Legislature(2011 - 2012)HOUSE FINANCE 519

03/01/2012 01:30 PM FINANCE


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01:37:17 PM Start
01:37:25 PM SB86
02:16:32 PM Presentation: Port of Anchorage Expansion Project Update
03:47:51 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to a Call of Chair until 03/02/12 --
+ SB 86 PROTECTION OF VULNERABLE ADULTS/MINORS TELECONFERENCED
Moved Out of Committee
+ Port of Anchorage Expansion Project Update TELECONFERENCED
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 307 SUPPLEMENTAL/CAPITAL/OTHER APPROPRIATIONS TELECONFERENCED
<Bill Held Over to 03/02/12>
                  HOUSE FINANCE COMMITTEE                                                                                       
                       March 1, 2012                                                                                            
                         1:37 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
1:37:17 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze called the  House Finance Committee meeting                                                                    
to order at 1:37 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas Jr., Co-Chair                                                                                        
Representative Anna Fairclough, Vice-Chair                                                                                      
Representative Mia Costello                                                                                                     
Representative Mike Doogan                                                                                                      
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative David Guttenberg                                                                                                 
Representative Reggie Joule                                                                                                     
Representative Mark Neuman                                                                                                      
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Bill Streur,  Commissioner, Department of Health  and Social                                                                    
Services;  Kelly  Henriksen,   Assistant  Attorney  General,                                                                    
Human   Services  Division,   Department   of  Law;   Denise                                                                    
Daniella,  Executive Director,  Alaska Commission  on Aging;                                                                    
Marie  Darlin,  American   Association  of  Retired  Persons                                                                    
Alaska (AARP) Task Force; Pat  Luby, American Association of                                                                    
Retired  Persons   Alaska  (AARP)  Alaska;   Steve  Ribuffo,                                                                    
Interim Port Director, Port of  Anchorage; David Pierce, PND                                                                    
Engineers,  Inc.; Jim  Campbell, PND  Engineers; Brad  West,                                                                    
President,   West  Construction;   Emily  Cotter,   Port  of                                                                    
Anchorage.                                                                                                                      
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Scott  Sterling,  Supervising  Attorney for  the  Office  of                                                                    
Elder  Fraud  and  Assistance, Office  of  Public  Advocacy,                                                                    
Department   of   Administration;   Dan   Sullivan,   Mayor,                                                                    
Anchorage.                                                                                                                      
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 307    SUPPLEMENTAL/CAPITAL/OTHER APPROPRIATIONS                                                                             
                                                                                                                                
SB  86    PROTECTION OF VULNERABLE ADULTS/MINORS                                                                                
                                                                                                                                
          CSSB   86  (JUD)(efd   am)was   REPORTED  out   of                                                                    
          committee  with  a  "do pass"  recommendation  and                                                                    
          with   accompanying   previously  published   zero                                                                    
          fiscal notes:  FN9 (DHS), FN10 (ADM),  FN11 (LAW),                                                                    
          FN12 (DPS), FN13 (DPS), FN14 (COR), FN15 (CRT).                                                                       
                                                                                                                                
PRESENTATION:                                                                                                                   
          PORT OF ANCHORAGE EXPANSION PROJECT UPDATE                                                                            
                                                                                                                                
CS FOR SENATE BILL NO. 86(JUD)(efd am)                                                                                        
                                                                                                                                
          "An Act relating to the protection of property of                                                                     
          persons under disability and minors; relating to                                                                      
          the crime of violating a protective order                                                                             
          concerning certain vulnerable persons; relating                                                                       
          to aggravating factors at sentencing for offenses                                                                     
          concerning a victim 65 years or older; relating                                                                       
          to the protection of vulnerable adults; making                                                                        
          conforming amendments; amending Rules 12(h) and                                                                       
          45(a), Alaska Rules of Criminal Procedure, Rule                                                                       
          77, Alaska Rules of Civil Procedure, Rule 17,                                                                         
          Alaska Rules of Probate Procedure, and Rule 9,                                                                        
          Alaska Rules of Administration; and providing for                                                                     
          an effective date."                                                                                                   
                                                                                                                                
1:37:25 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze voiced  the intention of passing  SB 86 out                                                                    
of committee today.                                                                                                             
                                                                                                                                
Representative  Gara   questioned  if  the  bill   had  been                                                                    
previously heard  by the committee. He  indicated having few                                                                    
questions concerning the bill.                                                                                                  
                                                                                                                                
BILL STREUR,  COMMISSIONER, DEPARTMENT OF HEALTH  AND SOCIAL                                                                    
SERVICES, presented a short overview  of the bill. He stated                                                                    
that SB 86  is the governor's bill that  is highly supported                                                                    
by the  Department of Health  and Social Services.  The bill                                                                    
deals with the protection  of vulnerable adults. He declared                                                                    
that  the  senior  population  in Alaska  has  grown  by  70                                                                    
percent since  the last census;  five times the rate  of the                                                                    
rest of  the nation.  He stressed  that the  exploitation of                                                                    
elderly  and   vulnerable  adults  is  a   growing  problem.                                                                    
Although  there are  many types  of exploitation,  financial                                                                    
exploitation by a  trusted family member is one  of the most                                                                    
common. Often abuse victims have  a difficult time accessing                                                                    
the  courts   to  receive   needed  support.   A  "temporary                                                                    
conservator" allows the vulnerable  adult to retain autonomy                                                                    
while   obtaining  emergency   protection.  The   bill  also                                                                    
improves the  ability of the investigating  reports of crime                                                                    
to obtain timely vital information  that will lead to better                                                                    
services for  vulnerable adults  who are  abused, neglected,                                                                    
or exploited and unable to protect their own interests.                                                                         
                                                                                                                                
                                                                                                                                
KELLY HENRIKSEN, ASSISTANT  ATTORNEY GENERAL, HUMAN SERVICES                                                                    
DIVISION, DEPARTMENT OF  LAW, explained that the  bill is in                                                                    
two  parts. The  first part  deals with  the new  concept of                                                                    
"temporary   conservatorship"   and   financial   protective                                                                    
orders.  The second  part  of the  bill  is directed  toward                                                                    
adult protective  services. The  bill updates  the statutes.                                                                    
There  is   an  amendment  of  the   phrase  labeled  "undue                                                                    
influence"  which is  the  main function  of  the bill.  She                                                                    
revealed  that  exploitation  is  an  enormous  problem  for                                                                    
seniors  and vulnerable  adults,  therefore throughout  bill                                                                    
and Alaska  Protective Services (APS)  Code, the  concept of                                                                    
"undue influence"  was added  any place there  is a  list of                                                                    
"reportable  harms."  The  rest  of the  bill  updates  some                                                                    
definitions and  clarifies some of the  investigative powers                                                                    
of  APS. She  disclosed  that  the first  part  of the  bill                                                                    
dealing   with  temporary   conservatorship  and   financial                                                                    
protective orders really  is the core of  the bill, promoted                                                                    
by the  Department of  Public Advocacy.  In Title  13, where                                                                    
conservatorship and  guardianships are dealt with,  there is                                                                    
the  concept  of "temporary  guardian"  so  in an  emergency                                                                    
situation  it  is possible  to  go  and petition  the  court                                                                    
immediately. Within  72 hours, there  is a hearing  before a                                                                    
judge; permanent guardianship will follow.                                                                                      
                                                                                                                                
1:44:50 PM                                                                                                                    
                                                                                                                                
Ms.  Henriksen reiterated  that financial  harm is  the most                                                                    
common  exploitation  to  vulnerable adults.  The  temporary                                                                    
conservatorship  provision,  modeled   after  the  temporary                                                                    
guardianship provision,  allows a  petition to be  filed and                                                                    
heard in  court within  72 hours. The  other section  of the                                                                    
bill deals  with financial protective  orders. The  ex parte                                                                    
financial   protective  order   section  is   modeled  after                                                                    
domestic violence  ex parte  hearings. The  greatest problem                                                                    
occurs when a family member,  who is trusted by a vulnerable                                                                    
adult, is  able to get  money out  of an account  that could                                                                    
subsequently be  drained before anything  is done.  If there                                                                    
is sufficient  evidence of  abuse, it  would be  possible to                                                                    
get a hearing  into the court and obtain  a protective order                                                                    
immediately. If necessary, the  guardianship can be extended                                                                    
six months.                                                                                                                     
                                                                                                                                
Co-Chair Stoltze  equated the financial protective  order to                                                                    
a domestic violence protective  order. Ms. Henriksen replied                                                                    
that was exactly correct.                                                                                                       
                                                                                                                                
Representative Gara  disclosed he  was comfortable  with the                                                                    
bill and  appreciated it being brought  forward. He wondered                                                                    
whether  existing   staff  to  handle  caseloads   would  be                                                                    
sufficient   if  the   legislation  passed.   Ms.  Henriksen                                                                    
responded in the affirmative.                                                                                                   
                                                                                                                                
Representative  Gara remarked  that Representative  Chenault                                                                    
passed a bill that started  the Senior Fraud Protection Unit                                                                    
in the Office  of Public Advocacy. He wondered  if that unit                                                                    
would  be working  with the  attorney general's  office. Ms.                                                                    
Henriksen  answered that  when APS  knows about  a financial                                                                    
fraud  being perpetrated  on an  vulnerable adult,  a report                                                                    
will made to the Senior Fraud Protection Unit.                                                                                  
                                                                                                                                
1:48:15 PM                                                                                                                    
                                                                                                                                
Representative  Gara  surmised  that staff  would  not  have                                                                    
additional duties  under the legislation. Ms.  Henriksen did                                                                    
not believe more staff would be required.                                                                                       
                                                                                                                                
Representative  Guttenberg  pointed  to   page  9,  line  20                                                                    
related   to   the   "employee."  He   wondered   what   the                                                                    
responsibilities were when a person  is mandated as a person                                                                    
who  reports  an  abuse.  Ms.  Henriksen  replied  that  the                                                                    
consequences were  a misdemeanor.  She cautioned that  it is                                                                    
hard to  bring charges against  someone who does  not report                                                                    
an  incident, but  she indicated  that avenue  has not  been                                                                    
pursued.  It is  only meant  to be  an incentive.  She noted                                                                    
that  administrators in  many facilities  often do  not have                                                                    
direct  contact   with  many   of  the   vulnerable  adults.                                                                    
Representative  Guttenberg  asked what  protections  someone                                                                    
might  have   for  reporting  a  situation.   Ms.  Henriksen                                                                    
indicated there would be immunity  if someone made a report.                                                                    
It could be a problem if  someone knowingly did not report a                                                                    
serious situation,  but again  she stated  that circumstance                                                                    
has never been pursued.                                                                                                         
                                                                                                                                
SCOTT  STERLING,  SUPERVISING  ATTORNEY FOR  THE  OFFICE  OF                                                                    
ELDER  FRAUD  AND  ASSISTANCE, OFFICE  OF  PUBLIC  ADVOCACY,                                                                    
DEPARTMENT OF ADMINISTRATION  (via teleconference) indicated                                                                    
that  he was  available  to answer  questions. He  explained                                                                    
that  the bill  will concentrate  new tools  for individuals                                                                    
and state agencies to  combat financial exploitation against                                                                    
vulnerable  adults. The  financial protection  order portion                                                                    
has been adopted  in several states and  has been successful                                                                    
in helping people receive immediate relief.                                                                                     
                                                                                                                                
1:53:27 PM                                                                                                                    
                                                                                                                                
DENISE  DANIELLA, EXECUTIVE  DIRECTOR, ALASKA  COMMISSION ON                                                                    
AGING, supported the bill. She  felt the bill offered strong                                                                    
needed  protection. She  indicated  that there  has been  an                                                                    
increase of more  than 300 percent over the  last five years                                                                    
of substantiated reports to adult protective services.                                                                          
                                                                                                                                
MARIE  DARLIN,  AMERICAN   ASSOCIATION  OF  RETIRED  PERSONS                                                                    
ALASKA  (AARP) TASK  FORCE, commented  that  Pat Luby  would                                                                    
speak first.                                                                                                                    
                                                                                                                                
PAT  LUBY, AMERICAN  ASSOCIATION OF  RETIRED PERSONS  ALASKA                                                                    
(AARP) ALASKA,  pointed out the  increase in  elderly abuse,                                                                    
especially  financial exploitation  perpetrated by  a family                                                                    
member.  He opined  that the  bill was  a great  response to                                                                    
dealing with  the growing problem.  He believed the  bill to                                                                    
be one of  the best examples of  government agencies working                                                                    
together  to help  the citizens  of the  state. He  remarked                                                                    
that institutional  facility staff  is usually the  first to                                                                    
see problems when they arise.                                                                                                   
                                                                                                                                
Ms. Darlin supported the bill. She  believed it to be a good                                                                    
bill addressing  many of the  abuse and  exploitation issues                                                                    
that have been brought forward.                                                                                                 
                                                                                                                                
Co-Chair Stoltze closed public testimony.                                                                                       
                                                                                                                                
1:59:27 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:00:36 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-chair  Fairclough  read  the  zero  fiscal  notes:  FN9                                                                    
(DHS), FN10 (ADM), FN11 (LAW),  FN12 (DPS), FN13 (DPS), FN14                                                                    
(COR), FN15 (CRT).                                                                                                              
                                                                                                                                
Vice-chair  Fairclough MOVED  to report  CSSB (JUD)(efd  am)                                                                    
out  of committee  with individual  recommendations and  the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSSB 86  (JUD)(efd am)was REPORTED  out of committee  with a                                                                    
"do  pass" recommendation  and with  accompanying previously                                                                    
published  zero fiscal  notes: FN9  (DHS), FN10  (ADM), FN11                                                                    
(LAW), FN12 (DPS), FN13 (DPS), FN14 (COR), FN15 (CRT).                                                                          
                                                                                                                                
                                                                                                                                
2:03:58 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:15:25 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
^PRESENTATION: PORT OF ANCHORAGE EXPANSION PROJECT UPDATE                                                                     
                                                                                                                                
2:16:32 PM                                                                                                                    
                                                                                                                                
DAN   SULLIVAN,  MAYOR,   ANCHORAGE  (via   teleconference),                                                                    
summarized the  plans to  date and  why it  was a  good path                                                                    
going  forward. He  declared  that  over 240,000  containers                                                                    
arrive  in  the  Anchorage  port  annually.  The  containers                                                                    
contain goods  that are distributed  to about 85  percent of                                                                    
Alaska's  population.  The  Anchorage  port  has  also  been                                                                    
designated by Department of Defense  as a National Strategic                                                                    
Seaport.  He  wanted to  underscore  the  importance of  the                                                                    
Anchorage  port expansion  project to  upgrade the  50 year-                                                                    
old-port. During the mayor's  transition period into office,                                                                    
reports  came to  him of  significant construction  problems                                                                    
with the  port. In the  last two and  a half years  the work                                                                    
has  been to  determine the  extent  of the  problem and  to                                                                    
determine a path forward. For  the last two seasons removing                                                                    
and   replacing  damaged   areas   has   been  the   primary                                                                    
construction activity.  The delay,  along with  the dramatic                                                                    
increase  in the  cost  of materials  and  the Beluga  whale                                                                    
designation,   has   made    the   project   cost   increase                                                                    
dramatically. He  revealed that to complete  the project the                                                                    
cost has  increased to  over $900 million.  Due to  the high                                                                    
number,  the  mayor  requested   a  scaled  down  design  to                                                                    
accommodate  the primary  shippers  and to  provide for  new                                                                    
business  with the  wet and  dry barge  dock. The  estimated                                                                    
cost  is  $350  million.  He   noted  that  there  had  been                                                                    
misconceptions   of  the   roles   in  different   divisions                                                                    
including  the port,  port  director,  municipality and  the                                                                    
Maritime Administration (MARAD.) He  explained that MARAD is                                                                    
the  federal agency  in charge  of the  construction project                                                                    
who hired  the contractors;  the contractors then  hired the                                                                    
sub-contractors. The  lack of oversight  by the city  in the                                                                    
construction was  a problem. He  indicated that there  was a                                                                    
new  memorandum  of  agreement  with  MARAD  that  sets  new                                                                    
parameters. The  new parameters would now  involve a Project                                                                    
Oversight  Committee,  a   Technical  Committee,  a  Quality                                                                    
Control and  Assurance Program and  the Corps  of Engineers.                                                                    
He  indicated  that  the  most   important  change  was  the                                                                    
contractual   relationship   with   MARAD  and   the   other                                                                    
contractors  has now  been terminated  which will  allow the                                                                    
municipality  of Anchorage  to take  over the  management of                                                                    
the  project. The  city will  now be  able to  contract with                                                                    
different entities  for future contract  management, design,                                                                    
and construction.  He stressed that  the project is  back on                                                                    
track  with  the  only   remaining  component  being  fiscal                                                                    
certainty.  He announced  how pleased  he was  with Governor                                                                    
Parnell's  budget proposal  that included  $200 million  for                                                                    
the Port  of Anchorage.  Mayor Sullivan indicated  that that                                                                    
the  municipality  was  not  tied   to  any  one  method  of                                                                    
financing, but would  leave the decision to  the judgment of                                                                    
the legislature.                                                                                                                
                                                                                                                                
2:24:07 PM                                                                                                                    
                                                                                                                                
STEVE  RIBUFFO, INTERIM  PORT DIRECTOR,  PORT OF  ANCHORAGE,                                                                    
cited the PowerPoint  presentation, "Alaska's Port. Alaska's                                                                    
Future. The Port of Anchorage"  (copy on file). He began the                                                                    
presentation with slide 2: "Facts about the Port":                                                                              
                                                                                                                                
        · The major point of entry for containerized cargo                                                                      
          in  Alaska                                                                                                            
        · Services support over 200 rural communities in                                                                        
          the  State                                                                                                            
        · Annually, 240,000 containers move through the                                                                         
          Port                                                                                                                  
        · Since 2000, an average 4 million tons of goods                                                                        
          and  materials pass through the Port's facilities                                                                     
          annually                                                                                                              
        · 90% of merchandise goods for the Railbelt and                                                                         
          interior Alaska.                                                                                                      
        · 100 million pounds of bypass mail items                                                                               
        · 52,000 vehicles processed annually on average                                                                         
        · 80% of the cement for concrete                                                                                        
                                                                                                                                
Mr. Ribuffo turned to slide  3: "Cargo Distribution Map" the                                                                    
distribution methods  of road, rail, barge  and airplane are                                                                    
shown.  Mr. Ribuffo  noted  that  the distribution  patterns                                                                    
support  over 200  rural communities  with  fuel and  bypass                                                                    
mail deliveries.                                                                                                                
                                                                                                                                
Mr.  Ribuffo  moved  to  slide   4:  "Fuel  Services"  which                                                                    
indicated that  the Anchorage  port is  a major  provider of                                                                    
jet  fuel,  unleaded  gasoline,   heating  oil,  diesel  and                                                                    
aviation  gasoline  for  the  South  Central  region,  rural                                                                    
communities and the state at large.                                                                                             
                                                                                                                                
        · 11 million barrels of fuel annually                                                                                   
        · 2/3 of the jet fuel for Ted Stevens Anchorage                                                                         
          International Airport                                                                                                 
        · 100% of the jet fuel for Joint Base Elmendorf-                                                                        
          Richardson                                                                                                            
        · 2/3 of all fuel used by the military in Alaska                                                                        
        · 1.4 million barrels of fuel shipped from POA to                                                                       
          rural Alaska                                                                                                          
                                                                                                                                
On slide 5: "Fuel Distribution  Map" Mr. Ribuffo pointed out                                                                    
that  the  fuel  from  all  three  state  refineries  passes                                                                    
through the port.  He indicated that the  upper right corner                                                                    
of the  slide listed the  different types of fuel  that pass                                                                    
through the  port and the  color codes matching  the regions                                                                    
of  that  state  to  which  that  fuel  goes.  Fuel  can  be                                                                    
delivered  by tanker,  petroleum  barge,  pipeline, or  rail                                                                    
car.  Two  pipelines  from  the   port  go  to  joint  bases                                                                    
Elmendorf and Richardson and  another pipeline goes directly                                                                    
to Ted Stevens International Airport.                                                                                           
                                                                                                                                
Mr. Ribuffo continued  with slide 6: "The Port  and the U.S.                                                                    
Military,"  stating  that  the  port is  designated  by  the                                                                    
Department of  Defense as a National  Strategic Seaport; one                                                                    
of  only  19  ports  in  the  United  States  to  have  this                                                                    
designation.  Since  2001 the  port  has  supported over  30                                                                    
military deployments  moving over 18,000 pieces  of military                                                                    
equipment for  the U.S.  Army Alaska  and the  United States                                                                    
Transportation command.                                                                                                         
                                                                                                                                
2:28:20 PM                                                                                                                    
                                                                                                                                
Mr. Ribuffo showed in slide  7: "Employment and Payroll" the                                                                    
important  economic engine  that the  port plays  in Alaska,                                                                    
contributing  over $750  million  to the  economy with  some                                                                    
higher estimates  of over one  billion annually.  The annual                                                                    
payroll  from Port  Stakeholders  was  $50 million.  Regular                                                                    
port  operations  create  jobs   for  a  variety  of  trades                                                                    
including longshoremen  operating engineers,  and teamsters.                                                                    
During  the expansion  project 150-200  tradesmen and  women                                                                    
will be directly employed annually.                                                                                             
                                                                                                                                
Mr.  Ribuffo  pointed to  slide  8  "Port Stakeholders"  and                                                                    
revealed the companies that either  lease land from the port                                                                    
or  rely regularly  on port  facilities to  conduct business                                                                    
operations. Horizon  Lines and  Totem Ocean  Trailer Express                                                                    
(TOTE)  are the  two containers  shippers that  call on  the                                                                    
port twice weekly.                                                                                                              
                                                                                                                                
        · Horizon Lines                                                                                                         
        · Totem Ocean Trailer Express (TOTE)                                                                                    
        · Alaska Basic Industries (ABI)                                                                                         
        · Tesoro Alaska                                                                                                         
        · Crowley Marine Services                                                                                               
       · Aircraft Service International Group (ASIG)                                                                            
        · Flint Hills Resources                                                                                                 
        · Alaska Railroad Corporation                                                                                           
        · U.S. Army - Alaska and U.S. Transportation                                                                            
          Command's Surface Deployment & Distribution                                                                           
          Command (SDDC)                                                                                                        
        · Cook Inlet Tug and Barge                                                                                              
                                                                                                                                
Mr. Ribuffo  looked at  slide 9:  "Annual Dock  Tonnage" and                                                                    
explained  that over  the past  ten years  the average  dock                                                                    
tonnage is  around 4 million  tons per year. Dry  Bulk Goods                                                                    
(green) consists  of commodities  such as cement  and steel.                                                                    
Petroleum  Shoreside   (light  blue)  refers   to  petroleum                                                                    
products passing through  the valve yard in  route to either                                                                    
on-port storage facilities or on  the way over the dock, but                                                                    
were initially  delivered to the  port by pipeline  or rail.                                                                    
Petroleum Dockside (dark blue)  refers to petroleum products                                                                    
that pass through  valve yard while entering  or leaving the                                                                    
port and  which are  transported there by  a fuel  tanker or                                                                    
barge.                                                                                                                          
                                                                                                                                
2:30:19 PM                                                                                                                    
                                                                                                                                
Mr. Ribuffo  referred to  slide 10: "Port  that is  50 years                                                                    
old in  a deteriorated condition" and  slide 11: "Intermodal                                                                    
Expansion  Project." In  2011 the  port celebrated  its 50th                                                                    
anniversary;   a  timeline   that  underscores   the  port's                                                                    
deteriorating   condition.   Severe   corrosion   is   found                                                                    
throughout the  facility. A 2011  memo estimated  that there                                                                    
are  1300   pilings  requiring  repairs   due  to   age  and                                                                    
corrosion. Since 2004, 111 pilings  have been repaired at an                                                                    
annual  cost ranging  $750,000 to  $1.6 million.  The annual                                                                    
cost amount  covers approximately 16 pilings.  It would take                                                                    
15 years  to complete  all the  necessary repairs  and would                                                                    
not   be  adding   any   increase   seismic  protection   or                                                                    
modernization of the facilities.                                                                                                
                                                                                                                                
Mr. Ribuffo  moved to  slide 12:  "Project will  replace the                                                                    
current   container  facilities   while  providing   modern,                                                                    
reliable  and expanded  infrastructure for  our future."  He                                                                    
pointed to the  project area that is outlined  in yellow. He                                                                    
noted that  it has been scaled  back and now focuses  on two                                                                    
new barge  berths and two new  ship berths in the  North End                                                                    
of the port.  When completed, the new  facilities will allow                                                                    
the current container  ship tenants to move  their ships off                                                                    
the  old deteriorated  facility into  new larger  and modern                                                                    
berthing  spaces   built  to  a  higher   level  of  seismic                                                                    
stability and operational safety.  The two barge berths will                                                                    
provide   new  economic   and  business   opportunities  for                                                                    
shippers in the region and ready  access to a rail line that                                                                    
will extend  the full length  of the port. He  disclosed the                                                                    
expansion of 65  acres of land for  commercial or industrial                                                                    
use. The combination of increased  berthing space will allow                                                                    
for   better   military  deployments,   accommodate   larger                                                                    
vessels, and  support resource  development projects  in the                                                                    
state and region.                                                                                                               
                                                                                                                                
2:32:49 PM                                                                                                                    
                                                                                                                                
Mr.  Ribuffo listed  in slide  13: "Expanded  Opportunities"                                                                    
the non-tenant  customers who have used  the port facilities                                                                    
within the  past 18  to 24 months.  Under the  categories of                                                                    
New  Customers  it  lists   businesses  that  have  formally                                                                    
indicated their intention of using  the port facilities. The                                                                    
last  section describes  how the  port  facilities could  be                                                                    
used in  the future.  He commented that  everyone recognizes                                                                    
the importance of making logistics  operations at the port a                                                                    
success.                                                                                                                        
                                                                                                                                
Mr.  Ribuffo  directed  attention to  slide  14:  "Funding,"                                                                    
which  would be  through a  combination of  port, state  and                                                                    
federal funds with $331 million received to date:                                                                               
                                                                                                                                
        · Federal Funds $138.7 million                                                                                          
        · State Funds $ 121.3 million                                                                                           
        · Port of Anchorage Funds $ 71.0 million                                                                                
                                                                                                                                
Mr. Ribuffo remarked that the  port also qualifies for a $75                                                                    
million line of  credit and is currently allowed  to draw up                                                                    
to $51  million. Currently  the port  has drawn  $40 million                                                                    
from  the credit  line. The  Port has  also put  $31 million                                                                    
towards the  project from savings  and revenues  since 2001.                                                                    
There    is   currently    $29   million    in   uncommitted                                                                    
appropriations  and the  port is  able to  draw another  $11                                                                    
million on a line of  credit providing a potential access of                                                                    
$40 million.                                                                                                                    
                                                                                                                                
Mr.  Ribuffo provided  a brief  overview of  the project  in                                                                    
slide 15: "Project History:"                                                                                                    
                                                                                                                                
          1999 The Port's 10-year Master Plan recommends an                                                                     
               expansion program to meet future needs.                                                                          
          2003 The Port partners with the U.S. Maritime                                                                         
               Administration (MARAD) to implement the                                                                          
               program.                                                                                                         
          2005 The preferred alternative is selected                                                                            
               (current project design) and the permitting                                                                      
               process begins.                                                                                                  
          2006 Terminal Road Rail Extension and Coast Guard                                                                     
               floating dock completed.                                                                                         
          2007 The project receives final permits.                                                                              
          2008 North and South Backlands filled and                                                                             
               Port/Tidewater Rd. improvements completed.                                                                       
               Bulkhead construction in the northern phase                                                                      
               begins.                                                                                                          
          2009 Dry Barge Berth bulkhead and mooring                                                                             
               complete. Bulkhead construction continues.                                                                       
               The port is made aware of problems in the                                                                        
               spring of 2009.                                                                                                  
          2010 Bulkhead construction halted when the extent                                                                     
               of the damage was revealed.                                                                                      
          2011 Work focused on completing sheet pile                                                                            
               inspections to establish the integrity of                                                                        
               the structure.                                                                                                   
                                                                                                                                
2:37:42 PM                                                                                                                    
                                                                                                                                
Mr. Ribuffo showed in slide  16: "Funds Expended on Project"                                                                    
that  money spent  or obligated  to  date in  all the  areas                                                                    
listed is  $301 million.  Roads have been  dug up  to repair                                                                    
the  problem and  a haul  road was  built to  move earth  to                                                                    
create the 65  acres. He acknowledged that there  had been a                                                                    
misconception that the  total $201 million was  spent in the                                                                    
North End of  the port. The actual money spent  goes back to                                                                    
2003  with  work  on  other parts  of  the  port,  including                                                                    
realigning  all  the roads  to  make  them safer  for  truck                                                                    
traffic and  putting all the utilities  underground. He also                                                                    
confirmed that two miles of rail  track was put on the port,                                                                    
a haul road connecting the  port to joint base Elmendorf and                                                                    
Richardson was  built, and  earth had  been brought  down to                                                                    
create the 65 new acres.                                                                                                        
                                                                                                                                
Mr.  Ribuffo turned  to slide  17:  "Funding," which  showed                                                                    
that  $350  million  of state  funding  still  needed.  Full                                                                    
upfront funding  will allow for  the creation  of multi-year                                                                    
bids and  provide for an  efficiency not  presently enjoyed.                                                                    
The funding  would eliminate  the need  to pay  for constant                                                                    
contractor    mobilization    and   demobilization,    allow                                                                    
contractors  to purchase  materials  at  the best  available                                                                    
prices  and eliminate  the risk  for further  increased cost                                                                    
through delays from lack of funding.                                                                                            
                                                                                                                                
Mr. Ribuffo explained  in slide 18: "Old  Paradigm" that the                                                                    
three  boxes showed  the divided  labor between  the Federal                                                                    
Lead Agency (MARAD), the Project  Owner (Port of Anchorage),                                                                    
the  Project  Manager   (Integrated  Concepts  and  Research                                                                    
Corporation.)                                                                                                                   
                                                                                                                                
2:41:07 PM                                                                                                                    
                                                                                                                                
Mr. Ribuffo  showed the  Old Paradigm  Problems and  the New                                                                    
Paradigm Solutions in slide 19: "New Paradigm":                                                                                 
                                                                                                                                
          The Old Paradigm included:                                                                                            
                                                                                                                                
             · No direct authority  over project contractors                                                                    
               by Port/Muni.                                                                                                    
             · No on-site MARAD representative at Port.                                                                         
             · No  direct  liability or  bonding  protection                                                                    
               for  Port/Muni.                                                                                                  
             · No   Port  directed   construction  oversight                                                                    
               authority.                                                                                                       
                                                                                                                                
          The New Paradigm Solutions include:                                                                                   
                                                                                                                                
             · New    agreement    establishing    oversight                                                                    
               committee.                                                                                                       
             · Established a technical advisory committee.                                                                      
             · On-site MARAD representative.                                                                                    
             · A performance  bond has been  established for                                                                    
               Port/Muni.                                                                                                       
             · On-site   construction  observers   reporting                                                                    
               directly to Port.                                                                                                
             · Direct  involvement  in   quality  control  &                                                                    
               assurance program and monitoring.                                                                                
                                                                                                                                
In September,  2011, the Municipality of  Anchorage signed a                                                                    
new Memorandum  of Agreement with  MARAD shown in  slide 20:                                                                    
"Enacted  Solutions." The  new agreement  provides increased                                                                    
accountability from all parties and ensures local control                                                                       
of  the  project moving  forward.  Mr.  Ribuffo thanked  the                                                                    
committee for their attention.                                                                                                  
                                                                                                                                
2:43:08 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:44:02 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
DAVID PIERCE, PND ENGINEERS,  INC., introduced their company                                                                    
as the  developer of  the OPEN  CELL® TECHNOLOGY  system. He                                                                    
indicated that the  intent was to show the ABCs  of the OPEN                                                                    
CELL system and answer any questions.                                                                                           
                                                                                                                                
JIM  CAMPBELL,  PND   ENGINEERS,  presented  the  PowerPoint                                                                    
program "OPEN  CELL SHEET PILE® Technology"  (copy on file.)                                                                    
He explained  that the  port of Anchorage  has an  OPEN CELL                                                                    
design  which   uses  sheet  pile  filled   with  gravel  to                                                                    
construct  the  dock. In  slide  1:  "OPEN CELL  Sheet  Pile                                                                    
Retaining  Wall  System" he  explained  that  the open  cell                                                                    
design was developed for Alaska in the early 80s.                                                                               
                                                                                                                                
Co-Chair Stoltze  asked how long  PND Engineers had  been on                                                                    
the project. Mr. Campbell replied from early 2005.                                                                              
                                                                                                                                
Mr.  Campbell continued  that the  system  consists of  flat                                                                    
piles which  link together as  shown in slide 2:  "OPEN CELL                                                                    
Components."  PND  Engineers  design the  OPEN  CELL  system                                                                    
using flat  sheet pile with  extruded or  welded connectors.                                                                    
In the upper left corner of  the slide the example shows the                                                                    
face  sheets  and the  Tailwall  back  from the  Y-cell.  He                                                                    
explained  the   engineering  components  of   internal  and                                                                    
external  stability  in  slide   3:  "OPEN  CELL  Structural                                                                    
Stability." He  stressed that if not  designed correctly the                                                                    
wall could  be over  stressed and that  would then  fail the                                                                    
internal structure. The entire  cellular structure acts as a                                                                    
large cohesive  block. He pointed  out that due to  the port                                                                    
of Anchorage  being in  a huge  seismic area,  the Tailwalls                                                                    
were extended for more stabilization.                                                                                           
                                                                                                                                
2:49:46 PM                                                                                                                    
                                                                                                                                
Mr. Campbell  referred to the  retaining wall which  is also                                                                    
called  the  Mechanically  Stabilized  Embankment  (MSE)  or                                                                    
reinforced  earth. The  soil carries  a  lot of  compression                                                                    
loads then  is reinforced  with steel  for tension  load. He                                                                    
equated  the process  to reinforced  concrete. Mr.  Campbell                                                                    
directed  attention  to  slide 4:  "OPEN  CELL  Performance"                                                                    
where he stressed that the  long term durability of the dock                                                                    
comes down  to corrosion.  An advantage to  the system  is a                                                                    
lot of the structure is  contained back within the fill, not                                                                    
exposed to  Cook Inlet corrosion,  and the face  sheets have                                                                    
been  galvanized  to  make them  more  corrosion  resistant.                                                                    
Corrosion is worse at the  low tideline. The Tailwall Length                                                                    
is how  the wall is designed  for seismic load. The  port of                                                                    
Anchorage has long  Tailwalls to allow for  the high seismic                                                                    
safety factor.                                                                                                                  
                                                                                                                                
2:52:44 PM                                                                                                                    
                                                                                                                                
Mr.  Campbell moved  to slide  5  "Open Cell:  Applications"                                                                    
that  showed   four  pictures  of   the  OPEN   CELL  system                                                                    
applications.  He  pointed  to  slide 6  "OPEN  CELL  System                                                                    
Locations" depicting system  locations. OPEN CELL structures                                                                    
could be  found around  the world,  with over  185 completed                                                                    
structures.  He pointed  out that  the  structures are  cost                                                                    
effective  and incredibly  strong.  He revealed  in slide  7                                                                    
"Kloosterboer  Dutch Harbor  Marine  Terminal Dutch  Harbor"                                                                    
that  Dutch  Harbor  has  the   same  seismic  barometer  as                                                                    
Anchorage.  He  pointed to  a  picture  of the  construction                                                                    
sequence of  an OPEN  CELL structure  located in  the bottom                                                                    
left corner.  He signified  that closed  cells do  not allow                                                                    
for an  extension of the  Tailwalls which would not  make it                                                                    
the practical choice in high seismic environments.                                                                              
                                                                                                                                
2:57:34 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze requested  that Mr.  Campbell move  to the                                                                    
most important areas due to the limited schedule.                                                                               
                                                                                                                                
Mr. Campbell  moved to slide  8: "Port MacKenzie  Deep Draft                                                                    
Dock,  Cook  Inlet,  AK"  emphasizing   the  project  was  a                                                                    
successful  project  built very  quickly  and  at low  cost.                                                                    
Material  below the  waterline  were "vibracompacted"  while                                                                    
upper  layers  were roller  compacted.  In  the upper  right                                                                    
corner  he  pointed  out construction  cells.  Mr.  Campbell                                                                    
continued  to slide  9:  "Liberty  SDI Development,  Prudhoe                                                                    
Bay, AK" discussing  the use in the North  Slope region. Due                                                                    
to  the ice  conditions, the  pile supported  docks are  not                                                                    
strong  enough,  therefore  almost all  structures  in  that                                                                    
region are  bulkhead type docks.  In the upper  right corner                                                                    
of the  slide he pointed  to a  large module landing  at the                                                                    
port.   He  moved   to  slide   10:  "Owensboro   Riverwall,                                                                    
Owensboro, KY"                                                                                                                  
                                                                                                                                
Vice-chair  Fairclough requested  he  advance  to slide  20:                                                                    
"OPEN  CELL Technology:  Unique Applications,  Skagway, AK."                                                                    
She acknowledged  that PND  Engineers have  been responsible                                                                    
for a  series of  designs, but  Skagway has  technology with                                                                    
unique  applications.   Mr.  Campbell  indicated   that  the                                                                    
purpose  of the  Skagway  slide was  to  show the  structure                                                                    
features which are incredibly durable and flexible.                                                                             
                                                                                                                                
3:01:34 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze  requested  a  summarization  of  how  the                                                                    
technology works  with the port  of Anchorage.  Mr. Campbell                                                                    
responded  that  he wanted  to  provide  an explanation  and                                                                    
background   of  the   design   perimeters   for  a   better                                                                    
understanding.                                                                                                                  
                                                                                                                                
3:03:04 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:04:54 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Co-Chair Thomas reconvened the meeting.                                                                                         
                                                                                                                                
BRAD WEST, PRESIDENT, WEST  CONSTRUCTION, indicated that his                                                                    
company had  been working on  the port of Anchorage  for the                                                                    
past few years.  He noted that his contract  is complete and                                                                    
has been demobilized. He wanted  to speak on issues that had                                                                    
been in the  press and provide some  accurate information in                                                                    
going  forward with  funding the  project. He  expressed his                                                                    
confidence  that the  port  project can  be  built with  the                                                                    
design. The important  point is how it is  installed and the                                                                    
techniques  that are  used. He  explained that  two reports,                                                                    
now  being  produced, will  be  the  final opinion  of  what                                                                    
happened at the port.                                                                                                           
                                                                                                                                
Mr. West  commented in slide  1: "Who is  West Corporation?"                                                                    
that West Construction is an  Alaska based marine contractor                                                                    
with   over   30  years   of   experience   in  OPEN   CELL®                                                                    
construction.   West   Corporation   has  more   OPEN   CELL                                                                    
experience than any other contractor;  22 OPEN CELL projects                                                                    
to  date. He  also mentioned  that the  last container  port                                                                    
facilities   projects  built   in  Alaska   were  successful                                                                    
projects constructed  by West  Construction. He  pointed out                                                                    
that the  port of  Anchorage is a  difficult site  with high                                                                    
tides  and  many  other  issues. He  referred  to  slide  2:                                                                    
"Unalaska  Marine Center  1991"  showing  the Horizon  Lines                                                                    
that also uses the port  of Anchorage. In slide 3: "American                                                                    
President Lines" he pointed to  the port in Dutch Harbor, AK                                                                    
that is used for the  international trade. He also mentioned                                                                    
work  in Cook  Inlet with  oil platforms  and the  Knick and                                                                    
Matanuska bridges.                                                                                                              
                                                                                                                                
Mr. West  stressed in slide 4:  "What went wrong at  port of                                                                    
Anchorage"  that  a  strong management  team  is  needed  to                                                                    
handle issues at  the port to go forward in  the future. The                                                                    
Anchorage port has  40 foot tides, fast  currents, heavy ice                                                                    
and   environmental   considerations   that   need   to   be                                                                    
appreciated as the work moves  forward. In his experience it                                                                    
is better to  keep the fill away from the  face as the sheet                                                                    
pile are being  installed to keep the  soil pressure neutral                                                                    
on the sheet pile. Had  the previous port work been properly                                                                    
done there might  not have been some of  the problem issues.                                                                    
West  Construction's initial  project  was  to complete  the                                                                    
bulkheads that had been started  by the previous contractor.                                                                    
There were four connection  points to complete the bulkhead,                                                                    
unfortunately when  the sheets  were pulled  up to  make the                                                                    
connections; a  lot of  damage was  revealed. (The  next few                                                                    
slide  show  pictures of  damage.)  He  explained that  when                                                                    
dealing with  government entities it  takes a long  time for                                                                    
changes to be understood and  then more time tofind the best                                                                    
way forward.  He indicated that  he wanted to  show examples                                                                    
of how  the work can  be constructed successfully.  He moved                                                                    
to  slide  9:  "Sample  Project Showing  Proper  Land  Based                                                                    
Approach,  Dutch Harbor  Ports, Dock  Facility" to  show and                                                                    
explain  pictures through  to slide  14. He  noted that  the                                                                    
control  placement of  the fill  is  the key  to success  of                                                                    
these jobs.  Once the grade  is brought up, it  is compacted                                                                    
well so  that there  is no settlement  and then  a vibratory                                                                    
compaction is  done to  speed up  any long  term settlement.                                                                    
The structures  shown in the  pictures took  eleven calendar                                                                    
months;  nine  months  on-site. It  shows  a  thousand  foot                                                                    
bulkhead with  a one hundred  year design life and  a twenty                                                                    
five hundred year seismic zone.                                                                                                 
                                                                                                                                
3:12:58 PM                                                                                                                    
                                                                                                                                
Mr. West moved  to the next project starting  with slide 15:                                                                    
"Sample Project Showing Water Based  Bar Approach, Iraq" and                                                                    
pictures  of  the  projects in  the  following  slides.  The                                                                    
design is  an OPEN CELL  structure from the  waterside which                                                                    
is  the   company's  recommendation  on  how   the  port  of                                                                    
Anchorage should  proceed. slide 17  shows a diagram  on how                                                                    
the company  recommends the  fill be placed  at the  port of                                                                    
Anchorage and slide 18 shows  the soil pressures against the                                                                    
face and  the distortion caused.  In slide 19,  he commented                                                                    
on  the busy  site with  a multi-national  working crew.  He                                                                    
indicated  how  impressed the  people  were  with the  skill                                                                    
level and hard work of the  American workers. On slide 22 he                                                                    
pointed out soil issues and access  to the work. In Iraq the                                                                    
soil was  soft and bridges  needed to be constructed  to get                                                                    
the  fill to  the face.  In slide  23 a  conveyor system  is                                                                    
shown.                                                                                                                          
                                                                                                                                
3:16:37 PM                                                                                                                    
                                                                                                                                
Mr. West  explained that an  issue at the port  of Anchorage                                                                    
was dense soils or armor rock,  but a simple solution was to                                                                    
dig  it  out. Then  the  space  is replaced  with  competent                                                                    
backfill material which  alleviates a lot of  the issues. He                                                                    
was proud to show on slide  8 that the project was given the                                                                    
2011 AGC International Construction  Project of the year. He                                                                    
then moved  to slide  29: "Current Status  of POA:  where we                                                                    
are  and what  we know."  He explained  that development  of                                                                    
work plans and techniques  that deal with difficult existing                                                                    
site conditions.  They successfully installed 900  sheets in                                                                    
2010  and  verified  they  were  driven  without  damage  in                                                                    
locations  where   the  cells  had  previously   failed.  He                                                                    
believed that  the OPEN CELL  design is appropriate  for the                                                                    
Anchorage site  if it is  installed properly. He  also noted                                                                    
that  future  steps have  been  identified  to mitigate  the                                                                    
remaining damage  and successfully complete the  project. He                                                                    
pointed out in  slide 30 a very active  construction site in                                                                    
2010.  The  pictures show  a  combination  of the  off-shore                                                                    
construction equipment with the  land based equipment taking                                                                    
over. slide  31 shows the  Tailwalls and the work  that goes                                                                    
along with  it. The  posts are  able to  drive into  a slope                                                                    
because the soil pressure on  either side of the Tailwall is                                                                    
neutral due  to it being on  the same grade. Mr.  West moved                                                                    
to  the  picture  on  the  left  of  slide  32  showing  the                                                                    
coordination between  the offshore  and shore  activity. The                                                                    
picture on  the right  showed some of  the armor  rock found                                                                    
that needed to be dug out.                                                                                                      
                                                                                                                                
3:20:39 PM                                                                                                                    
                                                                                                                                
Mr. West referred to some of the causes of failure.                                                                             
                                                                                                                                
Co-Chair Stoltze  interjected that the failures  were before                                                                    
Mr. West's  company started. Mr. West  acknowledged that was                                                                    
true. slide 33: "Summary of Causes for Failure":                                                                                
                                                                                                                                
   · Difficult site requires a qualified and highly                                                                             
     experienced team.                                                                                                          
  · Improper means and methods used on previous contract.                                                                       
   · Poor communication and complicated management process.                                                                     
   · No clear chain of command and dysfunctional decision                                                                       
     making process                                                                                                             
   · No Accountability                                                                                                          
   · Federal Agency, Construction Management Firm and                                                                           
     previous Contractor were not prepared to meet the                                                                          
     challenges of this difficult of a project.                                                                                 
   · The process has been the goal, not the success of the                                                                      
     project.                                                                                                                   
                                                                                                                                
Mr.  West urged  the committee  to  look forward  and use  a                                                                    
"best value"  contracting approach so that  the municipality                                                                    
or state has  a say in the selection of  the contractor. The                                                                    
contractor  submits  the  money  costs, but  also  needs  to                                                                    
provide their  work history,  work plan,  resumes, financial                                                                    
capabilities  and  all the  other  things  to be  considered                                                                    
before  awarding a  contract. He  also thought  it important                                                                    
that  the  project be  managed  and  controlled locally.  An                                                                    
experienced  construction  or  engineering  firm  should  be                                                                    
hired  to  oversee  the  project   to  make  sure  that  the                                                                    
contractors are  performing and that  there is  oversight of                                                                    
quality  issues.  He stressed  that  the  port of  Anchorage                                                                    
project is  too important to fail.  He agreed that a  lot of                                                                    
expensive  lessons  had  been learned  and  urged  that  the                                                                    
funding be  moved forward so  that the important  port could                                                                    
be completed.                                                                                                                   
                                                                                                                                
Co-Chair  Stoltze asked  whether Mr.  West had  purposefully                                                                    
not dwelled on  what went wrong with the  port of Anchorage.                                                                    
Mr. West replied that he did  not want to dwell on the past,                                                                    
but move forward to the future.                                                                                                 
                                                                                                                                
3:23:40 PM                                                                                                                    
                                                                                                                                
Co-Chair  Thomas asked  whether  Ron Martin  had worked  for                                                                    
him. Mr. West responded  in the affirmative. Co-Chair Thomas                                                                    
told a personal  story. He wondered why the  problems on the                                                                    
port of  Anchorage were allowed  to go  on for so  long. Mr.                                                                    
West could not answer the question.                                                                                             
                                                                                                                                
3:26:37 PM                                                                                                                    
                                                                                                                                
Representative Gara  asked Mr. Ribuffo how  much the project                                                                    
would  cost  over the  long  term.  He noted  that  Governor                                                                    
Sheffield had  the cost  at $1.2 billion,  now the  cost has                                                                    
been scaled back. He wanted to  know how much money would be                                                                    
required  from  the  state. Mr.  Ribuffo  replied  that  the                                                                    
municipality's  request   from  the  legislature   was  $350                                                                    
million and  no more. Representative Gara  asked whether the                                                                    
amount would  cover all future costs.  Mr. Ribuffo responded                                                                    
that the  costs would  cover the North  End of  the project.                                                                    
Future   monies   would    be   for   whatever   maintenance                                                                    
requirements are needed for the  entire port which hopefully                                                                    
can be  funded from  the profits. Representative  Gara noted                                                                    
that the North End covered a  huge amount of dock space, but                                                                    
the Middle  and South  parts were  also important.  He noted                                                                    
that the  South End is  fuel storage and would  require $350                                                                    
million and  the Middle Section  where the port  building is                                                                    
located is also in need  of repair. Mr. Ribuffo replied that                                                                    
the project had  been scaled back to include  only the North                                                                    
End and the remainder of the  port will be maintained in its                                                                    
current  configuration.  Representative Gara  asked  whether                                                                    
the company was committing to  no further money requests for                                                                    
the Middle and South Ends.                                                                                                      
                                                                                                                                
EMILY COTTER,  PORT OF ANCHORAGE,  responded that  the mayor                                                                    
of Anchorage  had committed to  one funding request  of $350                                                                    
million. Representative  Gara responded that  the commitment                                                                    
related only to Mayor Sullivan's  request and the port would                                                                    
outlive the  mayor's term  in office.  He reiterated  if the                                                                    
port would  be coming back  to request another  $350 million                                                                    
for the South and Middle  End. Mr. West responded that there                                                                    
were  no  plans   to  come  back  to   the  legislature  for                                                                    
additional funds.                                                                                                               
                                                                                                                                
3:30:43 PM                                                                                                                    
                                                                                                                                
Representative Gara asked Mr. West  whether it would be less                                                                    
expensive  to  require  future contractors  to  guarantee  a                                                                    
price with  a bond. Mr.  West responded in  the affirmative.                                                                    
There should be a payment  performance bond where there is a                                                                    
requirement that the contractor finish  the work and pay the                                                                    
bills. If the contractor does  not complete the work, then a                                                                    
surety  steps in  to  finish the  work or  pay  out a  large                                                                    
check. Representative Gara asked  for a statement in writing                                                                    
that  would  guarantee the  legislature  that  there was  no                                                                    
intent to request any funds  past the $350 million. Mr. West                                                                    
replied that he would have  to discuss the matter with Mayor                                                                    
Sullivan and the municipal manager.                                                                                             
                                                                                                                                
Vice-chair    Fairclough   echoed    concerns   voiced    by                                                                    
Representative Gara  related to the mayor's  term in office.                                                                    
She argued  that the mayor  could only submit a  letter good                                                                    
for his  term of office  and not  for the future.  She asked                                                                    
the municipality  if they were  making payments to  the line                                                                    
of credit  and, if they  are, who is making  those payments.                                                                    
Mr. Ribuffo  said the line of  credit is being paid  by port                                                                    
revenue.  Vice-chair Fairclough  questioned  the terms.  Mr.                                                                    
Ribuffo responded that  it varies. The paper  is rolled over                                                                    
from 90  to 180  days. The  interest is  paid when  it rolls                                                                    
over. Vice-chair Fairclough  asked in a given  year how much                                                                    
can be  spent. Mr.  Ribuffo replied that  it depends  on the                                                                    
planning  and design  in any  given year.  The $350  million                                                                    
request came  from a preliminary design,  but expressed that                                                                    
he was  not comfortable committing  to a number  right away.                                                                    
Vice-chair  Fairclough  noted it  would  be  helpful to  the                                                                    
committee to know what can  be spent each year. She wondered                                                                    
if the loan needed  to be paid off. She asked  Mr. West if a                                                                    
contractor was bidding  on a mega project such  as this one,                                                                    
what would be  the spend rate. Mr. West  responded these are                                                                    
political  questions  and he  hesitated  to  answer. He  did                                                                    
answer that  in the  first year  of the  project there  is a                                                                    
well-known program that needs  to be completed. The existing                                                                    
North  End bulkheads  have large  openings that  need to  be                                                                    
finished. A lot of planning  is needed and stakeholders need                                                                    
to be involved. He quoted a $100 million burn rate a year.                                                                      
                                                                                                                                
3:38:11 PM                                                                                                                    
                                                                                                                                
Mr. Ribuffo  interjected that  the municipal  manager online                                                                    
may have a better take on the figure.                                                                                           
                                                                                                                                
Co-Chair Stoltze  responded that the municipal  manager, the                                                                    
mayor, and  others should  get together to  look at  all the                                                                    
scenarios. He  believed those individuals  would be  able to                                                                    
give the legislature a number.                                                                                                  
                                                                                                                                
Vice-chair  Fairclough thanked  all for  the concerns  being                                                                    
raised, but wanted reassurance that  the mayor was not going                                                                    
to return to the legislature asking for more money.                                                                             
                                                                                                                                
3:39:57 PM                                                                                                                    
                                                                                                                                
Representative Neuman understood the  importance of the port                                                                    
of Anchorage,  but was concerned  that the 50 year  old port                                                                    
may be  vulnerable to a  sizeable earthquake. He  asked what                                                                    
would  be  considered  a  sizeable  earthquake.  Ms.  Cotter                                                                    
responded that she  would be happy to  provide the committee                                                                    
with that information. Seismic stability  is approached in a                                                                    
different method  in the construction business.  It outlines                                                                    
each  level of  the dock  and possible  damage at  different                                                                    
levels of earthquakes.                                                                                                          
                                                                                                                                
3:42:12 PM                                                                                                                    
                                                                                                                                
Representative  Doogan voiced  that  his  concerns were  the                                                                    
same as  Vice-chair Fairclough  and Representative  Gara. He                                                                    
agreed that  the amount  of money requested  may not  be all                                                                    
the money that will be requested  over the next 50 years. He                                                                    
stressed that  there needs to  be a guarantee that  the work                                                                    
will be completed, the total  amount it will cost, and other                                                                    
relevant  assurances put  into  a written  document. He  was                                                                    
concerned about  the success of  the port, but not  ready to                                                                    
just go  with any number  thrown out. He believed  a written                                                                    
guarantee  is required  stating that  the port  will not  be                                                                    
requesting any more than the $350 million.                                                                                      
                                                                                                                                
Co-Chair Stoltze thanked the presenters.                                                                                        
                                                                                                                                
3:47:51 PM                                                                                                                    
                                                                                                                                
RECESS TO CALL OF THE CHAIR                                                                                                     
                                                                                                                                
[Secretary Note: The meeting was adjourned at 1:37:10 PM on                                                                     
March 2, 2010 with no further action.]                                                                                          

Document Name Date/Time Subjects
Talking Points for SB 86.pdf HFIN 3/1/2012 1:30:00 PM
SB 86
SB86 Gov Transmittal Letter.pdf HFIN 3/1/2012 1:30:00 PM
SB 86
Port of Anchorage Presentation 3.1.12.pdf HFIN 3/1/2012 1:30:00 PM
PND OPEN CELL Alaska Legislature 3-01-2012.pdf HFIN 3/1/2012 1:30:00 PM
PIEP October 2011 Quarterly Report copy.pdf HFIN 3/1/2012 1:30:00 PM
PIEP 4th Quarter Report 2011 copy.pdf HFIN 3/1/2012 1:30:00 PM
Legislative Presentation PDF Final.pdf HFIN 3/1/2012 1:30:00 PM
Alaska's Lifeline- POA Cargo Distribtution .pdf HFIN 3/1/2012 1:30:00 PM
SB86 AARP Letter.pdf HFIN 3/1/2012 1:30:00 PM
SB 86
CSSB 86 Sectional Analysis 2-29-12.pdf HFIN 3/1/2012 1:30:00 PM
SB 86
PND Open Cell Literature.pdf HFIN 3/1/2012 1:30:00 PM
SB 86 HB 150 comparison 3-1-12.pdf HFIN 3/1/2012 1:30:00 PM
HB 150
SB 86