorization of
the [federal] transportation bill," as he explained, the federal
formula might not be finalized until the spring of 2004. He
expressed that this lack of finality has resulted in "much
uncertainty" in the budget. He reminded that numerous FY 03
preventative maintenance activities were eliminated because of a
decrease in federal funds "late in the year." Continuing, he voiced
the Department's desire to provide the various regions of the State
with the flexibility to use any excess federal aid the Department
might receive, to "catch up" on preventive maintenance activities
and other necessary projects.
Senator B. Stevens noted that the budget for the Central region has
increased from $14 million to $20 million and that the Northern
region's budget has increased from $10 million to $20 million. In
addition, he reiterated that the newly created Southeast region's
$6 million proposed budget, as specified on lines 48 and 49, is
incorporated into the total budget three times. He continued to
voice confusion regarding how the budget was calculated.
Co-Chair Wilken asked the Department to provide the Committee with
a summary sheet to further define the total expense.
Mr. Ottesen clarified that rather than attempting "to be the exact
sum of the old lines," the revised lines in the spreadsheet are
intended to include the old lines "plus the extra authority" that
might be forthcoming from the federal government.
Co-Chair Wilken understood that the federal funding in question is
specific to the Anchorage Metropolitan Area Transportation Study
(AMATS) and the Fairbanks Metropolitan Area Transportation Study
(FMATS).
Mr. Ottesen clarified that the federal funding would have a region-
wide effect.
Co-chair Wilken asked the Department to provide a revised
spreadsheet to clarify the funding.
Senator B. Stevens noted that, were Amendment #8 adopted, FMATS
projects would be reduced approximately $545,000 and AMATS projects
would be reduced $12.3 million for an AMATS total of $54.2 million
as compared to its original budget proposal of $66.5 million.
Senator B. Stevens additionally asked for an explanation of the new
Metropolitan Planning Organization (MPO) item on line 74 as well as
a clarification as to whether Anchorage's University and Illinois
Avenues, as identified on line 21 in the new spreadsheet, are
considered part of the MPO road system or are classified as State-
owned roads.
Mr. Ottesen explained that University and Illinois Avenues are
considered State-owned roads.
Senator B. Stevens opined, therefore, that they are included in the
National Highway System (NHS).
Mr. Ottesen replied no. He explained that although these are State
roads, their location within a MPO mandates that their funding be
included in the MPO budget. He noted that roads designated as
National Highway System routes would be the exception to this
determination.
Senator B. Stevens declared that his AMATS and FMATS budget
reduction calculations and percentages differ from the
Department's, and he remarked that his primary concern is the $12.3
million reduction in AMATS funding. He communicated that the
proposed FMATS and AMATS $12.7 million total budget reduction
equates to 16.1 percent of the total budget reduction. He asked the
Department to identify similar levels of reductions in other areas
in the State, as he asserted that rather than AMATS carrying the
brunt of total budget reduction, the entirety of the components
should reflect a 16-percent Community Transportation Program (CTP)
reduction
Co-Chair Wilken asked the Department to provide a reconciliation of
the numbers.
Mr. Ottesen affirmed that further information would be provided.
Mr. Ottesen reviewed the Department's funding approach by
explaining that in November 2002, the Department projected a total
funding level of $205 million for CTP and Trail and Recreation
Access in Alaska (TRAAK). He communicated that these two categories
fund MPO allocations. Continuing, he noted that current non-MPO
funding is estimated to total "only" $94 million. Therefore, he
explained that the revised FY 04 spreadsheet "is an attempt to
restart" funding allocations to produce "equality across the
board," between the MPOs and the non-MPOs in the State.
Mr. Ottesen reminded the Committee that previous "transitional
funding" levels authorized for Illinois Avenue and University Drive
upgrades were at the 100 percent level; however, due to a downturn
in available funding, the transitional funding specified for them
in FY 04 is at the 50-percent level. He explained that these
transitional funds are in addition to the regular funding mechanism
for these avenues, and he noted that this type of extra funding has
occurred frequently over time. He expressed that other projects
have received additional funding in this manner, and he assured
that the extra funding has been provided "judiciously and for good
reason."
Co-Chair Wilken announced that the Department would continue to
work with Senator B. Stevens to address his concerns.
Senator Hoffman noted that the revised FY 04 budget totals $350
million as opposed to the original budget of approximately $450
million. He asked the Department to identify which Statewide
Transportation Improvement Program (STIP) projects have been
eliminated due to the funding reduction.
Mr. Ottesen explained that the red line denoted on the budget chart
accompanying the revised spreadsheet indicates the original federal
funding level that was estimated for FY 03 through FY 06 while the
yellow line on the chart reflects the current anticipated federal
funding level reduction of approximately $75 million per year. He
noted that the federal and State match funding levels are also
depicted.
Senator Hoffman asked which projects would be affected.
Mr. Ottesen stated that the reduction would be all encompassing.
Senator Hoffman surmised therefore that the project reductions in
their entirety would equate to approximately $75 to $80 million per
year.
Mr. Ottesen clarified that the net affect would be approximately
$160 million, as the downturn in federal funds would affect the
current year's funding in addition to the FY 04 funding. He
affirmed that the issue is complex because the total includes the
new SHAKWAK funding category that is limited in its scope of usage
and is excluded from the regular federal funding formula.
In response to a question from Senator Hoffman, Mr. Ottesen replied
that the Department was unaware of some of the federal FY 03
funding reductions until approximately four weeks prior. He assured
that the Department is currently revising both the FY 03 and FY 04
budgets in an attempt to re-schedule and/or delay projects. He
communicated that this is the first time in fifteen years that the
Department has faced a downturn in federal funding.
Senator Taylor questioned the methodology used to determine which
projects were selected for funding reductions; specifically whether
such things as the elimination of $1.4 million in federal receipts
designated for the Saxman ferry terminal occurred because of the
Department's knowledge that the delivery of the ferry was being
delayed.
JOHN MACKINNON, Deputy Commissioner of Highways & Public
Facilities, Department of Transportation and Public Facilities,
stated that the Department's three regional directors and staff
worked to make "cuts proportionately" and to reach agreement on
which projects could be delayed "with minimum impact" or with a
determination that a project's funding authority would not be
included because the project was behind its projected timeline. He
clarified that rather than jeopardizing a project, its delay would
appropriately reflect the project's current situation. He noted
that these projects might be behind schedule due to such things as
right-of-way conflicts, utility delays, or construction schedules.
Senator Taylor voiced concern regarding two big projects in his
district; specifically the $6 million Gravina Island access bridge
to the airport project and the $1.9 million Tongass Avenue
resurfacing project.
Mr. MacKinnon referred the Committee to the spreadsheet as it's
comment section specifies that sufficient money would be available
in the proposed budget to continue those projects through FY 04.
Senator Taylor requested that some assurance be provided to
substantiate that the projects would be adequately addressed in the
FY 05 budget proposal.
Mr. MacKinnon assured that these projects would be furthered,
provided that sufficient federal funding becomes available.
Senator Taylor asked whether this assurance is based on the
historical level or the projected level of federal funding.
Mr. MacKinnon clarified that it is based on the anticipated level
of federal funding, which, he characterized "as a more realistic
level" of what the funding would be.
Senator Taylor asked regarding the deletion of the $6.5 million
Prince of Wales Coffman Cove Road from the FY 04 budget. He asked
for assurance that this project would move forward even though the
accompanying comment section specifies that the its funding would
not be required until FY 05.
Mr. MacKinnon responded that the Coffman Cove project is a federal
forest service project that has been bid and is currently being
awarded. He assured that the project would be included in the FY 05
budget, as its funding would not be required until August 2004.
Senator Taylor declared therefore, that the project would be
addressed in the FY 05 budget.
Mr. MacKinnon concurred.
Senator B. Stevens asked whether the ferry system projects on lines
65 and 67 of the revised budget were included in a recently adopted
amendment pertaining to SHAKWAK designated funds of $68 million.
Senator Taylor interjected that the funding for these projects is
separate from the $68 million SHAKWAK amendment.
Mr. MacKinnon concurred.
Co-Chair Wilken reiterated that the Department would provide
information to the Committee regarding questions that arose during
this meeting.
Co-Chair Wilken ordered the bill HELD in Committee.
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