Legislature(2001 - 2002)
03/13/2001 01:33 PM Senate TRA
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 83-CONSTRUCTION OF HIGHWAYS BY DOTPF
CHAIRMAN COWDERY, sponsor of SB 83, explained that force accounts
are part of the state budget system. No limit has ever been placed
on the amount that can be spent using a force account. SB 83
limits force account spending, after hearings have taken place and
a finding of fact has been established, to $250,000. He sponsored
this bill because many people have expressed concern that the force
account system might be abused and that projects that cost more
than $250,000 should be let for competitive bid.
MR. KURT PARKAN, Deputy Commissioner of DOTPF, said DOTPF does not
support SB 83. DOTPF believes that force accounts provide an
opportunity to take care of problems and projects in the state that
are suited for that type of construction. Force account work
amounts to 3 or 4 percent of DOTPF's total program budget: of that
3 or 4 percent, about 50 percent goes to private firms. DOTPF sees
force accounts as one tool in its toolbox. DOTPF prefers to
maintain flexibility to use that mechanism in the future and a cap
of $250,000 will restrict DOTPF's abilities.
CHAIRMAN COWDERY asked Mr. Parkan how DOTPF would interpret the
word "highways" in the title of the bill.
MR. PARKAN said DOTPF would interpret that to apply to projects
that are funded through the Federal Highway Administration (FHA)
and subject to FHA requirements.
CHAIRMAN COWDERY asked if a gravel road would fall under SB 83.
MR. PARKAN said in his view gravel roads would fit within SB 83.
He noted AS 19.45.001 contains a definition for "highway" that
reads:
(9) "highway" includes a highway (whether included in
primary or secondary systems), road, street, trail, walk,
bridge, tunnel, drainage structure and other similar or
related structure or facility, and right-of-way thereof,
and further includes a ferry system, whether operated
solely inside the state or to connect with a Canadian
highway, and any such related facility;
CHAIRMAN COWDERY said he was aware of the statutory definition but
wanted to make sure it was understood that the word "highway"
includes just about everything.
SENATOR WARD asked what cap would be appropriate.
MR. PARKAN said that no cap would be appropriate.
SENATOR WARD asked if $2 billion would be appropriate.
MR. PARKAN stated that DOTPF prefers the statute as written.
SENATOR WARD said with no restriction, a project could be estimated
in the billions.
MR. PARKAN repeated that DOTPF's history of force account use shows
the amount has been 3 to 4 percent of DOTPF's total program budget.
DOTPF does not spend a lot of money using force accounts and he
does not anticipate that it will.
SENATOR WARD asked how much 3 or 4 percent equals.
MR. PARKAN said DOTPF's program equals about $400 million so 4
percent would amount to about $16 million.
SENATOR WARD asked if DOTPF would like the amount in SB 83 to be
changed to $16 million.
MR. PARKAN stated that DOTPF does not want any cap.
SENATOR WARD asked, if the Chairman wants a number in the bill,
whether $16 million is the most that DOTPF would use.
MR. PARKAN said the largest project DOTPF has done using force
accounting has cost about $4 million.
SENATOR WARD asked Mr. Parkan whether $4 million or $16 million is
acceptable, if a cap is put in.
MR. PARKAN said he is not willing to get into hypotheticals.
SENATOR WARD commented that $4 million is the real number and $16
million is hypothetical.
Number 1599
SENATOR ELTON asked Mr. Parkan to review a list of the
opportunities that force accounting provides to DOTPF.
MR. PARKAN said a couple come to mind. In rural Alaska, where
village safe water projects are constructed by the Department of
Environmental Conservation (DEC), a portion of a project may be
suited for some federal funding to, for example, improve a
boardwalk or a road. DOTPF would give DEC a portion of the money
to take advantage of combining the two projects. A second example
would be when DOTPF uses its own staff to do deferred maintenance
work in the summer. Over the last several years, DOTPF has
increased its use of federal funds for minor maintenance projects.
SENATOR ELTON indicated that he has seen opportunities using this
kind of an approach to train local workers so that some of the
dollars stay in the rural community.
MR. PARKAN agreed that DOTPF is doing some training with a federal
grant, which allows for local hire.
Number 1599
SENATOR ELTON pointed out that none of the opportunities listed by
DOTPF have a connection to a dollar amount, be they local job
opportunities, job training, or deferred maintenance.
CHAIRMAN COWDERY asked what the low and high limits are for
projects that went out to competitive bid in rural Alaska. He
asked whether DOTPF competitively bids $1 million projects.
MR. PARKAN replied that projects that cost over $100,000 generally
go out to competitive bid.
CHAIRMAN COWDERY explained that he introduced this bill because
almost everyone involved in construction supports some limit. He
said he understands the St. Mary's project will cost $3.5 million
for 7 or 8 miles of road.
MR. PARKAN said the St. Mary's project cost a little over $3
million for 5 miles of road.
CHAIRMAN COWDERY said he was told that money was spent to hire
people in the community because they had a bad fishing season. He
wondered who will fish this year if everyone is working on the
road.
MR. PARKAN stated that fishing jobs are not DOTPF's responsibility
so he cannot answer that question. He does know that there is an
interest in construction jobs by rural Alaskans throughout the
state. The St. Mary's project will hire local Alaskans; about
$900,000 of that project will be spent on local hire.
CHAIRMAN COWDERY asked if the road workers will be paid Davis Bacon
wages, as they would if paid by private contractors.
MR. PARKAN replied they will be state employees and hired as Local
71 employees.
CHAIRMAN COWDERY said, as a former contractor who did several
million dollars worth of work in rural Alaska, he always looked to
hire local people. However, private contractors are always stuck
with paying Davis Bacon wages. He asked if DOTPF does not think
local workers are worth Davis Bacon wages and why those workers
will be made state employees.
MR. PARKAN said the local workers will be temporary employees.
SENATOR TAYLOR asked Mr. Parkan to address the question about Davis
Bacon wages.
MR. PARKAN said they will be hired at the state employee wage rate,
which is less than the Davis Bacon wage. He noted that most of
these projects are in rural Alaska and are contracted out and
subject to Davis Bacon wages so there are plenty of opportunities
for people to earn Davis Bacon wages. The DOTPF jobs provide an
opportunity for local hire and training. He estimated about 17
people will be hired for the St. Mary's job. He repeated that
force accounts are just one of many tools used by DOTPF and he does
not believe it is overused.
CHAIRMAN COWDERY asked what the cost of the project would be if
Davis Bacon wages are paid for this project.
MR. PARKAN said the cost of all state workers will be approximately
$34,000 per week while the cost for contracted workers will be
about $58,000.
SENATOR WILKEN commented that he appreciates the need for force
accounting but he has two concerns. He is concerned about the
growth of force accounting. From 1998 to 2000, not including the
St. Mary's project, DOTPF has increased the use of force accounting
by 50 percent. If this legislation is a reaction to what the
legislature sees as a dangerous trend, in some respect SB 83 is a
defense to limiting that growth while recognizing the need for
local participation for a follow up or a small concurrent project.
Second, Fairbanks' contractors complained to him that the St.
Mary's project was ready to go out to bid when someone stepped in
and pulled the $3 million off the table. The project is now going
to be done with state money and state workers. SB 83 is a reaction
to that type of activity.
SENATOR WILKEN referred to a letter he received from the
Association of General Contractors (AGC) that speaks to the
economic upheaval in the communities hardest hit by the crash in
the fishing industry. He said he understands and appreciates that
problem and that the state has thrown hundreds of millions of
dollars to those communities to help them recover from that crash.
At the same time, DOTPF is going to take money from the Fairbanks
contractors and train people to get their commercial drivers'
licenses to get through the summer. He questioned the logic
because those people will be fishing next summer. He felt that SB
83 is the Legislature's attempt to say, "No more St. Mary's." He
pointed out there was another group of force accounting projects
that all cost around $230,000. He suggested that may be where the
sponsor got the number.
SENATOR WILKEN questioned whether the existing force accounting
system is in the best interest of Alaskans and whether it is fair
to private industry that is battling for these projects and has
every right to expect an opportunity to bid on the projects. He
stated that he supports SB 83 although he does not know what the
cap should be set out. He thought Senator Ward was asking for
DOTPF's help to get that number.
MR. PARKAN responded that the total program has grown considerably
over the last several years so the total dollars going to force
accounts will continue to increase, but the total percent is
holding steady. Another component of that growth is that DOTPF has
been spending more money on deferred maintenance for highways.
Regarding the discussion about training people to get CDLs, DOTPF
sees that as an opportunity to develop a regionally-based
workforce. Hopefully, those workers will be able to go to another
project. Contractors will be able to hire local people and not pay
moving costs. Mr. Parkan said he appreciates the sponsor's
sensitivity to the St. Mary's project but at this time, he is in no
position to discuss caps or limits.
SENATOR WILKEN pointed out that DOTPF has gone directly to federal
agencies on its own and asked whether it can use federal monies for
preventive maintenance and repairs. The state could not do that
before, now it can. His contractors feel that force accounting is
okay to patch a few miles of highway but not to rebuild ten miles
of highway. That is the balance that needs to be reached with the
force account issue.
CHAIRMAN COWDERY asked how much money will be spent on training.
MR. MARK O'BRIEN, Chief Contracts Officer for DOTPF, told the
committee that about $20,000 has been expended to date for CDL
training in St. Mary's.
CHAIRMAN COWDERY asked if that will be the total cost for the
training.
MR. O'BRIEN said that will be strictly for the CDL training, which
is the first phase of the training. Training for other types of
heavy equipment will be given.
Number 2207
CHAIRMAN COWDERY said he didn't have a problem with DOTPF using
force accounting if it has put a project out and no one bid on it,
but when the private sector is interested, the project should go to
bid. He asked if any DOTPF has put any requests for proposals out
in rural Alaska for projects over $250,000 that have received no
interest from the private sector.
MR. PARKAN said DOTPF gets several responses to every offering. He
said, "A lot of people are working out there and yet we still have
capacity for more jobs, more projects."
CHAIRMAN COWDERY said when the St. Mary's project first surfaced,
there was also talk of doing a similar project in Emmonak. He
asked why the Emmonak project was dropped.
MR. PARKAN said his understanding is that the Emmonak project was
an airport project and that force accounting would not be suitable
for it.
CHAIRMAN COWDERY asked what the value of that project would have
been.
MR. PARKAN said it was under $10 million.
SENATOR WILKEN clarified that Mr. Parkan was correct. According to
DOTPF's budget, force accounting has increased 50 percent from 1998
through 2000 while DOTPF's total budget has increased 46 percent.
SENATOR ELTON encouraged committee members to consider that
training people in a local community to do other jobs does not
necessarily displace them from the fishing industry. The fishing
industry lasts several weeks at the most in many of these areas and
a lot of the skills those people learn through this kind of a
process can be used to keep an airport open in the winter. Senator
Elton noted that there is a lot of enthusiasm about the fortunate
placement of Congressman Young as Chairman of the House
Transportation Committee and Senator Stevens on the Appropriations
Committee and the dollars coming to Alaska through the Denali
Commission. He asked Mr. Parkan how much growth may occur in the
force accounting component of DOTPF's budget and whether that is
because it only works for certain projects.
Tape 01-8, Side B
MR. PARKAN said DOTPF expects to maintain the same level of about 3
to 4 percent in the future as the program grows. DOTPF will be
limited by its own staff constraints.
CHAIRMAN COWDERY asked if the project specifications would be the
same using a force account or a competitive bid.
MR. O'BRIEN said they would be the same. DOTPF's construction
manager will manage those projects using the same requirements as a
private sector contractor.
CHAIRMAN COWDERY asked if there is an adequate amount of aggregate
in St. Mary's.
MR. O'BRIEN said he believes there is.
CHAIRMAN COWDERY asked if the equipment to be used in St. Mary's is
in place.
MR. O'BRIEN said it is; the City of St. Mary's is in the process of
acquiring sufficient equipment to handle this project.
SENATOR TAYLOR said he is torn on this legislation because the
Davis Bacon legislation was a policy call orchestrated by special
interest groups to make sure they got paid the highest and best
wages they could for doing state projects. He said,
Now it appears that some of those folks have given a buy
or a pass to this Administration that on some smaller
projects in some areas where he wants to seek political
favor they can go out and they can do other things. It's
interesting. I don't see or sense any of those things
going on in my district. Apparently, we're not favored
with wanting to assist local employment in an area
devastated by the loss of the timber industry but if
somebody has a bad fishing run up north, all of a sudden
we thrown out all the laws and we can just change
everything and every one of our friends and special
interest groups will go along with us to do this.
I haven't heard a single thing come out of this
Administration yet from your discussion and I'd
appreciate it if I'm wrong in my interpretation but is
appears to be social engineering with a tremendous
political bent thrown in and all of it trying to be
justified on, well, we're going to get local employment
out of this process.
I haven't heard anything yet that says anything
different. You're still going to spend the same amount
of money, there's no saving there. You're still going to
build the same road, according to exactly the same specs,
but we throw out all of these processes of everything
from Davis Bacon to lowest bid. It reminds me a great of
what Bill Sheffield attempted to do with Lennie
Arsenault. You know, you've got a building for sale or
rent and, what the heck, Lennie, I'll just a deal with
you. I don't have to go through the state procurement
code and I don't have to abide by any of these rules.
I'll just do it because it's a nice thing for me to do to
help out the plumbers' union in Fairbanks. He almost got
indicted over that. I'm trying to understand where we
draw the line at any given point. Do you have to have a
bad fish run before this Administration will show up in
your community and help you out? Or do you just have to
have a road project and be somebody that they'd want to
favor?
Maybe I'm missing something here, Mr. Chairman, but I'm
having a hard time understanding it. Coming from small
communities, where we get damn little in the way of
capital projects and we have to beg DOT to ever come down
there and even resurface a road, it kind of surprises me
that they're falling all over themselves to help somebody
else up north to make sure local folks get hired.
They've never once done that with us. They never offered
to come to Wrangell and put everybody on the payroll down
there and take care of everybody in town and train them
how to operate things, let the city go buy brand new
equipment - because that's what's happening here.
Apparently the city's going to buy the equipment based on
this contract. What happens when the job's over. Does
the state own that equipment or does St. Mary's?
MR. PARKAN answered that St. Mary's owns the equipment. He
explained that, according to statute, projects that are contracted
out are subject to Davis Bacon wages. The cost of the St. Mary's
project was estimated to be 15 percent higher if it was contracted
out. DOTPF has done a force account project in Ketchikan on the
Married Man trail.
CHAIRMAN COWDERY pointed out the committee was provided with a book
about DOTPF projects that used force accounts in the past.
Number 2148
SENATOR WARD said the Governor did not want to declare the Kenai
area a disaster area when it had a disastrous fishing season, even
though the North Road is falling apart. He asked if there is
anyway to get a force account to get that road fixed.
MR. PARKAN said DOTPF is taking care of a lot of the needs in Kenai
with its programs.
SENATOR WARD said certainly not on the North Road, which has 487
potholes as of this morning.
MR. PARKAN pointed out that the state's road needs far exceed
DOTPF's ability to meet those needs.
SENATOR WARD said maybe force accounting is part of the problem.
SENATOR ELTON commented that the force accounting procedure that
has been used is not illegal - the statute gives DOTPF a great deal
of latitude in its use. He noted that if force accounting allows
DOTPF to spend less on a project, that may enable DOTPF to fix
those potholes in Kenai a little bit faster.
CHAIRMAN COWDERY said, with that thought, we could eliminate
competitive bidding and do all projects with state equipment.
SENATOR TAYLOR asked, even if force accounting were illegal, where
he would find anyone to enforce it in this Administration.
CHAIRMAN COWDERY said Senator Elton is correct in saying that DOTPF
has acted legally according to statute, but the purpose of SB 83 is
to put a limit in statute. Some people believe that the force
account system is being abused. He then took public testimony.
Number 2020
MR. BOB POE, Executive Director of the Alaska Energy Authority
(AEA), said he wanted to speak to the suggestion to extend the
concept of a cap on force account projects to other parts of the
Executive Branch.
MR. POE said three issues are at the heart of force accounting: the
economic impact of the project on the community; the overall cost
of the project; and sustainability - how do we make sure the
community has the ownership and the knowledge about the project to
help it reach its economic life. The force account system has been
the most effective approach AEA has to maximize local hire. It
leaves a lot more of the economic benefit in the community than
just the project. It provides the community members an opportunity
to earn money and to get skills. It also gives the community a
greater sense of pride and community ownership in the project.
MR. POE explained that AEA is using a slightly different model for
its force accounts. AEA recently awarded six contracts to
construction managers. It is in the process of reviewing proposals
for design and construction. The proposals were solicited through
competitive bid and contractors will use the private sector to do a
lot of things related to the projects. In the construction
management contracts, AEA also asked that the contractors submit
proposals for improving training, perhaps on a regional basis, to
develop skills in those communities. As an example, Houston
Contractors has a very real need to hire rural employees to work on
the pipeline. They are losing Native employees through attrition
or retirement. Houston is very interested in developing skills
among rural Alaskans and attracting those people to work on the
pipeline. Houston has partnered with the AFL-CIO to develop
training programs for electricians, welders, pipe fitters, plumbers
sandblasters, painters and heavy equipment operators, using
apprenticeship wages. AEA tries to use force accounts to leave
benefits in communities and to use the private sector to leverage
AEA's ability to not add a lot of state employees. AEA contracts
with each city; those employees working on a force account actually
work for the city. Using a force account typically does result in
a lower wage scale and reduces transportation and out-of-town
housing costs. Using a construction management approach has
lowered AEA's costs because of onsite quality control. The
construction managers find a foreman who then works for the city.
The design costs are lower since a complete bid package is done.
Greater consistency among projects occurs because parts and
equipment can be standardized. He said that AEA would argue that
there are real benefits to force accounts and AEA is using a model
that makes sense for both the private sector and communities.
Number 1813
CHAIRMAN COWDERY asked Mr. Poe if AEA requires any bonding.
MR. POE said he did not know the answer but he is sure that bonding
is required on the construction management contracts as part of a
normal state contract.
SENATOR WARD asked if AEA has created any state employees to do any
of the work.
MR. POE said it has not.
MR. NICK TUCKER, a resident from Emmonak representing himself, said
he is opposed to limiting any funds that will stop rural Alaska
from moving into the mainstream of the 21st Century and help
economic development and the education that rural children are
getting now. Local hire and training help the young people of
Emmonak. He is concerned that creating two classes of people,
urban and rural, with only urban citizens being qualified to work,
will be very dangerous. He is a commercial fisherman who was
extremely hurt by the two fishing disasters. He was a member of
the Raven Commission under Governor Hickel. The Emmonak region has
one of the lowest per capita incomes in the state and country. It
has no timber or major industries, only a very small scale fishery.
When that fishery is hurt, people are hurt. The opportunity for
any level of training and education is very important to the people
in the villages.
CHAIRMAN COWDERY commented that the way that DOTPF is managing
force accounts is creating a rural-urban divide because contractors
from rural Alaska could bid on such a project. The fact that the
urban contractors do not have the opportunity to bid these projects
creates a divide.
MR. TUCKER said he is awed at how creative Alaska Natives are.
They need to have the same opportunities as urban people. He noted
people in the village are very thankful to have year round jobs to
put food on the table.
CHAIRMAN COWDERY said he did a bank erosion project in Kotlik. He
hired eight urban people and about 30 local people for that project
because it was cheaper. He hired the eight urban people because he
needed qualified people to meet certification requirements.
MR. TUCKER asked the committee to keep in mind that putting any
limit on force accounts will inhibit the growth of rural
communities while the state is working very hard to get people off
of welfare.
MR. WALTON SMITH, city manager of St. Mary's, said in response to
the concern that training local residents will affect the fishing
industry, that there are more than 600 fish permit holders in that
area and each has a helper. Less than 5 percent of the fishers
will be put to work on the construction project and St. Mary's does
not expect to have a fish opening next summer anyway.
CHAIRMAN COWDERY pointed out that was the reason DOTPF gave for
using a force account to do the St. Mary's project.
MR. SMITH stated the Wade Hampton unorganized borough has one of
the highest unemployment rates; chronic unemployment is over 30
percent and with a poor fishing industry, it is worse. The St.
Mary's project has allowed 39 people to get CDL training. CDLs are
required and there is a special federal exemption for Alaska for
off road CDLs. This project has provided a great opportunity to
meet some requirements that were already in effect. He noted that
regarding the comment that these operators will not be paid Davis
Bacon wages, these operators, many of whom are unemployed, will
work a 60 hour work week with time and one-half for overtime, which
will equal between $1400 and $1650 per week. Contrasted with no
income, he does not feel they are being cheated by not earning
Davis Bacon wages. The City of St. Mary's has done millions of
dollars of force account work on water and sewer projects in the
last few years, including some money from DOTPF for some road work.
That allowed more pipe to be put in the ground and improved public
health than would have been possible had higher wages been paid.
Using the force account system allows "more bang for the buck."
Regarding welfare reform, the new federal law limits the amount of
time a person can stay on welfare. If no training and no jobs are
available, people will go hungry. He is concerned about comments
that using force accounts is a dangerous trend and that abuses are
occurring; he does not believe anything illegal is going on. One
condition for a best interest finding is the declaration of a
disaster, which occurred in St. Mary's several years ago and
continues in effect right now. The City of St. Mary's is not
buying brand new equipment for this project - it cannot afford to.
He said regarding the argument that force accounts take something
away from someone else, Anchorage has had one of its biggest years
ever for contractors with state highway funds. The City of St.
Mary's project represents less than 3 percent of DOTPF's budget.
He applauds the Governor and the Commissioner of DOTPF because they
have helped, with the decision to use force accounting on the St.
Mary's project, economic development and diversification, which is
what the residents of St. Mary's need. Passage of SB 83 will
create two classes of Alaskans.
CHAIRMAN COWDERY asked how many "belly dumps" the City of St.
Mary's owns.
MR. SMITH said it owns none, and it does not plan to acquire any.
St. Mary's has three 12 yard end dumps, which are not adequate, and
it will be purchasing three used off-road haulers.
CHAIRMAN COWDERY asked if St. Mary's has compactors, water trucks
and asphalt equipment.
MR. SMITH said that St. Mary's has no asphalt equipment. It has
compactors, a grader, three CATS, three end-dumps and two
excavators.
CHAIRMAN COWDERY asked if a contractor came in to do this job and
asked to lease equipment from St. Mary's, the city would be in a
position to do that.
MR. SMITH said right now that equipment is very valuable to St.
Mary's. In the past, contractors have rented equipment and
returned it in poor condition. St. Mary's is reluctant to lease
the equipment now but it will be in a better position to make
equipment available to a contractor when its fleet is larger.
CHAIRMAN COWDERY said when he rented equipment, there was a
standard for the normal wear and tear.
MR. SMITH noted the city has had people rent a truck to haul
equipment from the airport and although the truck can carry 6,000
pounds, 22,000 pounds of freight was carried in one trip.
SENATOR WARD asked Mr. Smith if the City of St. Mary's considered
hiring the employees instead of having them be state employees.
MR. SMITH said it did and advocated for that for over two years but
DOTPF felt that because it would be directly responsible for the
money and directly responsible to the Federal Highway
Administration (FHA), city hire would not be appropriate. The city
has hired an engineer to provide supervision over qualified
superintendents who will run the job and train workers.
SENATOR WARD asked Mr. Smith if DOTPF told him the city could not
hire city employees and if that was because the cost would be
different.
MR. SMITH said DOTPF felt, because of the FHA objections that the
money might not be appropriately used, that this mechanism would
best meet the needs of the City of St. Mary's and FHA requirements.
SENATOR WARD said he does not believe that is an FHA requirement.
He then asked how many of the 39 people who have been trained in
St. Mary's are from Anchorage.
MR. SMITH said as far as he knows, none.
SENATOR WARD asked where they are from.
MR. SMITH said as far upriver as Russian Mission and as far
downriver as Kotlik.
Number 749
SENATOR WILKEN asked how much the three 17 yard off road haulers
are worth.
MR. SMITH said by the time they are delivered to St. Mary's they
will cost under $140,000 each. They are used pieces of equipment.
SENATOR WILKEN asked if that is part of the $3 million contract.
MR. SMITH said it is not. The city is getting a rate that is close
to Blue Book. In the last five years, the city has exported gross
sales of over $500,000 in gravel. The city anticipates additional
contracts and believes the additional work it does on gravel will
pay for the equipment in a couple of years.
SENATOR WILKEN asked if the city is using city, not state, funds to
purchase the equipment.
MR. SMITH said that is correct.
SENATOR WILKEN asked if that equipment will be used as the city
sees fit to make money.
MR. SMITH said that is correct and it is being viewed as an
economic development project as it will help replace aging
equipment. He noted the city has sold over 30,000 tons of crushed
rock in the last three years.
CHAIRMAN COWDERY asked if the 5 to 8 miles of road that will be
built will be a state road and whether the city's off road vehicles
will be legal to haul on it.
MR. SMITH said as far as he knows, there should be no problem. His
only concern has to do with coatings.
CHAIRMAN COWDERY asked if Mr. Smith thinks the state will waive the
regulations to allow the city's vehicles to use the road regardless
of weight.
MR. SMITH said the state has done so for private contractors for
years.
CHAIRMAN COWDERY pointed out they haven't had a road.
MR. SMITH explained that the road has been there since 1993 -this
project will rehabilitate the road.
SENATOR TAYLOR asked if the road will be paved.
MR. SMITH said they have had some discussion about high float and
oil emulsion that is known as "a poor man's paving." Once that is
done, track vehicles will not be allowed on the road and they will
have to transport with a low boy.
SENATOR TAYLOR asked what amount of return the city anticipates
receiving off of this contract for use of the three 17 yard Volvos
it is purchasing.
MR. SMITH said, as with a contractor, it depends on how many hours
the equipment is down, how many flat tires they have, and how fast
his mechanic is.
SENATOR TAYLOR said at best it will be 50 percent, at worst maybe
25 percent. His engineer thinks the state has underestimated the
length of time the project will take.
SENATOR TAYLOR asked if, when the city went to its banker, it
contemplated a certain amount of return on this equipment from this
job.
MR. SMITH said his bank anticipates that the city should be able to
net around $150,000 per year over the next ten years.
SENATOR TAYLOR asked if a major portion of the cost of the
equipment will be amortized back to the city off of both gravel
sales and this project.
MR. SMITH said that is true and that is why it is an economic
development project. Right now the city has three 12 yard end
dumps but it could carry the same amount with one 17 yard truck in
the same amount of time so it should make the city more competitive
in gravel sales along the Yukon.
Number 428
SENATOR TAYLOR asked what the primary source of employment is in
St. Mary's.
MR. SMITH said St. Mary's has a single site school district and two
local stores. He assumes about 12 jobs are in the local stores;
those jobs pay about $5 or $6 per hour.
SENATOR TAYLOR asked what the population of St. Mary's is.
MR. SMITH said about 500 people live in St. Mary's.
SENATOR TAYLOR said he can sympathize with St. Mary's in its desire
to put more pipe in the ground and get the road project going as
there isn't a small community in the state that wants to do the
same. He expressed concern that the other communities are always
saddled with Davis Bacon wage requirements and that small
communities are treated differently.
MR. SMITH said he believes it is because of the relative poverty in
St. Mary's. The residents of St. Mary's are exceedingly poor and
the area has very limited resources. Something needs to be done to
train the local people and make them more versatile. This project
is truly a community development project.
SENATOR TAYLOR said he doesn't get much support from this
Administration for similar projects. He said he is amazed St.
Mary's is even getting a road repaved.
Number 184
CHAIRMAN COWDERY asked if St. Mary's would still sell the gravel to
the low bidder if the project was done with a competitive bid.
MR. SMITH clarified that he was speaking about gravel sales in the
future, not for this project. He said his understanding is that
the majority of the gravel for this project will come out of pits
that are being opened up by the state.
SENATOR TAYLOR asked where those pits would be located and why the
state wouldn't use the aggregate right there since the city has a
rock crusher.
MR. SMITH said a majority of the rock, which will amount to 150,000
cubic meters, will be "pit-run" material for the base course. It
will not be crushed so the state will be opening up at least two
other pits between the city and the airport at a high point so the
trucks will go uphill empty and downhill loaded. If the state used
the city pit, which is close to town, the costs would be
horrendous.
CHAIRMAN COWDERY asked Mr. Smith if he believes the state would
open up pits to furnish the aggregate necessary if the private
sector bid the job.
MR. SMITH said the pits the state will open are not owned by the
state - they are owned by Chulista. The state is negotiating for
use of those pits.
CHAIRMAN COWDERY thanked Mr. Smith for his testimony and asked Mr.
Head to testify.
MR. ROGER HEAD, RV Management Services, said that most of the work
his firm does is in rural Alaska, the majority being in the Lower
Yukon-Kuskokwim area. He is very familiar with the unemployment
situation in that area, which is at about 22 percent right now.
The unemployment rate in that area has traditionally been the
highest in the state for the last ten years.
TAPE 01-9, Side A
MR. HEAD said DOTPF has a number of mechanisms that prevent the
overuse of force accounting. The federal government has very
stringent policies on its funds. He is concerned that this
legislation will create additional restrictions that are
unnecessary and will not be in the public interest.
MR. JERRY DRAKE, from Bethel, representing himself, said he is a
member of the city council. The city council passed a resolution
in support of St. Mary's ability to operate a force account. In
his opinion, the purpose of SB 83 is to prevent the possibility of
abusing the force account system. Every dollar pumped out of the
state has checks and balances so that it won't be abused. He
stated that very few communities are able to do a force account
project because they do not have the infrastructure necessary to
support the project. That being the case, force accounts have a
built-in limit already. In his view, anytime the state allows a
community to do a force account project, everybody wins. Every
dollar spent in local wages is spent back in the community and
helps that economy.
MR. STEVE WEAVER, Alaska Native Tribal Health Consortium, said one
of the Consortium's responsibilities is the operation of sanitation
facilities and construction programs in partnership with the 220
federally recognized tribes of Alaska. Most of those projects are
funded through cooperative agreements with multiple federal and
state agencies. Some of those projects include contributions from
DOTPF for improvements, such as boardwalks and access roads. The
local governments that the Consortium works with often select force
accounts as a means of constructing these facilities. Force
accounts are an improved construction option for all of the
Consortium's funding agencies. It is one of several options
available to local governments. The Consortium recommends that
option remain available in the communities' toolboxes.
CHAIRMAN COWDERY announced that no one else wanted to testify and
that he would like to move SB 83 to its next committee of referral.
SENATOR WARD moved SB 83 and its accompanying fiscal note from
committee with individual recommendations.
SENATOR ELTON objected and said that he sees no connection at all
in controlling the use of force accounting by putting an arbitrary
cap on those accounts.
A roll call vote was taken. The motion to move SB 83 from
committee carried with Senators Ward, Taylor, Wilken, and Cowdery
voting "yea," and Senator Elton voting "nay."
| Document Name | Date/Time | Subjects |
|---|