Legislature(2011 - 2012)CAPITOL 17

03/31/2011 01:00 PM House TRANSPORTATION


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01:06:13 PM Start
01:06:54 PM Presentation by the Denali Commission
02:07:28 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Presentation by the Denali Commission TELECONFERENCED
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
            HOUSE TRANSPORTATION STANDING COMMITTEE                                                                           
                         March 31, 2011                                                                                         
                           1:06 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Peggy Wilson, Chair                                                                                              
Representative Lance Pruitt, Vice Chair                                                                                         
Representative Eric Feige                                                                                                       
Representative Cathy Engstrom Munoz                                                                                             
Representative Max Gruenberg                                                                                                    
Representative Pete Petersen                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Craig Johnson                                                                                                    
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
PRESENTATION BY THE DENALI COMMISSION                                                                                           
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JOEL NEIMEYER, Federal Co-Chair                                                                                                 
Denali Commission                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Presented a PowerPoint on the Denali                                                                     
Commission's Transportation Program.                                                                                            
                                                                                                                                
CHUCK POOL, Member                                                                                                              
Transportation Advisory Committee                                                                                               
Denali Commission                                                                                                               
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT:  Presented a PowerPoint overview of the                                                                   
Denali Commission.                                                                                                              
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:06:13 PM                                                                                                                    
                                                                                                                                
CHAIR PEGGY WILSON called the House Transportation Standing                                                                   
Committee meeting to order at 1:06 p.m. Representatives Wilson,                                                                 
Munoz, Feige,  and Petersen  were present at  the call  to order.                                                               
Representatives Pruitt  and Gruenberg arrived as  the meeting was                                                               
in progress.                                                                                                                    
                                                                                                                                
^Presentation by the Denali Commission                                                                                          
             Presentation by the Denali Commission                                                                          
1:06:54 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON  announced that the only order  of business would                                                               
be a presentation by the Denali Commission.                                                                                     
                                                                                                                                
1:07:10 PM                                                                                                                    
                                                                                                                                
JOEL  NEIMEYER, Federal  Co-Chair, Denali  Commission, introduced                                                               
himself.                                                                                                                        
                                                                                                                                
CHUCK  POOL, Member,  Transportation  Advisory Committee,  Denali                                                               
Commission, introduced himself.                                                                                                 
                                                                                                                                
1:08:23 PM                                                                                                                    
                                                                                                                                
MR.    NEIMEYER   reported    that   the    Denali   Commission's                                                               
Transportation Program  is managed by Tessa  DeLong of Ketchikan,                                                               
and is supported  by a longstanding contractor,  Mike McKinnon of                                                               
Juneau,  and program  assistant  Adison Smith  of Ketchikan,  who                                                               
have provided project and program support.                                                                                      
                                                                                                                                
MR.   NEIMEYER  referred   to  a   photo  of   Kongiganak,  which                                                               
illustrates  a  good indication  of  the  types of  projects  the                                                               
Denali Commission funds  [slide 1].  Along the  river's edge, the                                                               
Kongiganak  Barge   Landing  Facility  highlights  the   type  of                                                               
waterfront  project the  Denali Commission  funds.   Most of  the                                                               
community projects are situated along  the water as a conduit for                                                               
commerce.   The Denali Commission  has also funded  road projects                                                               
within the Kongiganak community.   The airstrip in the background                                                               
is  not part  of the  Denali Commission's  Transportation program                                                               
since   the   airstrips   are    under   the   Federal   Aviation                                                               
Administration's  (FAA)   jurisdiction  or  are   state  operated                                                               
airstrips.  He recapped that  the Denali Commission's engagements                                                               
in rural Alaska projects are waterfront and road projects.                                                                      
                                                                                                                                
1:10:06 PM                                                                                                                    
                                                                                                                                
MR.  NEIMEYER  related  the three  different  types  of  regional                                                               
commissions [slide 2].  The  "grandfather" regional commission is                                                               
the Appalachian Regional Commission,  which has been in existence                                                               
since  1965 and  consists of  13 states.   The  Denali Commission                                                               
represents  only one  state, whereas  the Delta  Region Authority                                                               
represents five  states.   These regions  are highlighted  on the                                                               
slide  since  they  represent the  most  active  and  functioning                                                               
regional commissions within government.   The regional commission                                                               
model  is  a  model  the   government  has  which  focuses  on  a                                                               
particular geographic  area, generally  because of  low-income or                                                               
poverty.  Of  the six regional commissions in the  Lower 48, only                                                               
two are  really active.   The other  four have the  authority but                                                               
have not yet received any funding [slide 3].                                                                                    
                                                                                                                                
1:11:41 PM                                                                                                                    
                                                                                                                                
MR. NEIMEYER  stated that the  Denali Commission Act of  1998 was                                                               
the late U.S.  Senator Ted Steven's vision.   Since its inception                                                               
the  Denali Commission  has funded  nearly 2,000  projects for  a                                                               
total cost  of $1 billion.   The  agency is an  independent quasi                                                               
federal-state   agency.     About  40   percent  of   the  Denali                                                               
Commission's work is managed by the  SOA.  The SOA has brought in                                                               
leverage  funding  to  some  projects.    The  Denali  Commission                                                               
employs certain, specific principles  including that it maintains                                                               
a  small  staff  and  uses existing  programs  to  run  projects.                                                               
Instead  of  building  up an  administrative  infrastructure  for                                                               
itself,  the  Denali  Commission  relies  on  and  uses  existing                                                               
infrastructure such as the Department  of Transportation & Public                                                               
Facilities'  (DOT&PF)  engineers.    Thus, as  funding  ebbs  and                                                               
flows, the  Denali Commission  should not be  in the  position of                                                               
wondering what to do with its staff.                                                                                            
                                                                                                                                
MR. NEIMEYER  related one key  thing about the  Denali Commission                                                               
is that  the decisions on  projects are made  in Alaska.   Of the                                                               
seven commissioners,  six commissioners  are non-federal  and one                                                               
is federal.   The Congress has decided that  Alaskans will decide                                                               
how  to  spend  these  funds,  he said.    Therefore,  while  the                                                               
Congress appropriated  $100 million  it did  not specify  how the                                                               
funds should be spent, such  as to construct the Kongiganak Barge                                                               
Landing Facility.   Alaskans  decided which  project to  fund and                                                               
chose to  construct the  Kongiganak Barge  Landing Facility.   He                                                               
offered his  belief that this  is the "magic" of  the commission.                                                               
The model works in two  streams: one stream is the commissioners,                                                               
who   address  all   things  non-transportation.     The   Denali                                                               
Commission Act  provides another  body, the  advisory committees,                                                               
such  as the  Transportation Advisory  Committee, which  provides                                                               
advice,   guidance,   and   recommendations   on   transportation                                                               
projects.   He recapped that  the two bodies work  in conjunction                                                               
with one another [slide 4].                                                                                                     
                                                                                                                                
1:14:34 PM                                                                                                                    
                                                                                                                                
MR.  NEIMEYER pointed  out  the chart  shows that  in  FY 05  the                                                               
Denali  Commission  rose to  $140  million  although funding  has                                                               
since declined.   In FY  10, the Denali Commission's  funding was                                                               
nearly  $60 million.    While  the funding  for  FY  11 is  still                                                               
uncertain,  he  anticipated  $40 million  would  be  appropriated                                                               
[slide 5].                                                                                                                      
                                                                                                                                
MR. NEIMEYER  discussed the  Denali Commission's  active programs                                                               
[slide 6].   He highlighted that its  Transportation Program came                                                               
from an  amendment to the  Denali Commission Act,  which required                                                               
an  emphasis on  roads and  waterfront  projects.   In 1999,  the                                                               
Denali Commission developed its own  energy program.  The primary                                                               
purpose of  the Denali Commission's  initial efforts  was focused                                                               
on addressing leaking  bulk fuel tanks in rural Alaska.    If the                                                               
U.S.  Coast Guard  or the  Environmental Protection  Agency (EPA)                                                               
followed through on some of  their concerns by shutting down fuel                                                               
delivery, it  would have effectively  shut down  the communities,                                                               
he said.   Fuel is the lifeblood of these  communities since fuel                                                               
provides electricity,  heat and other needs  for the communities.                                                               
U.S. Senator Stevens saw the need  to address these projects.  Of                                                               
the $1 billion  in funding, nearly $300 to $400  million has been                                                               
dedicated  to  resolving  bulk  fuel issues  in  upwards  of  100                                                               
communities thus far, he stated.                                                                                                
                                                                                                                                
1:16:39 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON asked for  clarification on the percentage of the                                                               
bulk fuel cleanup projects that have been completed.                                                                            
                                                                                                                                
MR.  NEIMEYER  responded  that the  Denali  Commission  routinely                                                               
develops  a  "universe of  need"  whether  the projects  are  for                                                               
clinic  programs or  bulk fuel  storage or  cleanup.   The Denali                                                               
Commission looks  to all  the communities  that are  eligible and                                                               
tries  to identify  whether the  issues have  been addressed  and                                                               
defines any  barriers.  He  estimated that the  Denali Commission                                                               
has completed  bulk fuel cleanup  in all but 30  communities with                                                               
bulk fuel issues.  He  speculated that the Denali Commission will                                                               
probably  reach the  point when  it will  need to  decide whether                                                               
some  communities   are  declining  and  are   no  longer  viable                                                               
communities.   He remarked that  sometimes the  Denali Commission                                                               
must make tough decisions.                                                                                                      
                                                                                                                                
CHAIR P. WILSON  offered her belief that  sustainability would be                                                               
a big issue.                                                                                                                    
                                                                                                                                
MR. NEIMEYER agreed.   He stated that if communities  do not have                                                               
the  administrative capacity,  then  the  Denali Commission  must                                                               
first address  that issue prior  to resolving  the infrastructure                                                               
problem.  He related that early  on the Denali Commission made an                                                               
intentional choice  to develop new  bulk fuel facilities  and not                                                               
remove the  bulk tank farms  and renovate the brown  field sites.                                                               
The Denali  Commission chose  to focus its  limited funds  on the                                                               
problem of failing farms.  He  stated that of the 100 communities                                                               
served,  the potential  exists for  some 400  existing bulk  fuel                                                               
farm eyesores that are not yet addressed.                                                                                       
                                                                                                                                
1:19:00 PM                                                                                                                    
                                                                                                                                
MR.  NEIMEYER   moved  from  bulk   fuel  to  power   plants  and                                                               
transmission lines,  which he  related as  core operations.   The                                                               
Denali  Commission has  expanded on  the state's  alternative and                                                               
renewable energy  efforts.  The  Denali Commission had  a request                                                               
for  proposal  (RFP)  process for  alternative  energy  projects,                                                               
which resulted in an overwhelming  response.  The legislature has                                                               
significantly  funded  these  projects.     He  highlighted  this                                                               
illustrates  how the  Denali Commission  was able  to identify  a                                                               
need  and through  the  process the  legislature  engaged in  the                                                               
issue.                                                                                                                          
                                                                                                                                
1:19:48 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE  referred to the bulk  fuel storage projects                                                               
and  asked for  an estimate  on the  number of  years the  Denali                                                               
Commission designs  fuel storage  tank capacity in  the villages.                                                               
He observed  communities would need  enough fuel to last  a barge                                                               
cycle.  He  asked whether it is possible to  design more capacity                                                               
so communities can gradually build up a reserve.                                                                                
                                                                                                                                
MR. NEIMEYER responded  that most systems are  designed for eight                                                               
or nine month's  capacity.  He pointed out that  often a barge is                                                               
not able  to get  into a village  for eight or  nine months.   He                                                               
related that  he shares the story  of large tank farms  for small                                                               
villages when  he is in  Washington D.C. since it  never occurred                                                               
to people  that the barge would  be weathered out.   He explained                                                               
that as the  power plants become more efficient they  do not need                                                               
as much fuel so the  alternative energy projects will reduce that                                                               
need.  He argued that one  could require more fuel if a community                                                               
was  expanding, but  generally  expansion has  been  taken up  by                                                               
capacity of existing power plants.   He pointed out that it takes                                                               
a certain amount  of fuel to run the generator,  whether it is at                                                               
50 or 100 percent efficiency.                                                                                                   
                                                                                                                                
1:21:43 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE FEIGE recalled several  instances in the Kuskokwim                                                               
area in  which communities had  low water  years.  The  barge may                                                               
make it  to a certain village  such as Aniak, but  could not make                                                               
it much  further.  Those  communities were  "in a world  of hurt"                                                               
until  the water  levels came  back  up or  else the  communities                                                               
would need to fly in fuel, he said.                                                                                             
                                                                                                                                
1:22:10 PM                                                                                                                    
                                                                                                                                
MR.  NEIMEYER  turned  to  another   major  program,  the  health                                                               
program.  The  Denali Commission has built over  110 new clinics,                                                               
including  primary care  facilities,  hospitals, senior  housing,                                                               
and other types of health facility  programs.  He stated that the                                                               
Denali Commission's  training program  has been  one of  its core                                                               
programs.   The primary focus of  training has been to  train for                                                               
jobs in  rural Alaska.   The Denali Commission  provided training                                                               
in advance of  the Kongiganak Barge Landing.   The next priority;                                                               
would  be jobs  in rural  Alaska.   The Denali  Commission has  a                                                               
government coordination  program, which coordinates  with federal                                                               
agencies  on effective  and better  delivery of  federal services                                                               
and programs.   He referred to a resolution passed  by the Denali                                                               
Commission, Resolution  01-15, relating  to sustainability.   The                                                               
resolution identified  that the  Denali Commission  projects must                                                               
be sustainable.   At the time it was very  controversial and many                                                               
agencies  had not  needed to  submit to  sustainability.   Today,                                                               
sustainability is  commonly understood  as an appropriate  way of                                                               
doing business.                                                                                                                 
                                                                                                                                
1:24:06 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON pointed out  that the legislature  also requires                                                               
sustainability  in  projects  in  the  capital  budget  before  a                                                               
community can receive funding.   She remarked that sustainability                                                               
is important.  She acknowledged that  it is a new process but the                                                               
state cannot  continue to fund  projects that  communities cannot                                                               
sustain.                                                                                                                        
                                                                                                                                
1:24:40 PM                                                                                                                    
                                                                                                                                
MR. NEIMEYER pointed out with  increased fuel costs, airfare, and                                                               
material costs  all escalating  that the  sustainability paradigm                                                               
has changed quite a bit.                                                                                                        
                                                                                                                                
MR. NEIMEYER referred  to a pie chart shows the  area of funding.                                                               
He  reiterated  the important  thing  to  remember is  the  total                                                               
funding of  $1 billion,  over 12 years  for 2,000  projects, with                                                               
the majority of  work in energy and health  facilities [slide 7].                                                               
He related that the transportation  program's budget is over $100                                                               
million, but  it has only  been funded in  the past four  or five                                                               
years.                                                                                                                          
                                                                                                                                
MR.  NEIMEYER  highlighted  the  Denali  Commission's  structure,                                                               
including  commissioners   at  the  center  who   provide  policy                                                               
guidance  to the  advisory committees.   Each  advisory committee                                                               
has  subject matter  experts  and one  or  two commissioners  are                                                               
assigned to each committee [slide 8].                                                                                           
                                                                                                                                
1:25:59 PM                                                                                                                    
                                                                                                                                
MR. POOL  discussed the  Transportation Advisory  Committee (TAC)                                                               
[slide  8].   He  stated  that  the  TAC  is comprised  of  eight                                                               
appointed members  from diverse  regions across  the state.   The                                                               
TAC has  members from  five native  corporations in  regions, two                                                               
registered  civil   engineers,  and  an  at-large   member.    He                                                               
commented that  he represents Southeast Alaska.   Former Governor                                                               
Murkowski  initially  appointed  the   commissioners.    The  TAC                                                               
established a  project selection process for  road transportation                                                               
and waterfront  development projects.   The ranking  criteria was                                                               
weighted  so the  projects with  partnerships ranked  higher than                                                               
those  without additional  funding.   In the  process of  project                                                               
selection,  the  Denali  Commission   reached  out  to  partners,                                                               
including the  Alaska Native Tribal Health  Consortium, the State                                                               
of  Alaska, the  U.S.  Department of  Transportation, the  Native                                                               
Corporations,  and  larger  municipalities who  could  administer                                                               
funds  and projects.   Additionally,  the Denali  Commission used                                                               
consulting    firms   to    review   communities'    ability   to                                                               
administration  design and  construction contracts.   The  Denali                                                               
Commission's  program   consists  of  60  applicants   per  year,                                                               
including 30  waterfront and 30  highway projects.   The projects                                                               
are ranked  in terms of  whether the applicants have  the ability                                                               
to  execute projects  from the  initial  design and  construction                                                               
phase.  He  said  the  Denali   Commission  adheres  to  a  rigid                                                               
accounting system and accountability  to the Office of Management                                                               
and Budget.  The staff at Denali  Commission reviews expenditures                                                               
and  a project's  progress  as it  goes through  the  cycle.   In                                                               
response   to   Chair   P.  Wilson,   he   responded   that   the                                                               
transportation access  funds are available to  rural areas, which                                                               
is defined as any area  outside the Anchorage and Fairbanks urban                                                               
areas.                                                                                                                          
                                                                                                                                
MR. NEIMEYER offered an example  of project requests.  He related                                                               
an instance in which the  Denali Commission received applications                                                               
from  the Craig  Tribal  Community and  the City  of  Craig.   He                                                               
reported that both projects were funded.   He pointed out that an                                                               
interesting  dynamic  has  emerged in  which  municipalities  and                                                               
tribal  entities are  coordinating and  working together  on road                                                               
projects.                                                                                                                       
                                                                                                                                
1:31:14 PM                                                                                                                    
                                                                                                                                
MR. POOL referred  to a photograph of the Sand  Point Boat Harbor                                                               
[slide 10].   The Denali Commission furnished  $1,100,000 and the                                                               
Aleutians  East Borough  contributed $699,000.   The  project was                                                               
completed in  February 2011.   The more money the  local partners                                                               
contribute,  the higher  the ranking  in the  selection committee                                                               
process.   However, some  communities do not  have any  funds and                                                               
even though  their projects do  not rank  as high, some  funds is                                                               
usually  available to  those  communities  without any  available                                                               
funding to get the design process started.                                                                                      
                                                                                                                                
1:32:26 PM                                                                                                                    
                                                                                                                                
MR.  POOL referred  to the  Nunam Iqua  Boardwalk Project  [slide                                                               
11].     He  explained   many  of   these  projects   consist  of                                                               
constructing  boardwalks or  using geotechnical  synthetic fabric                                                               
that sits on tundra.                                                                                                            
                                                                                                                                
REPRESENTATIVE  GRUENBERG recalled  a photo  of four-wheeler  and                                                               
asked whether this boardwalk would be the same type of thing.                                                                   
                                                                                                                                
MR. POOL agreed.   He stated that the fabric  is highly effective                                                               
and cost effective product that  local villagers can install.  He                                                               
said  he was  very excited  about this  type of  project and  the                                                               
Denali Commission has  funded quite a few of  these projects this                                                               
year.    In  further  response to  Representative  Gruenberg,  he                                                               
agreed the Denali Commission does  not have any aviation programs                                                               
so the  village student  project he  mentioned in  which students                                                               
built an airplane was not a Denali Commission project.                                                                          
                                                                                                                                
1:33:58 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON asked for clarification on the synthetic fabric.                                                                
                                                                                                                                
MR. POOL explained that the  material provides support, grass can                                                               
grow through  the material,  but the  fabric keeps  vehicles from                                                               
sinking  into the  tundra or  muskeg.   In response  to Chair  P.                                                               
Wilson, he answered  that the product is about an  inch thick and                                                               
does not fill  with water or mud.  In  response to Representative                                                               
Petersen, he explained the material  is a plastic, a high density                                                               
polyethylene, which  has a high  tensile strength and  will float                                                               
the traffic.                                                                                                                    
                                                                                                                                
1:35:12 PM                                                                                                                    
                                                                                                                                
CHAIR P.  WILSON asked  whether the  material is  manufactured or                                                               
recycled.                                                                                                                       
                                                                                                                                
MR. POOL  offered his belief  that it  is a combination  of both,                                                               
when recycled  material is available they  Denali Commission will                                                               
use it, but most of it is original.                                                                                             
                                                                                                                                
1:35:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  FEIGE   asked  for   an  estimate  of   the  cost                                                               
comparison  for the  polyethylene as  compared to  constructing a                                                               
wooden walkway.                                                                                                                 
                                                                                                                                
MR.  POOL answered  that the  material  cost is  higher, but  the                                                               
installation is less expensive to  install the polyethylene since                                                               
it does  not require any  skilled labor.   He offered  his belief                                                               
that the cost is comparable  since the geotechnical surface has a                                                               
longer service life.                                                                                                            
                                                                                                                                
1:36:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  referred to  a photo of  a four-wheeler                                                               
on a similar polyethylene walkway  in the village of Kwigillingok                                                               
[slide 15].                                                                                                                     
                                                                                                                                
MR. POOL  agreed it  was the  same product.   He stated  that the                                                               
Denali  Commission  has  funded  a large  variety  of  waterfront                                                               
projects in the past six  years from feasibility, through design,                                                               
and construction.   The Denali  Commission learned early  on that                                                               
in order to  keep the process moving and keep  the $25 million in                                                               
funding moving,  the TAC  needed to consider  all aspects  of the                                                               
project,  from concept,  reconnaissance  work, construction,  and                                                               
design.   He related that currently,  the TAC has 82  projects in                                                               
various stages of construction.                                                                                                 
                                                                                                                                
1:38:43 PM                                                                                                                    
                                                                                                                                
MR.  POOL  explained  the  TAC's basic  function  is  to  process                                                               
applications, take  public comments, and hear  presentations from                                                               
partners,  including  those from  the  Bureau  of Indian  Affairs                                                               
(BIA), Western  Federal Lands Highway  Division (WFLHD),  and the                                                               
Association of Village Council Presidents.                                                                                      
                                                                                                                                
1:40:26 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON asked whether  the village councils are using any                                                               
of their Indian Reservation Roads (IRR) funds.                                                                                  
                                                                                                                                
MR.  POOL  answered  that  much  of  the  IRR  funding  has  been                                                               
dedicated to partnership funding.                                                                                               
                                                                                                                                
1:40:39 PM                                                                                                                    
                                                                                                                                
MR.  POOL  referred  to   photographs  that  depicted  waterfront                                                               
projects  in rural  Alaska, including  barge  facilities for  the                                                               
City of Bethel.   One of the Denali Commission's  partners is the                                                               
U.S. Army Corps of Engineers (Corps).   The Corps has conducted a                                                               
statewide study  of barge mooring  facilities to  determine need.                                                               
The  study  reviewed  68 communities'  facilities  and  performed                                                               
preliminary  analysis and  estimates  on costs  to improve  barge                                                               
facilities and  ports for safer  barge landings.  A  large number                                                               
of  barge landings  in the  river  systems consist  of a  tugboat                                                               
pushing  the barge  against a  mud  bank, which  has resulted  in                                                               
significant erosion  due to  the effect of  the propellers.   The                                                               
Denali  Commission's  project  is  in Phase  4  to  fund  mooring                                                               
facilities.  Some of these  projects area are sometimes as simple                                                               
as driving  three or four groups  of piles connected by  a chain.                                                               
Those mooring facilities  cost ranges from $200  to $300 thousand                                                               
to  build.   Other communities  require unloading  staging areas,                                                               
riprap.  The Denali Commission  has 68 mooring facilities planned                                                               
with a projected cost of $78  million.  The Denali Commission has                                                               
been tackling these mooring facility projects  at a rate of $3 to                                                               
$4 million  per year.  The  TAC works to obtain  funding with the                                                               
U.S. Corps of  Engineers, the communities, and some  of the barge                                                               
companies.   In  response to  Chair  P. Wilson,  he agreed  these                                                               
projects  make   a  big  difference   to  the   barge  operators.                                                               
Ultimately, the Denali Commission  hopes the projects will result                                                               
in overall  cost reductions on  freight deliveries.   He reported                                                               
that  with  increased  fuel  costs the  fuel  savings  alone  are                                                               
significant  for barge  operators  since the  operators will  not                                                               
need to run the barge for eight hours while freight is unloaded.                                                                
                                                                                                                                
1:44:32 PM                                                                                                                    
                                                                                                                                
MR. POOL  discussed the integrated construction  projects [slides                                                               
14-15].   He pointed  out that  the costs  for barge  delivery in                                                               
Western Alaska  can often cost up  to $600,000 for delivery  of a                                                               
barge load of  materials.  In instances in  which communities can                                                               
facilitate the delivery  of material for two  projects instead of                                                               
one, the savings are obvious.   The TAC works to coordinate other                                                               
projects with its partners to enjoy those types of cost savings.                                                                
                                                                                                                                
MR.  POOL related  that  the  TAC's emphasis  is  on local  hire.                                                               
Sometimes  it is  difficult to  accomplish local  hire since  for                                                               
some  larger projects  so the  contractor must  bring in  its own                                                               
crew, but  the Denali Commission's goal  is to try to  keep local                                                               
villages engaged.   In  response to Chair  P. Wilson,  he advised                                                               
that while he  has seen some avoidance of local  hire, but he has                                                               
not  seen  a  substantial  amount.    He  said  that  more  often                                                               
subcontractors face simultaneous  construction projects happen in                                                               
a  village,  not  enough  villagers are  available  to  work.  He                                                               
related  a  scenario  in  which   several  projects  happened  at                                                               
Kongiganak that overwhelmed the work force.                                                                                     
                                                                                                                                
1:48:07 PM                                                                                                                    
                                                                                                                                
MR.  POOL  summarized that  the  TAC  has  invested over  a  $100                                                               
million since  2005 and 2006  on road improvement  and waterfront                                                               
development  projects,   including  33   road  projects   and  42                                                               
waterfront  projects.    Currently,  the  TAC  has  82  road  and                                                               
waterfront  projects in  the planning,  design, and  construction                                                               
phases.   In FY  2010 the Denali  Commission funded  39 projects.                                                               
He provided  a handout  to members with  projects broken  down by                                                               
partner agencies.   He  listed the  DOT&PF, BIA,  Western Federal                                                               
Lands Highway  Division, U.S. Corps  of Engineers,  Alaska Native                                                               
Tribal  Health Consortium,  Alaska Village  Electric Cooperative,                                                               
the Aleutians  East Borough, the  Association of  Village Council                                                               
presidents,  the  Bristol  Bay   Native  Association  as  project                                                               
partners.   Additionally, he reported on  some municipal projects                                                               
including  ones   in  Adak,   Akutan,  Bethel,   Cordova,  Craig,                                                               
Dillingham,  Haines, Hoonah,  Ketchikan, King  Cove, Kodiak,  and                                                               
Kotzebue,  among others  [slides  17-18].   He  also pointed  out                                                               
specific projects in members districts.                                                                                         
                                                                                                                                
MR.  POOL  said  he  appreciated  the  state's  $4.9  million  in                                                               
matching funds for the Denali Commission.                                                                                       
                                                                                                                                
1:52:10 PM                                                                                                                    
                                                                                                                                
MR.  NEIMEYER reviewed  the status  on the  FY 11  projects.   He                                                               
reported that  the Denali Commission  has been  receiving surface                                                               
transportation funds from the SAFETEA-LU a  little at a time.  He                                                               
said  the  Denali  Commission   has  been  prioritizing  projects                                                               
approved by  the Denali  Commission's TAC  that it  believes will                                                               
likely go  to construction  this year.   Once the  federal budget                                                               
has been  approved the  Denali Commission  hopes to  move forward                                                               
with additional projects.                                                                                                       
                                                                                                                                
MR.  NEIMEYER discussed  Denali Commission  policy issues  [slide                                                               
19].  He explained that  the Department of Transportation, Office                                                               
of  Inspector General's  office audited  the Denali  Commission's                                                               
Transportation Program in December 2009.   U.S. Senator Kit Bond,                                                               
Missouri,  asked for  the  audit.   The  Denali Commission  staff                                                               
spent considerable  time responding to  his concerns.   The audit                                                               
identified some  vulnerability within  the program,  but auditors                                                               
did not find  any wrongdoing.  The  Denali Commission immediately                                                               
incorporated some of the  recommended changes including recording                                                               
its  minutes.     The  federal   partner,  the   Federal  Highway                                                               
Administration  (FHWA)  has  been  supportive and  helpful.    He                                                               
raised this  to allow members  to access the audit  report, which                                                               
is on the Denali Commission's website.                                                                                          
                                                                                                                                
1:54:38 PM                                                                                                                    
                                                                                                                                
MR. NEIMEYER recapped that the  main thrust of the report besides                                                               
recommending some  housekeeping, is that the  Denali Commission's                                                               
operations are  fine and  it has  provided smaller  projects that                                                               
serve  rural communities.   One  component the  Denali Commission                                                               
may one day achieve is to  not only provide funding for projects,                                                               
but  to examine  access to  resources.   Currently,  most of  the                                                               
projects are  community based but  one day the  Denali Commission                                                               
may get involved  into the Roads to Resources  types of projects.                                                               
He related  that as part  of the process for  the reauthorization                                                               
of Denali Commission, the commission  will be holding sessions to                                                               
take public  comment on the  direction commission should  take in                                                               
its  second decade.   He  advised  that the  information will  be                                                               
provided  to  the Alaska  Congressional  Delegation  for them  to                                                               
consider.    He  anticipated  that  the  reauthorization  of  the                                                               
SAFETEA-LU would  likely happen  in 2012.   He recapped  that the                                                               
Denali  Commission is  currently working  on its  reauthorization                                                               
and would focus its efforts  on the FHWA reauthorization in 2012.                                                               
He stated that  until then the FHWA will use  the current formula                                                               
for  2012.   The waterfront  projects require  a 20  percent cost                                                               
share in matching  funds, whereas the road  projects require 9.03                                                               
percent in matching funds.                                                                                                      
                                                                                                                                
1:56:50 PM                                                                                                                    
                                                                                                                                
MR. NEIMEYER acknowledged  that the SOA has been  a good partner.                                                               
The legislature  and the governor  provided nearly $5  million to                                                               
the Denali  Commission in matching  funds for  the transportation                                                               
program.   He stated  that all  of the  matching funds  have been                                                               
exhausted  this  year.    He  reported that  two  years  ago  the                                                               
governor put forward  a $3 million partnership grant  and half of                                                               
the grant will go towards transportation  projects.  As of FY 11,                                                               
the state  will not have  any state matching funds  remaining, he                                                               
said.    The  Denali  Commission  has  plans  to  discuss  future                                                               
matching funds with the administration.                                                                                         
                                                                                                                                
1:58:26 PM                                                                                                                    
                                                                                                                                
CHAIR P. WILSON asked whether  the Denali Commission confers with                                                               
the legislative finance committees on matching funds.                                                                           
                                                                                                                                
MR. NEIMEYER responded  that a number of  existing members shared                                                               
their  recollection  that  prior  co-chairs  indicated  that  the                                                               
funding was all  federal funding.  He advised members  that he is                                                               
sharing that in  FY 12 in the transportation  program, the Denali                                                               
Commission will  have a need  for nonfederal cost  share matching                                                               
funds.   He acknowledged that  now may be a  good time to  do so.                                                               
In  response to  Chair P.  Wilson, he  estimated that  the Denali                                                               
Commission may need up to $9.2  next year.  The float project was                                                               
funded  by the  local  community, and  matching  funds are  often                                                               
provided by  the local  municipality or borough.   He  was unsure                                                               
whether $2.4 or $2.5 million  is the right number but non-federal                                                               
matching funds will be required.                                                                                                
                                                                                                                                
CHAIR P. WILSON offered to assist.                                                                                              
                                                                                                                                
2:01:51 PM                                                                                                                    
                                                                                                                                
MR.  POOL also  pointed out  that  it is  sometimes difficult  to                                                               
anticipate which projects  will be requested.   Once the projects                                                               
are  prioritized   the  Denali  Commission  can   identify  which                                                               
projects  will require  matching  funds.   The Denali  Commission                                                               
needs to  have the flexibility  to make the  apportionment within                                                               
the commission rather than identifying earmarks.                                                                                
                                                                                                                                
CHAIR P. WILSON offered her  belief that the communities may know                                                               
in advance the amount needed.                                                                                                   
                                                                                                                                
MR. POOL  agreed that  sometimes communities  will use  IRR funds                                                               
for grants or  other source of funds.  He  stated that many small                                                               
communities do not have funds available.                                                                                        
                                                                                                                                
2:04:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MUNOZ  asked  whether  the  City  of  Juneau  has                                                               
submitted projects in the past few years.                                                                                       
                                                                                                                                
MR.  POOL answered  yes.    He stated  that  the  City of  Juneau                                                               
submitted a  project located  beyond Tee  Harbor, and  the Denali                                                               
Commission funded  a boat launch  and staging area.   He recalled                                                               
the  Denali  Commission  also provided  funded  $500  million  in                                                               
funding for  the project approximately  three to four  years ago.                                                               
In further response to Representative  Munoz, he answered that he                                                               
was  unsure  whether other  projects  have  been submitted  since                                                               
then.                                                                                                                           
                                                                                                                                
2:05:04 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MUNOZ asked  whether the scope was  a narrow scope                                                               
in terms of accessing areas outside the urban center.                                                                           
                                                                                                                                
MR. POOL answered  not necessarily.  He offered  that a community                                                               
obtains a better score when  it has a multi-modal connection such                                                               
as including a  facility that connects with  Gustavus, Hoonah, or                                                               
Pelican, such  as building a  ferry landing, a small  cruise ship                                                               
dock,  a freight  dock, or  barge landing  facility.   In further                                                               
response   to  Representative   Munoz,   he   agreed  that   some                                                               
communities are more  active than others and that  Juneau has not                                                               
been particularly active.                                                                                                       
                                                                                                                                
2:07:28 PM                                                                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Transportation Standing  Committee meeting was adjourned  at 2:07                                                               
p.m.                                                                                                                            

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