Legislature(2015 - 2016)CAPITOL 17

01/27/2015 01:00 PM House TRANSPORTATION

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01:05:16 PM Start
01:08:46 PM Overview: Dot&pf's Statewide Facilities & Energy Savings Efforts
01:29:46 PM Overview: Department of Transportation & Public Facilities - Highway Program
02:16:17 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
- DOT/PF Facilities & Energy Saving Efforts
- DOT/PF Highway Program
                    ALASKA STATE LEGISLATURE                                                                                  
            HOUSE TRANSPORTATION STANDING COMMITTEE                                                                           
                        January 27, 2015                                                                                        
                           1:05 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Neal Foster, Co-Chair                                                                                            
Representative Shelley Hughes, Co-Chair                                                                                         
Representative Charisse Millett                                                                                                 
Representative Benjamin Nageak                                                                                                  
Representative Louise Stutes                                                                                                    
Representative Matt Claman                                                                                                      
Representative Dan Ortiz                                                                                                        
MEMBERS ABSENT                                                                                                                
COMMITTEE CALENDAR                                                                                                            
OVERVIEW:  STATEWIDE FACILITIES & ENERGY SAVINGS EFFORTS                                                                        
     - HEARD                                                                                                                    
OVERVIEW:  DOT&PF HIGHWAY PROGRAM                                                                                               
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
DAVID KEMP, Engineer                                                                                                            
Statewide Facilities                                                                                                            
Office of the Commissioner                                                                                                      
Department of Transportation & Public Facilities (DOT&PF)                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified and answered questions during the                                                              
overview of the Department of Transportation & Public Facilities                                                                
(DOT&PF) Statewide Facilities & Energy Savings Efforts.                                                                         
CHRISTOPHER HODGIN, Program Manager                                                                                             
Energy Office                                                                                                                   
Statewide Public Facilities                                                                                                     
Office of the Commissioner                                                                                                      
Department of Transportation & Public Facilities (DOT&PF)                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified and  answered questions during the                                                             
overview of the Department of  Transportation & Public Facilities                                                               
(DOT&PF)  and on  DOT&PF's  Statewide  Facilities Energy  Savings                                                               
KIM RICE, Deputy Commissioner                                                                                                   
Department of Transportation & Public Facilities (DOT&PF)                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified and  answered questions during the                                                             
overview of the Department of  Transportation & Public Facilities                                                               
(DOT&PF) on Surface Transportation & MAP-21.                                                                                    
ACTION NARRATIVE                                                                                                              
1:05:16 PM                                                                                                                    
CO-CHAIR SHELLEY HUGHES called  the House Transportation Standing                                                             
Committee meeting to order at  1:05 p.m.  Representatives Nageak,                                                               
Claman, Ortiz,  Foster, and  Hughes were present  at the  call to                                                               
order.    Representatives  Millett  and  Stutes  arrived  as  the                                                               
meeting was in progress.                                                                                                        
1:08:46 PM                                                                                                                    
CO-CHAIR  HUGHES  reported  that  she  and  Co-Chair  Foster  and                                                               
Senator   Micciche,   Chair,   Senate   Transportation   Standing                                                               
Committee  are in  the process  of requesting  the department  to                                                               
provide more in-depth answers, details  and clarification on some                                                               
of the major transportation projects discussed last week.                                                                       
^OVERVIEW:    DOT&PF's  STATEWIDE  FACILITIES  &  ENERGY  SAVINGS                                                               
   OVERVIEW:  DOT&PF's STATEWIDE FACILITIES & ENERGY SAVINGS                                                                
1:10:11 PM                                                                                                                    
CO-CHAIR HUGHES announced that the  first order of business would                                                               
be an overview  of DOT&PF's Statewide Public  Facilities & Energy                                                               
Savings Efforts.                                                                                                                
1:10:22 PM                                                                                                                    
DAVID  KEMP,  Engineer,  Statewide   Facilities,  Office  of  the                                                               
Commissioner,  Department of  Transportation &  Public Facilities                                                               
(DOT&PF), stated that statewide  facilities authority falls under                                                               
AS 35.05.010 and AS 36.30 [slide  2].  He reported that statewide                                                               
public  facilities  is  responsible  for  planning,  design,  and                                                               
construction of the majority of  new public facilities as well as                                                               
renovation  of existing  facilities within  the State  of Alaska,                                                               
except for  the University  of Alaska,  the Alaska  Court System,                                                               
and  a few  other agencies.    The DOT&PF  provides full  service                                                               
project management  for facility construction and  renovation and                                                               
while renovations  constitute the  vast majority of  the projects                                                               
the  DOT&PF  performs, the  department  does  perform some  full-                                                               
fledged   projects   [slide   3].      The   department   manages                                                               
architectural  and  engineering professional  service  agreements                                                               
and  oversight  of the  construction  of  the projects  including                                                               
programming,  planning, site  selection, cost  estimating, design                                                               
management  services,   construction  management   services,  art                                                               
selection, commissioning,  and warranty work once  the project is                                                               
1:12:03 PM                                                                                                                    
MR.  KEMP reported  that the  DOT&PF provides  project management                                                               
for  most  of   the  executive  branch  as  well   as  for  local                                                               
communities and  tribal organizations  as needed  [slide 4].   He                                                               
recalled that last year Co-Chair  Foster asked the DOT&PF to work                                                               
more  collaboratively with  local  communities and  tribes.   For                                                               
example, the DOT&PF has been working  with the City of Sitka on a                                                               
justice center, and with the Sitka  Tribe of Alaska on a bus barn                                                               
and  office  building,  and  is  in  the  process  of  signing  a                                                               
memorandum  of  understanding  on  the  bus  barn  project.    He                                                               
anticipated  that  the  DOT&PF  will  soon  start  managing  that                                                               
project.  The DOT&PF's projects  range from smaller projects such                                                               
as  the Sitka  Pioneer Home  reroof to  larger ones  such as  the                                                               
State Library Archives and Museum  in Juneau (SLAM).  Mr. Hodgins                                                               
will talk  later about energy  retrofits; however,  he emphasized                                                               
that energy efficiency  is a very important component  of any new                                                               
construction facility,  for example, as  on the new  William Jack                                                               
Hernandez Sport Fish  Hatchery in  Anchorage.  The  Institute for                                                               
Sustainable Infrastructure (ISI)  selected the Hernandez hatchery                                                               
as the  first ever recipient  of its  Envision TM Gold  award for                                                               
sustainability, which  was awarded  by the American  Public Works                                                               
Association, the Harvard  Graduate School, and a  large number of                                                               
agencies involved in energy use in the country.                                                                                 
1:13:39 PM                                                                                                                    
MR. KEMP stated  that the DOT&PF currently  manages 155 projects,                                                               
including facility projects in various  stages of completion from                                                               
initial scoping  to final close  out totaling  approximately $658                                                               
million [slide 5].                                                                                                              
MR.  KEMP relayed  that his  staff includes  licensed architects,                                                               
civil,  mechanical,  and   electrical  engineers,  and  certified                                                               
energy managers,  including Mr.  Hodgins.  Some  department staff                                                               
hold  credentials in  Leadership in  Energy &  Environment Design                                                               
(LEEDS)  and  the  Professional  Project  Management  Certificate                                                               
(PPMC) and other staff are paraprofessional staff [slide 6].                                                                    
1:14:30 PM                                                                                                                    
MR. KEMP  pointed out several  projects, including  renovation of                                                               
the  Alaska  Veterans' and  Pioneers'  home,  which consisted  of                                                               
siding and painting for a total  cost of $677,550.  He identified                                                               
the  client  agency  as  the  Department  of  Health  and  Social                                                               
Services (DHSS), noting this project  vastly improved the weather                                                               
tightness of  the building, reduced  drafts, and  reduced overall                                                               
heating costs [slide 7].                                                                                                        
MR. KEMP  highlighted a large  project in Juneau -  the Statewide                                                               
Library Archive  and Museum  (SLAM), pointing  out many  may have                                                               
seen the big  yellow crane visible outside  the capitol building.                                                               
The  DOT&PF  has  been  involved  in  the  planning  and  ongoing                                                               
construction of the  SLAM for a total cost  of approximately $138                                                               
1:15:23 PM                                                                                                                    
CHRISTOPHER  HODGIN, Program  Manager,  Energy Office,  Statewide                                                               
Public  Facilities, Office  of  the  Commissioner, Department  of                                                               
Transportation  &   Public  Facilities  (DOT&PF),   outlined  the                                                               
statutory  requirement  for  the  energy  program,  which  is  to                                                               
perform energy efficiency improvements in  at least 25 percent of                                                               
state  facilities excluding  legislative and  court buildings  by                                                               
January 1, 2010.                                                                                                                
MR.  HODGIN  stated  that  his  office  performs  assessment  and                                                               
comprehensive  energy  audits,  project development,  life  cycle                                                               
cost analysis, and facilitates different  financing options.  The                                                               
office  manages all  project execution  and management,  and once                                                               
completed  monitor   the  project  to  ensure   that  the  energy                                                               
efficiency goals are met.                                                                                                       
1:16:14 PM                                                                                                                    
MR.  HODGIN highlighted  some of  the  energy efficiency  results                                                               
that  have achieved  combined energy  cost  savings greater  than                                                               
$2.4 million per  year in electric, natural gas,  heating oil and                                                               
carbon dioxide reductions [slide 11].                                                                                           
1:16:48 PM                                                                                                                    
MR. HODGIN  pointed out energy savings  performance projects have                                                               
been accomplished  in over 50 state  public facilities, including                                                               
projects in Nome, Coldfoot, Ketchikan,  Kenai, Sitka, and Juneau.                                                               
For example,  the project  in Coldfoot  upgraded a  Department of                                                               
Public  Safety (DPS)  hangar  building and  in  Sitka, the  Mount                                                               
Edgecumbe High  School underwent  the energy  savings performance                                                               
1:17:19 PM                                                                                                                    
CO-CHAIR HUGHES asked whether the  energy projects are limited to                                                               
existing buildings.                                                                                                             
MR. HODGIN agreed.                                                                                                              
1:17:30 PM                                                                                                                    
MR. HODGIN briefly reviewed the  projects in progress [slide 13].                                                               
Currently, 20  buildings are in the  development phase, including                                                               
a  Department   of  Public  Safety  building,   a  Department  of                                                               
Corrections  facility, and  some  Department of  Health &  Social                                                               
Services facilities in a variety  of locations from St. Mary's to                                                               
Ketchikan.    The total  cost  of  the  projects is  $10  million                                                               
resulting in  annual energy savings associated  with the projects                                                               
at  over   $845,000.    He  defined   energy  savings  performing                                                               
contracting  as   a  method   to  accomplish   energy  efficiency                                                               
improvements that  are funded by  the energy savings  produced by                                                               
those  same improvements  [slide 14].   For  example, the  energy                                                               
program  uses  new  and  efficient  lighting  technologies,  high                                                               
efficiency  heating  systems,  heat pump  systems,  or  renewable                                                               
energy including photovoltaic systems,  wind, and biomass heating                                                               
to accomplish  energy efficiency.   Each  project is  assessed to                                                               
see which technology may be applicable, he said.                                                                                
1:19:15 PM                                                                                                                    
REPRESENTATIVE  ORTIZ  asked  whether   the  energy  program  has                                                               
assessed the viability of wood pellet use.                                                                                      
MR.  HODGIN answered  yes, that  viability of  using biomass  for                                                               
specific  projects is  considered; for  example, the  program has                                                               
considered  Southeast  biomass  in   one  of  its  Department  of                                                               
Corrections  projects,  assessing the  cost  of  pellets and  the                                                               
product, as  well as the  capabilities of the  maintenance staff.                                                               
In response to  a question, he answered  that photovoltaic refers                                                               
to solar energy use.                                                                                                            
1:20:22 PM                                                                                                                    
REPRESENTATIVE  STUTES  asked for  the  process  agencies use  to                                                               
obtain the energy program's services.                                                                                           
MR.  HODGIN   explained  that   the  DOT&PF's   Statewide  Public                                                               
Facilities serves  all  of the  executive branch  agencies.   Any                                                               
agency  that  desires  an  energy  retrofit  should  contact  the                                                               
DOT&PF's Statewide Public Facilities and  will be referred to the                                                               
energy program.   The DOT&PF energy program would  then conduct a                                                               
review to determine  how the building uses  energy, the viability                                                               
of the  infrastructure and whether  any imminent  failure exists,                                                               
and subsequently  work with the  agency to provide  an investment                                                               
grade audit of the facility and develop the project.                                                                            
1:21:08 PM                                                                                                                    
MR. KEMP added  that the energy program  originally used deferred                                                               
maintenance funds  as well  as $10  million in  American Recovery                                                               
Reinvestment Act  of 2009 (ARRA) federal  funding.  Subsequently,                                                               
the  program  has  used financing  available  through  commercial                                                               
venues and other agencies.                                                                                                      
1:21:45 PM                                                                                                                    
REPRESENTATIVE  STUTES  asked  whether  the  program  uses  local                                                               
municipal  deferred  maintenance  or state  deferred  maintenance                                                               
MR. KEMP  answered that to date  the program has been  limited to                                                               
state agencies.                                                                                                                 
MR. HODGIN  added that he  has discussed the energy  program with                                                               
municipalities to share knowledge,  but not to implement projects                                                               
with various municipalities.                                                                                                    
1:22:24 PM                                                                                                                    
CO-CHAIR  HUGHES  asked  whether  municipalities  would  be  more                                                               
likely to work with the Alaska Energy Authority [AEA].                                                                          
MR. HODGIN answered that public  entities would be more likely to                                                               
work with Alaska Housing Finance Corporation (AHFC).                                                                            
1:22:52 PM                                                                                                                    
REPRESENTATIVE  CLAMAN recalled  a  previous presentation  before                                                               
the  House  Special Committee  on  Energy  on the  Alaska  Energy                                                               
Efficiency   Revolving  Loan   Fund  (EERLF)   used  for   energy                                                               
efficiency.   He asked whether the  EERLF would be one  source of                                                               
funding  and  if so,  whether  the  DOT&PF's energy  program  has                                                               
previously used the fund.                                                                                                       
MR. HODGIN  answered yes; it  is one  of the sources  of funding.                                                               
Some state agencies have made  application with the EERLF and the                                                               
DOT&PF's  energy  program also  considers  loan  offers from  the                                                               
Alaska Housing Finance Corporation (AHFC).                                                                                      
1:23:47 PM                                                                                                                    
REPRESENTATIVE CLAMAN asked  whether the aforementioned completed                                                               
projects were  done using cash  flow rather than  borrowing money                                                               
to make the upgrades.                                                                                                           
MR. HODGIN  explained that  a little over  $28 million  in energy                                                               
savings performance  projects have  been completed to  date using                                                               
deferred maintenance, the ARRA, and commercial loan funds.                                                                      
1:24:15 PM                                                                                                                    
CO-CHAIR HUGHES  asked for further clarification  on the process,                                                               
whether  the energy  program  keeps a  running  list of  proposed                                                               
upgrades or  if the  DOT&PF has  a sense  of the  facilities that                                                               
need  attention   and  encourages   them  to  apply   for  energy                                                               
efficiency upgrades.                                                                                                            
MR. HODGIN  answered that his  office works with the  agencies to                                                               
prioritize  projects  and determine  which  ones  should be  done                                                               
next.  For example, the  DOT&PF Statewide Facilities reviewed the                                                               
department's Central  Region facilities  to determine  which ones                                                               
to incorporate in the next round of projects.                                                                                   
1:25:26 PM                                                                                                                    
MR. HODGIN  showed an  example of the  Mt. Edgecumbe  High School                                                               
campus-wide energy upgrades  in Sitka [slides 16-17].   The first                                                               
slide shows the  results of replacing the old  lighting system in                                                               
the gym  with high efficiency fluorescent  lights, which resulted                                                               
in reduced  energy costs. He characterized  upgrading lighting as                                                               
a  safety issue  that  is also  used in  shops  to reduce  energy                                                               
REPRESENTATIVE  NAGEAK   commented  on  the  lighting   since  he                                                               
attended the Mt. Edgecumbe High School.                                                                                         
1:26:28 PM                                                                                                                    
MR.  HODGIN  stated  the  campus-wide   energy  upgrades  at  Mt.                                                               
Edgecumbe High School spanned two  years.  The DOT&PF worked with                                                               
the  Department   of  Education  &  Early   Development  and  Mt.                                                               
Edgecumbe High  School to assess their  energy and infrastructure                                                               
needs  to  decide  which  improvements  would  be  best  for  the                                                               
facility.  The  project has been successful and  resulted in fuel                                                               
savings  of  over  66,000  gallons of  fuel  oil  [and  $304,000]                                                               
annually with an estimated 30-year life span.                                                                                   
1:27:29 PM                                                                                                                    
REPRESENTATIVE   ORTIZ  asked   for   further  clarification   on                                                               
eligibility  of   partially  state-funded  structures,   such  as                                                               
MR.  KEMP answered,  in  terms of  project  management, that  the                                                               
program has  not involved school  districts.  He assumed  that it                                                               
would  be  possible  to  expand the  energy  program  to  include                                                               
upgrades to schools.                                                                                                            
1:28:43 PM                                                                                                                    
CO-CHAIR HUGHES  asked how many  public facilities are  under the                                                               
purview of the department.                                                                                                      
MR.  KEMP answered  that the  DOT&PF Statewide  Public Facilities                                                               
manages  construction  and  renovation  projects,  but  does  not                                                               
manage  any  facilities.    The  DOT&PF's  three  regions  manage                                                               
facilities for  the department;  however, those  regional offices                                                               
are not under his purview.                                                                                                      
^OVERVIEW:  DEPARTMENT OF  TRANSPORTATION &  PUBLIC FACILITIES  -                                                               
HIGHWAY PROGRAM                                                                                                                 
  OVERVIEW: DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES -                                                              
                        HIGHWAY PROGRAM                                                                                     
1:29:46 PM                                                                                                                    
CO-CHAIR HUGHES announced  that the next order  of business would                                                               
be  an overview  of  the Department  of  Transportation &  Public                                                               
Facilities (DOT&PF) - Highway Program.                                                                                          
1:30:51 PM                                                                                                                    
KIM  RICE, Deputy  Commissioner, Department  of Transportation  &                                                               
Public Facilities  (DOT&PF), stated  that she  has been  with the                                                               
department for  more than  three decades.   She provided  a brief                                                               
personal history,  noting she  has been a  resident of  the state                                                               
since 1961.  She characterized the  DOT&PF as being a culture for                                                               
her  and not  just a  job.   She  offered to  begin a  PowerPoint                                                               
overview on Surface  Transportation and MAP 21  [Moving Ahead for                                                               
Progress in the 21st Century Act].                                                                                              
1:31:38 PM                                                                                                                    
MS.  RICE directed  attention to  the outline  on slide  2.   She                                                               
summarized it as, "Who are we?   Where's the money?  And what are                                                               
the  rules?"   She  said  AS  19.05.125 identifies  the  DOT&PF's                                                               
purpose to carry out planning,  construction, and maintenance and                                                               
link  communities together  for  commerce and  access [slide  3].                                                               
She stated  that the department  revised its mission  statement a                                                               
few years ago  and its mission now tends to  echo the statute, to                                                               
provide for the safe and  efficient movement of people and goods,                                                               
provide access to  state services, and to  open opportunities for                                                               
exploration  and development  of  Alaska's  resources [slide  4].                                                               
She  identified the  core values  as  integrity, excellence,  and                                                               
respect,  which  are promoted  by  leadership  within the  DOT&PF                                                               
[slide 5].   Commissioner  Luiken believes  in these  core values                                                               
since  he was  with  the  department when  the  core values  were                                                               
1:32:57 PM                                                                                                                    
MS. RICE read, "What do the  right people want more than anything                                                               
else?   They want to  be part of  a winning  team.  They  want to                                                               
contribute to producing visible, tangible  results.  They want to                                                               
feel the excitement of being  involved in something that flat out                                                               
works."    That  quote  helps describe  the  department's  staff,                                                               
noting that they  recognize how their service  affects people and                                                               
access, and  further, that DOT&PF's facilities  make a difference                                                               
in how Alaskans live [slide 6].                                                                                                 
1:33:45 PM                                                                                                                    
MS. RICE directed attention to  the organizational structure that                                                               
is laid  out in true  linear form [slide 7].   She serves  as the                                                               
deputy  commissioner overseeing  the  Statewide Equipment  Fleet,                                                               
Statewide   Facilities,   Statewide   Information   Systems   and                                                               
Services,  Statewide   Maintenance  and  Operations   (M&O),  the                                                               
Division  of Planning/Program  Development, and  the Division  of                                                               
Statewide Design & Engineering Services.                                                                                        
MS. RICE  characterized the  interactions between  management and                                                               
staff programs as  being the fabric of DOT&PF  since what happens                                                               
in  one  part  of  the  department affects  other  parts  of  the                                                               
department, especially  with respect  to policies,  programs, and                                                               
information systems [slide 8].                                                                                                  
1:34:22 PM                                                                                                                    
MS.  RICE  relayed that  the  headquarters  functions pertain  to                                                               
policies, procedures,  and coordination.  She  directed attention                                                               
to the regional functions or  the "work horses" of the department                                                               
since the  work occurs  in the  regions [slide  10].   She stated                                                               
that  regions  conduct   maintenance,  design  and  construction,                                                               
right-of-way purchases,  and acquire environmental permits.   She                                                               
noted that the department consists  of three regions: the Central                                                               
Region, the Northern Region, and  the SouthCoast Region, with its                                                               
main offices located in Anchorage, Fairbanks and Juneau.                                                                        
1:35:01 PM                                                                                                                    
CO-CHAIR  HUGHES asked  for the  historical perspective  and when                                                               
the department  was organized  by regions.   She  understood that                                                               
the  regional  organization is  somewhat  unique.   Although  the                                                               
regional  organization works  well  in some  ways,  she has  also                                                               
heard from  current or prior  department staff that  the regional                                                               
approach sometimes results in some duplication of services.                                                                     
MS. RICE  replied that sometime  between 1977 and 1979  the state                                                               
Department of  Highways and the  Department of Public  Works were                                                               
merged  and  the  legislature  established  regions  [AS  44.42].                                                               
Although the  statute does not  specifically identify  the number                                                               
of  regions,  she recalled  that  the  statute emphasized  strong                                                               
regions.   At  the same  time, public  facilities, aviation,  and                                                               
harbor  functions  also  merged  with  the  state  Department  of                                                               
Highways to better share resources.                                                                                             
1:36:44 PM                                                                                                                    
MS.  RICE envisioned  the  concept that  an  airport planner  and                                                               
designer  could work  in a  community,  but could  simultaneously                                                               
work on  a road.   Certainly some  duplication of  services still                                                               
exists  and over  time the  regions have  tended to  drift apart;                                                               
however, in  the past two  years the department has  been working                                                               
to break down silos and improve communication.                                                                                  
1:37:08 PM                                                                                                                    
MS.  RICE  directed  attention  to some  of  the  challenges  the                                                               
department faces  to balance its  budget against  needs, changing                                                               
conditions, and  public expectations [slide  11].  Alaska  is one                                                               
of the few  states that doesn't have a state  capital program for                                                               
transportation,  in particular,  for highways,  she said.   Thus,                                                               
the state is  very dependent upon federal funds.   Currently, the                                                               
department  has  $3-4  [billion]  in  proposed  projects  so  the                                                               
department has  not solicited proposed projects  from communities                                                               
due to  the backlog of  projects on  the "needs list."   Although                                                               
major  projects receive  significant press,  the department  also                                                               
budgets about $600,000 for smaller projects, she said.                                                                          
1:38:21 PM                                                                                                                    
CO-CHAIR  FOSTER,  recalled  former Representative  Peggy  Wilson                                                               
[who previously  was chair of  the House  Transportation Standing                                                               
Committee], continually  pushed for  a transportation fund.   The                                                               
state also receives ongoing pressure  from the federal government                                                               
to increase state  funds to provide for its needs.   He asked for                                                               
the department's general view on a transportation fund.                                                                         
MS. RICE answered  that she was unsure what  position the current                                                               
administration  has with  respect to  a dedicated  transportation                                                               
fund;   however,  in   reviewing  other   states'  transportation                                                               
funding, she said  most states have found it necessary  to have a                                                               
working  capital   fund  for  transportation.     Later   in  her                                                               
PowerPoint  overview,  members  will   notice  that  the  federal                                                               
program does not  cover all funding.  The advantage  of using the                                                               
state's general  capital program is that  it provides flexibility                                                               
and ease  of planning, she  said.   In some years  the department                                                               
has   received  its   transportation   funding  through   general                                                               
obligation bonds,  in other years  from the general fund,  and at                                                               
times through  specific funding, such as  the substantial funding                                                               
the  state   received  from  the  ARRA   [American  Recovery  and                                                               
Reinvestment  Act of  2009].   These  fluctuations make  planning                                                               
difficult, and  now the new federal  funding reauthorization [MAP                                                               
21] will target the National  Highway System (NHS) so funding for                                                               
rural areas is more complex.                                                                                                    
1:40:27 PM                                                                                                                    
REPRESENTATIVE   CLAMAN   recalled   Deputy   Commissioner   Rice                                                               
indicated that most states have  a dedicated transportation fund,                                                               
but Alaska does  not.  He asked for further  clarification on how                                                               
other states  fund transportation  and the  source of  the funds.                                                               
For example, he understood that  gas taxes [motor fuel taxes] are                                                               
often the source for highway funds.                                                                                             
MS. RICE answered that many states  use gas taxes, but the source                                                               
of funding varies.   For example, Oregon has  been considering an                                                               
assessment on  vehicle miles traveled (VMT)  and Washington state                                                               
also uses sales  taxes.  While some states  have dedicated funds,                                                               
others use general  fund monies, but designate  a specific amount                                                               
for transportation funding.                                                                                                     
1:41:27 PM                                                                                                                    
REPRESENTATIVE   NAGEAK  commented   that   projects  for   rural                                                               
essential  needs  are "few  and  far  between" in  the  villages.                                                               
Although  he  still wants  a  road  to  his  house, and  he  will                                                               
continue to  request one, he does  so because it is  so important                                                               
to  connect the  rest of  the state  to the  road system.   Rural                                                               
Alaska  need  roads,  he  said,  emphasizing  the  importance  of                                                               
building  [Roads to  Resources]  to allow  the  state to  extract                                                               
minerals,  enhance  revenues,  grow  as  a  state,  to  diversify                                                               
revenues and rely less on oil  and gas revenue.  In addition, the                                                               
state  needs  to   connect  regions  of  the   state  instead  of                                                               
concentrating  on   areas  with  existing  infrastructure.     He                                                               
expressed  concern about  the  high cost  of  air travel  between                                                               
villages or for travel to Juneau;  for example, the cost to bring                                                               
legislators  to  Juneau or  for  constituents  to travel  to  the                                                               
capital during the legislative session.                                                                                         
1:44:26 PM                                                                                                                    
CO-CHAIR FOSTER, with respect  to transportation revenue, related                                                               
that the  state's [motor fuel tax  also known as the]  gas tax is                                                               
$.08  per gallon,  and  with revenue  from  licenses and  vehicle                                                               
registration is all deposited to the  general fund.  He asked for                                                               
any  potential transportation  sources of  revenues other  states                                                               
use that are not available to Alaska.                                                                                           
MS. RICE  answered tolls and  gas [motor fuel] taxes  are sources                                                               
of revenue,  which are dedicated  in some states.   She confirmed                                                               
that  Alaska's motor  fuel taxes  are currently  set at  $.08 per                                                               
1:45:32 PM                                                                                                                    
REPRESENTATIVE STUTES  emphasized that the Alaska  Marine Highway                                                               
System (AMHS) functions as rural  Alaska's freeway system, but it                                                               
always seems to take a back seat to the road system.                                                                            
CO-CHAIR  HUGHES mentioned  the focus  of today's  meeting is  an                                                               
overview of the surface transportation.                                                                                         
1:46:29 PM                                                                                                                    
REPRESENTATIVE  ORTIZ asked  whether former  Representative Peggy                                                               
Wilson's  model  was an  investment  model  funded from  reserves                                                               
similar  to  the  Alaska  Permanent  Fund  with  returns  funding                                                               
CO-CHAIR    HUGHES   related    her   understanding    that   the                                                               
aforementioned  proposal was  to amend  Alaska's Constitution  to                                                               
allow  [dedicated] funds  for transportation  using  some of  the                                                               
revenues just mentioned.                                                                                                        
CO-CHAIR  FOSTER   recalled  that  the   aforementioned  proposal                                                               
essentially   would   have   deposited    $2   billion   into   a                                                               
transportation infrastructure fund.   He recalled that originally                                                               
a  dedicated  fund  was  in Alaska's  Constitution,  but  he  was                                                               
uncertain if it had ever been funded.                                                                                           
1:47:43 PM                                                                                                                    
REPRESENTATIVE MILLETT  said that during territorial  days Alaska                                                               
had  a dedicated  transportation fund  but it  wasn't adopted  at                                                               
statehood.   Since 1960, efforts  have been made about  every ten                                                               
years to reestablish the dedicated transportation fund.                                                                         
MS.  RICE agreed  that a  dedicated transportation  fund has  not                                                               
been in place  since statehood, but she was unsure  if one was in                                                               
effect prior to statehood.                                                                                                      
1:48:11 PM                                                                                                                    
REPRESENTATIVE  CLAMAN understood  that  the  DOT&PF's budget  is                                                               
higher  than  revenues  generated.   For  example,  the  gas  tax                                                               
generates revenue that goes to  the general fund and not directly                                                               
to  the   DOT&PF.    However,  since   transportation  costs  are                                                               
significantly higher  than the aforementioned revenue,  the state                                                               
would  still need  to  supplement  the funds  even  if  it had  a                                                               
dedicated transportation fund.                                                                                                  
MS.  RICE said  she was  unsure of  the figures;  however, it  is                                                               
likely so  since Alaska  has the  lowest gas  tax in  the nation.                                                               
She offered to provide information to the committee.                                                                            
1:49:14 PM                                                                                                                    
CO-CHAIR  FOSTER  said  that  given   the  current  deficit,  the                                                               
legislature  will   need  to  consider  all   options,  including                                                               
considering what other  states such as California  or Montana are                                                               
doing.  He asked whether  the DOT&PF has compiled the information                                                               
or if the legislature will need to research it.                                                                                 
MS. RICE offered to either  provide the information or advise the                                                               
committee if the department does not have it.                                                                                   
1:50:04 PM                                                                                                                    
MS.  RICE,   in  response  to  Representative   Nageak's  earlier                                                               
comments encouraging the state  investing more in infrastructure,                                                               
commented that  the state must  comply with  increasingly complex                                                               
environmental  and land  issues that  make it  difficult for  the                                                               
state to complete  projects, which is illustrated  by the federal                                                               
environmental requirements affecting transportation [slide 12].                                                                 
1:50:47 PM                                                                                                                    
MS.  RICE  directed  attention to  the  National  Highway  System                                                               
(NHS), stating that the state  has 2,345 center line miles, which                                                               
is six times the per capita  average [slide 13].  The DOT&PF also                                                               
maintains 5,589  miles of  roads and  highways that  comprise the                                                               
core highway system in Alaska, she said.                                                                                        
MS.  RICE  highlighted  the  state   has  79  manned  maintenance                                                               
stations statewide  along its  road corridors  and at  some rural                                                               
airports [slide 14].   She explained that in  order for operators                                                               
to operate  efficiently and be  able to keep roads  cleared these                                                               
maintenance stations must be a certain distance apart.                                                                          
1:51:43 PM                                                                                                                    
MS. RICE highlighted some changes  and efficiencies are occurring                                                               
within the DOT&PF, including that  the department is currently in                                                               
the  process of  restructuring  its computer  system [slide  15].                                                               
Each region operated  its own system and  network, which couldn't                                                               
function  as one  system.   The  DOT&PF  brought its  information                                                               
systems staff together  to develop one comprehensive  system.  In                                                               
doing so,  the DOT&PF anticipates  that it will save  millions on                                                               
projects, be more efficient, thereby  freeing up staff time.  The                                                               
new system  has been driven,  in part, by the  reauthorization of                                                               
the   federal  funding,   which   requires   states  to   provide                                                               
significantly  more  data   on  performance,  including  detailed                                                               
tracking on GIS [Geographic Information Systems].                                                                               
1:52:43 PM                                                                                                                    
CO-CHAIR HUGHES asked whether any  of the 79 maintenance stations                                                               
are  paired  up  with  [Alaska State]  Troopers  or  other  state                                                               
MS.  RICE  answered that  the  Chandalar  station on  the  Dalton                                                               
Highway is  one.   While there  may be a  few more,  there hasn't                                                               
been an intentional effort to pair up offices, she said.                                                                        
CO-CHAIR   HUGHES   hoped   the  administration   will   consider                                                               
consolidating offices whenever possible.                                                                                        
1:53:48 PM                                                                                                                    
REPRESENTATIVE  CLAMAN, returning  to the  challenges of  federal                                                               
regulations, asked whether regulatory  requirements are agreed to                                                               
with federal  dollars; for example,  if federal  regulations will                                                               
still  apply on  state-funded projects  funded solely  with state                                                               
MS. RICE answered that most  federal regulations apply regardless                                                               
of the source  of funding; however, the department  uses a linear                                                               
process  with   the  federally-funded  process.     For  example,                                                               
environmental  work  must  be  done before  design  work  can  be                                                               
accomplished; however,  state-funded projects still  must perform                                                               
environmental  assessments  and  a NEPA  [National  Environmental                                                               
Policy Act of 1969] document if  the state has a wetlands permit.                                                               
She pointed out considerable wetlands exist in Alaska.                                                                          
1:54:49 PM                                                                                                                    
REPRESENTATIVE CLAMAN  related his understanding that  it is hard                                                               
to  develop any  project without  having to  fill or  dredge some                                                               
MS. RICE agreed;  however, lots of caveats exist.   She commented                                                               
that federal regulations  also apply if eagles  or any endangered                                                               
species  exist.   A  fully  state-funded  project is  still  more                                                               
efficient  than  using  [Federal Highway  Administration  (FHWA)]                                                               
funds, she said.                                                                                                                
1:55:25 PM                                                                                                                    
CO-CHAIR HUGHES asked  for an estimate of how much  time could be                                                               
shaved off with 100 percent state-funding on projects.                                                                          
MS. RICE answered  that one state-funded project  she is familiar                                                               
with in  Anchorage is  the Elmore Road  between Tudor  and Abbott                                                               
Road project.  That project  was fully state-funded and completed                                                               
in four  years, although  the department still  had to  prepare a                                                               
NEPA   document  since   permitting  and   fill  was   necessary.                                                               
According to  conversations she subsequently held  with the FHWA,                                                               
the  project would  have taken  much longer  using federal  funds                                                               
since the  federal process  would require an  EIS and  would have                                                               
considered  all the  connecting  projects as  a whole,  including                                                               
Dowling Road, she said.                                                                                                         
1:56:37 PM                                                                                                                    
MS.  RICE  continued  with  slide   15,  noting  the  DOT&PF  has                                                               
developed  a  leadership  academy for  the  DOT&PF's  maintenance                                                               
staff  to  assist  staff  in  developing  skills  necessary  when                                                               
serving the  public.  In  fact, this program has  been recognized                                                               
nationwide,  she  said.    In   addition,  training  for  airport                                                               
operators in rural Alaska has  been improved to help operators do                                                               
a better job.   Other efficiencies include the use  of tow plows,                                                               
and an innovative modification staff  made to snow blowers at the                                                               
Chandalar Station  that reduced belt  changing time from  7 hours                                                               
to  1.5 hours.    She commended  staff's  ability to  incorporate                                                               
innovative strategies into the workplace.                                                                                       
1:58:26 PM                                                                                                                    
MS.  RICE directed  attention to  the FY  16 operating  budget of                                                               
$628  million,  with  little  federal  funding  [slide  16].  The                                                               
maintenance and  operations (M&O)  general fund  authorization is                                                               
$153 million, which is a 3.9 reduction from last year.                                                                          
1:59:00 PM                                                                                                                    
MS. RICE  directed attention  to the  historical funding  for M&O                                                               
from FY  83 to FY 15,  noting the red dots  represent the general                                                               
fund budget  and the blue  dots the funding adjusted  against the                                                               
consumer price  index (CPI).  She  remarked how flat the  line is                                                               
despite  the  DOT&PF's  increased  workload  by  adding  runways,                                                               
aprons, or lane  miles.  She anticipated  revenue reductions will                                                               
occur, noting 97  percent of the general fund budget  is spent on                                                               
M&O  so  reductions  in  services  will  occur.    She  said  the                                                               
department  will  do the  best  they  can  with what  they  have.                                                               
Although the department and  legislators will receive complaints,                                                               
she pledged  that DOT&PF will do  its best and she  will keep the                                                               
committee  informed.    Certainly,  it is  difficult  to  predict                                                               
service impacts due to weather.   For example, this year could be                                                               
a  low snow  year and  require less  plowing, but  if Alaska  has                                                               
significant inclement  weather, it will mean  the department must                                                               
also seek supplemental funding.                                                                                                 
2:01:51 PM                                                                                                                    
CO-CHAIR   HUGHES  asked   for  further   clarification  on   the                                                               
definition  of lane  miles.   She related  a scenario  with a  10                                                               
mile, four-lane  road and asked  whether it would  translate into                                                               
40 miles of center line miles.                                                                                                  
MS. RICE answered that is exactly correct.                                                                                      
2:02:10 PM                                                                                                                    
MS. RICE directed  attention to the FY 16 Capital  Budget of $1.2                                                               
[billion].  Referring to the  pie chart, she reported the federal                                                               
funding  for the  FY 16  capital program  of $1.096  [billion] as                                                               
shown  in  green,  the  state   equipment  fleet  budget  of  $53                                                               
[million] including  the reimbursable bond fund  and M&O overhaul                                                               
funds shown  in blue.   The  right side of  slide 19  details the                                                               
federal funding by agency for a total of $1.096 [billion].                                                                      
MS.  RICE briefly  discussed the  federal capital  program trends                                                               
[slide  20].   The chart  identifies the  SHAKWAK [Canada],  ARRA                                                               
[American  Recovery   and  Reinvestment   Act  of   2009],  small                                                               
programs, earmarks  & set asides,  and core program.   The DOT&PF                                                               
projects  the funding  for 2015  since the  most current  federal                                                               
funding under  [MAP 21]  runs through May  and the  Congress will                                                               
need to reauthorize the federal funding.                                                                                        
2:03:30 PM                                                                                                                    
MS. RICE  directed attention  to the  state capital  program that                                                               
includes everything  except the  matching funds  [slide 21].   As                                                               
previously discussed in  terms of a [dedicated]  fund, the purple                                                               
depicts bonds,  which lends an  expectation that the  DOT&PF will                                                               
deliver those projects right away.   Thus, it would be helpful to                                                               
have resource leveling.                                                                                                         
2:03:59 PM                                                                                                                    
CO-CHAIR FOSTER  offered his  belief that the  FY 13  funding was                                                               
Ports and Harbors GO Bonds.                                                                                                     
MS. RICE replied  she believed it was a combination  of Ports and                                                               
Harbors GO Bonds but also GO Bonds for roads.                                                                                   
CO-CHAIR FOSTER  asked for further  clarification on  the funding                                                               
in 2009.                                                                                                                        
UNIDENTIFIED SPEAKER answered that it was ARRA funding.                                                                         
2:04:28 PM                                                                                                                    
MS. RICE  directed attention to  the DOT&PF  capital construction                                                               
projects,  pointing  out  the department  does  not  receive  the                                                               
authority  the same  year projects  are  constructed [slide  22].                                                               
Funding has  been fairly  even because the  DOT&PF is  limited by                                                               
the amount of work it can develop  and generate at one time.  She                                                               
said  the projected  FY 15  capital construction  funding revised                                                               
projection is  $548.5 million noting  this is different  than the                                                               
amount shown on the slide.                                                                                                      
2:05:04 PM                                                                                                                    
MS.  RICE explained  the Highway  Trust Fund  (HTF) provides  the                                                               
source of funding for the  federal program, including highway and                                                               
transit  [slide 23].   Historically,  the source  of most  of the                                                               
funding is from the federal gas  tax [, federal motor fuel excise                                                               
tax,] of  $.18 per  gallon, she  said.   The federal  [motor fuel                                                               
excise] tax has  not increased since 1997 or been  indexed to the                                                               
cost of living.  This means  the Highway Trust Fund (HTF) is also                                                               
short of  funds, she said.   In response to Co-Chair  Hughes, she                                                               
agreed the  $.18 is  a federal  [motor] fuel  [excise] tax.   Not                                                               
only is the  tax not indexed for inflation,  but people's driving                                                               
habits have changed  since many younger people choose  not to own                                                               
cars or drive  as much, she said.  Further,  fuel efficiency also                                                               
impacts the  federal [motor fuel  excise] tax to the  extent that                                                               
general funds  have been appropriated  to the Highway  Trust Fund                                                               
(HTF) to  keep it solvent.   She  reported that the  latest bill,                                                               
MAP-21  [Moving  Ahead for  Progress  in  the 21st  Century  Act]                                                               
funding runs through May 2015.                                                                                                  
2:06:36 PM                                                                                                                    
MS.   RICE  elaborated   on   MAP-21   funding  [slides   24-26].                                                               
Historically,  the federal  funding  authorization bills  spanned                                                               
six years,  but MAP-21,  which has  been reauthorized  once, only                                                               
covers two  years.  Essentially,  federal funding is  not keeping                                                               
up, she said.   In addition, infrastructure on  major highways is                                                               
aging out  since most structures, including  bridges are designed                                                               
for 50 years.                                                                                                                   
MS. RICE projected federal funding at  $485 million.  Most of the                                                               
nation believes  that transportation infrastructure is  built out                                                               
so  MAP-21 focuses  most of  the funding  on the  main corridors.                                                               
Thus,   the   National   Highway  System   (NHS)   will   receive                                                               
approximately 57 percent  of the funding, she said.   She pointed                                                               
out  the  definition   for  the  NHS  to   the  National  Highway                                                               
Performance Program  (NHPP), with measures, such  as limiting the                                                               
number of structurally deficient bridges  on the corridor or else                                                               
be subject  to sanctions.   Essentially,  this means  the federal                                                               
program  would decrease  the funding  for  other federal  funding                                                               
categories  as sanctions  and the  state would  need to  put more                                                               
funds in the NHS until the state met the performance standards.                                                                 
2:08:15 PM                                                                                                                    
CO-CHAIR HUGHES,  referring to the  comment about the  sense that                                                               
infrastructure in  the US was built  out so the federal  shift is                                                               
focused on  corridors.  She  asked whether the  DOT&PF emphasized                                                               
that  Alaska's infrastructure  is not  built out  to the  federal                                                               
program.  She  further asked whether Alaska  has suffered because                                                               
of  the  change  in  philosophy and  emphasis  on  transportation                                                               
corridors at the national level.                                                                                                
MS. RICE answered  yes.  She explained that  whenever rule making                                                               
or  laws change,  the DOT&PF  comments;  however, western  states                                                               
have a "small" voice.  She  commented that Alaska is unique since                                                               
it is the least built out of any state.                                                                                         
CO-CHAIR  HUGHES asked  whether  any effort  to  address this  is                                                               
being  made  by western  states  and  to re-examine  the  overall                                                               
infrastructure in states west of the Mississippi River.                                                                         
MS. RICE answered  yes, that the DOT&PF  communicates about these                                                               
issues with Alaska's Congressional Delegation.   In terms of MAP-                                                               
21, Alaska  is considered  a "donee" state  instead of  a "donor"                                                               
state, which means for every $1  the state puts in it receives $5                                                               
back, which  is an issue to  many states.  Thus  some issues work                                                               
in Alaska's favor so the state must walk a "tightrope."                                                                         
2:10:24 PM                                                                                                                    
MS. RICE directed  attention again to the MAP-21  emphasis on the                                                               
National Highway  System (NHS)  [slide 27].   This means  that 18                                                               
percent of road  miles garner 57 percent of  federal aid funding.                                                               
She  pointed  out  other  types  of funding  [shown  on  the  pie                                                               
charts].  She  offered to cover the categories in  more detail at                                                               
a later date or to send a fact sheet.                                                                                           
CO-CHAIR HUGHES  asked whether anyone  had an interest in  a more                                                               
detailed  presentation and  offered to  inform the  department if                                                               
members prefer more detail.                                                                                                     
2:11:02 PM                                                                                                                    
MS. RICE  referred to the  MAP-21 allocation to the  STP [Surface                                                               
Transportation  Program], which  can be  spent [on  any modes  of                                                               
transportation]  [slide   28].    With  MAP-21   many  individual                                                               
programs were removed  and states needed to use  the STP [Surface                                                               
Transportation  Program] funding.   Thus,  not only  was the  STP                                                               
reduced, but  additional requirements were added  to the program,                                                               
such as  adding performance measures.   She offered that  the STP                                                               
is  DOT&PF's most  flexible  funding,  but it  is  limited.   She                                                               
pointed  out that  $15  million in  funding  for urban  clusters,                                                               
based  on census  data, is  designated to  a special  category of                                                               
communities  with  a population  over  5,000  and under  200,000,                                                               
which  includes  Fairbanks,  Juneau,  Kenai,  Ketchikan,  Kodiak,                                                               
Sitka, Palmer, [and Wasilla].   She highlighted that Anchorage is                                                               
over 200,000 in population, but  has [Anchorage Metropolitan Area                                                               
Transportation Solutions] funding [slides 29-30].                                                                               
2:12:54 PM                                                                                                                    
MS.  RICE  informed members  that  the  Shakwak funding  for  the                                                               
Alaska  Highway has  been eliminated  [slide 31].   She  reported                                                               
that the  Yukon [Canada]  has been  providing maintenance  on the                                                               
Haines  and  Alaska  Highways by  agreement  between  Alaska  and                                                               
Canada  and  up  until  now  the US  has  allocated  $30  million                                                               
annually  for that  purpose.   In  addition,  the Forest  Highway                                                               
Program  (FHP) was  eliminated.   The  $9 million  in FHP  annual                                                               
funding to build  highways in national forests  has been replaced                                                               
by a $7  million program on all federal lands  [the Federal Lands                                                               
Access Program  (FLAP)].   The FLAP program  is available  to any                                                               
federal agency and they all apply, she said.                                                                                    
2:13:35 PM                                                                                                                    
MS.  RICE directed  attention to  the performance  mandate [slide                                                               
32].   The Federal  Highways Administration  (FHWA) will  set NHS                                                               
performance measures  for pavements and bridges,  safety, freight                                                               
mobility, and congestion.   She recalled the FHWA  had a deadline                                                               
of a year  ago; however, the FHWA extended the  deadline, and the                                                               
DOT&PF is currently commenting on the proposed rules.                                                                           
2:14:33 PM                                                                                                                    
MS. RICE, in response whether a  slide had been covered, said she                                                               
skimmed  over the  last  slides; however,  the  final two  slides                                                               
provide contact information and website links [slides 33-34].                                                                   
2:16:17 PM                                                                                                                    
There being no  further business before the  committee, the House                                                               
Transportation  Standing  Committee   meeting  was  adjourned  at                                                               
[2:16] p.m.                                                                                                                     

Document Name Date/Time Subjects
Jan 27 House Transpo Overview 2015 - Final.pdf HTRA 1/27/2015 1:00:00 PM
Jan 27 Public Facilities House Transportation FINAL.pdf HTRA 1/27/2015 1:00:00 PM