Legislature(2011 - 2012)CAPITOL 17
03/31/2011 01:00 PM House TRANSPORTATION
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| Presentation by the Denali Commission | |
| Adjourn |
* first hearing in first committee of referral
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ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
March 31, 2011
1:06 p.m.
MEMBERS PRESENT
Representative Peggy Wilson, Chair
Representative Lance Pruitt, Vice Chair
Representative Eric Feige
Representative Cathy Engstrom Munoz
Representative Max Gruenberg
Representative Pete Petersen
MEMBERS ABSENT
Representative Craig Johnson
COMMITTEE CALENDAR
PRESENTATION BY THE DENALI COMMISSION
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JOEL NEIMEYER, Federal Co-Chair
Denali Commission
Anchorage, Alaska
POSITION STATEMENT: Presented a PowerPoint on the Denali
Commission's Transportation Program.
CHUCK POOL, Member
Transportation Advisory Committee
Denali Commission
Ketchikan, Alaska
POSITION STATEMENT: Presented a PowerPoint overview of the
Denali Commission.
ACTION NARRATIVE
1:06:13 PM
CHAIR PEGGY WILSON called the House Transportation Standing
Committee meeting to order at 1:06 p.m. Representatives Wilson,
Munoz, Feige, and Petersen were present at the call to order.
Representatives Pruitt and Gruenberg arrived as the meeting was
in progress.
^Presentation by the Denali Commission
Presentation by the Denali Commission
1:06:54 PM
CHAIR P. WILSON announced that the only order of business would
be a presentation by the Denali Commission.
1:07:10 PM
JOEL NEIMEYER, Federal Co-Chair, Denali Commission, introduced
himself.
CHUCK POOL, Member, Transportation Advisory Committee, Denali
Commission, introduced himself.
1:08:23 PM
MR. NEIMEYER reported that the Denali Commission's
Transportation Program is managed by Tessa DeLong of Ketchikan,
and is supported by a longstanding contractor, Mike McKinnon of
Juneau, and program assistant Adison Smith of Ketchikan, who
have provided project and program support.
MR. NEIMEYER referred to a photo of Kongiganak, which
illustrates a good indication of the types of projects the
Denali Commission funds [slide 1]. Along the river's edge, the
Kongiganak Barge Landing Facility highlights the type of
waterfront project the Denali Commission funds. Most of the
community projects are situated along the water as a conduit for
commerce. The Denali Commission has also funded road projects
within the Kongiganak community. The airstrip in the background
is not part of the Denali Commission's Transportation program
since the airstrips are under the Federal Aviation
Administration's (FAA) jurisdiction or are state operated
airstrips. He recapped that the Denali Commission's engagements
in rural Alaska projects are waterfront and road projects.
1:10:06 PM
MR. NEIMEYER related the three different types of regional
commissions [slide 2]. The "grandfather" regional commission is
the Appalachian Regional Commission, which has been in existence
since 1965 and consists of 13 states. The Denali Commission
represents only one state, whereas the Delta Region Authority
represents five states. These regions are highlighted on the
slide since they represent the most active and functioning
regional commissions within government. The regional commission
model is a model the government has which focuses on a
particular geographic area, generally because of low-income or
poverty. Of the six regional commissions in the Lower 48, only
two are really active. The other four have the authority but
have not yet received any funding [slide 3].
1:11:41 PM
MR. NEIMEYER stated that the Denali Commission Act of 1998 was
the late U.S. Senator Ted Steven's vision. Since its inception
the Denali Commission has funded nearly 2,000 projects for a
total cost of $1 billion. The agency is an independent quasi
federal-state agency. About 40 percent of the Denali
Commission's work is managed by the SOA. The SOA has brought in
leverage funding to some projects. The Denali Commission
employs certain, specific principles including that it maintains
a small staff and uses existing programs to run projects.
Instead of building up an administrative infrastructure for
itself, the Denali Commission relies on and uses existing
infrastructure such as the Department of Transportation & Public
Facilities' (DOT&PF) engineers. Thus, as funding ebbs and
flows, the Denali Commission should not be in the position of
wondering what to do with its staff.
MR. NEIMEYER related one key thing about the Denali Commission
is that the decisions on projects are made in Alaska. Of the
seven commissioners, six commissioners are non-federal and one
is federal. The Congress has decided that Alaskans will decide
how to spend these funds, he said. Therefore, while the
Congress appropriated $100 million it did not specify how the
funds should be spent, such as to construct the Kongiganak Barge
Landing Facility. Alaskans decided which project to fund and
chose to construct the Kongiganak Barge Landing Facility. He
offered his belief that this is the "magic" of the commission.
The model works in two streams: one stream is the commissioners,
who address all things non-transportation. The Denali
Commission Act provides another body, the advisory committees,
such as the Transportation Advisory Committee, which provides
advice, guidance, and recommendations on transportation
projects. He recapped that the two bodies work in conjunction
with one another [slide 4].
1:14:34 PM
MR. NEIMEYER pointed out the chart shows that in FY 05 the
Denali Commission rose to $140 million although funding has
since declined. In FY 10, the Denali Commission's funding was
nearly $60 million. While the funding for FY 11 is still
uncertain, he anticipated $40 million would be appropriated
[slide 5].
MR. NEIMEYER discussed the Denali Commission's active programs
[slide 6]. He highlighted that its Transportation Program came
from an amendment to the Denali Commission Act, which required
an emphasis on roads and waterfront projects. In 1999, the
Denali Commission developed its own energy program. The primary
purpose of the Denali Commission's initial efforts was focused
on addressing leaking bulk fuel tanks in rural Alaska. If the
U.S. Coast Guard or the Environmental Protection Agency (EPA)
followed through on some of their concerns by shutting down fuel
delivery, it would have effectively shut down the communities,
he said. Fuel is the lifeblood of these communities since fuel
provides electricity, heat and other needs for the communities.
U.S. Senator Stevens saw the need to address these projects. Of
the $1 billion in funding, nearly $300 to $400 million has been
dedicated to resolving bulk fuel issues in upwards of 100
communities thus far, he stated.
1:16:39 PM
CHAIR P. WILSON asked for clarification on the percentage of the
bulk fuel cleanup projects that have been completed.
MR. NEIMEYER responded that the Denali Commission routinely
develops a "universe of need" whether the projects are for
clinic programs or bulk fuel storage or cleanup. The Denali
Commission looks to all the communities that are eligible and
tries to identify whether the issues have been addressed and
defines any barriers. He estimated that the Denali Commission
has completed bulk fuel cleanup in all but 30 communities with
bulk fuel issues. He speculated that the Denali Commission will
probably reach the point when it will need to decide whether
some communities are declining and are no longer viable
communities. He remarked that sometimes the Denali Commission
must make tough decisions.
CHAIR P. WILSON offered her belief that sustainability would be
a big issue.
MR. NEIMEYER agreed. He stated that if communities do not have
the administrative capacity, then the Denali Commission must
first address that issue prior to resolving the infrastructure
problem. He related that early on the Denali Commission made an
intentional choice to develop new bulk fuel facilities and not
remove the bulk tank farms and renovate the brown field sites.
The Denali Commission chose to focus its limited funds on the
problem of failing farms. He stated that of the 100 communities
served, the potential exists for some 400 existing bulk fuel
farm eyesores that are not yet addressed.
1:19:00 PM
MR. NEIMEYER moved from bulk fuel to power plants and
transmission lines, which he related as core operations. The
Denali Commission has expanded on the state's alternative and
renewable energy efforts. The Denali Commission had a request
for proposal (RFP) process for alternative energy projects,
which resulted in an overwhelming response. The legislature has
significantly funded these projects. He highlighted this
illustrates how the Denali Commission was able to identify a
need and through the process the legislature engaged in the
issue.
1:19:48 PM
REPRESENTATIVE FEIGE referred to the bulk fuel storage projects
and asked for an estimate on the number of years the Denali
Commission designs fuel storage tank capacity in the villages.
He observed communities would need enough fuel to last a barge
cycle. He asked whether it is possible to design more capacity
so communities can gradually build up a reserve.
MR. NEIMEYER responded that most systems are designed for eight
or nine month's capacity. He pointed out that often a barge is
not able to get into a village for eight or nine months. He
related that he shares the story of large tank farms for small
villages when he is in Washington D.C. since it never occurred
to people that the barge would be weathered out. He explained
that as the power plants become more efficient they do not need
as much fuel so the alternative energy projects will reduce that
need. He argued that one could require more fuel if a community
was expanding, but generally expansion has been taken up by
capacity of existing power plants. He pointed out that it takes
a certain amount of fuel to run the generator, whether it is at
50 or 100 percent efficiency.
1:21:43 PM
REPRESENTATIVE FEIGE recalled several instances in the Kuskokwim
area in which communities had low water years. The barge may
make it to a certain village such as Aniak, but could not make
it much further. Those communities were "in a world of hurt"
until the water levels came back up or else the communities
would need to fly in fuel, he said.
1:22:10 PM
MR. NEIMEYER turned to another major program, the health
program. The Denali Commission has built over 110 new clinics,
including primary care facilities, hospitals, senior housing,
and other types of health facility programs. He stated that the
Denali Commission's training program has been one of its core
programs. The primary focus of training has been to train for
jobs in rural Alaska. The Denali Commission provided training
in advance of the Kongiganak Barge Landing. The next priority;
would be jobs in rural Alaska. The Denali Commission has a
government coordination program, which coordinates with federal
agencies on effective and better delivery of federal services
and programs. He referred to a resolution passed by the Denali
Commission, Resolution 01-15, relating to sustainability. The
resolution identified that the Denali Commission projects must
be sustainable. At the time it was very controversial and many
agencies had not needed to submit to sustainability. Today,
sustainability is commonly understood as an appropriate way of
doing business.
1:24:06 PM
CHAIR P. WILSON pointed out that the legislature also requires
sustainability in projects in the capital budget before a
community can receive funding. She remarked that sustainability
is important. She acknowledged that it is a new process but the
state cannot continue to fund projects that communities cannot
sustain.
1:24:40 PM
MR. NEIMEYER pointed out with increased fuel costs, airfare, and
material costs all escalating that the sustainability paradigm
has changed quite a bit.
MR. NEIMEYER referred to a pie chart shows the area of funding.
He reiterated the important thing to remember is the total
funding of $1 billion, over 12 years for 2,000 projects, with
the majority of work in energy and health facilities [slide 7].
He related that the transportation program's budget is over $100
million, but it has only been funded in the past four or five
years.
MR. NEIMEYER highlighted the Denali Commission's structure,
including commissioners at the center who provide policy
guidance to the advisory committees. Each advisory committee
has subject matter experts and one or two commissioners are
assigned to each committee [slide 8].
1:25:59 PM
MR. POOL discussed the Transportation Advisory Committee (TAC)
[slide 8]. He stated that the TAC is comprised of eight
appointed members from diverse regions across the state. The
TAC has members from five native corporations in regions, two
registered civil engineers, and an at-large member. He
commented that he represents Southeast Alaska. Former Governor
Murkowski initially appointed the commissioners. The TAC
established a project selection process for road transportation
and waterfront development projects. The ranking criteria was
weighted so the projects with partnerships ranked higher than
those without additional funding. In the process of project
selection, the Denali Commission reached out to partners,
including the Alaska Native Tribal Health Consortium, the State
of Alaska, the U.S. Department of Transportation, the Native
Corporations, and larger municipalities who could administer
funds and projects. Additionally, the Denali Commission used
consulting firms to review communities' ability to
administration design and construction contracts. The Denali
Commission's program consists of 60 applicants per year,
including 30 waterfront and 30 highway projects. The projects
are ranked in terms of whether the applicants have the ability
to execute projects from the initial design and construction
phase. He said the Denali Commission adheres to a rigid
accounting system and accountability to the Office of Management
and Budget. The staff at Denali Commission reviews expenditures
and a project's progress as it goes through the cycle. In
response to Chair P. Wilson, he responded that the
transportation access funds are available to rural areas, which
is defined as any area outside the Anchorage and Fairbanks urban
areas.
MR. NEIMEYER offered an example of project requests. He related
an instance in which the Denali Commission received applications
from the Craig Tribal Community and the City of Craig. He
reported that both projects were funded. He pointed out that an
interesting dynamic has emerged in which municipalities and
tribal entities are coordinating and working together on road
projects.
1:31:14 PM
MR. POOL referred to a photograph of the Sand Point Boat Harbor
[slide 10]. The Denali Commission furnished $1,100,000 and the
Aleutians East Borough contributed $699,000. The project was
completed in February 2011. The more money the local partners
contribute, the higher the ranking in the selection committee
process. However, some communities do not have any funds and
even though their projects do not rank as high, some funds is
usually available to those communities without any available
funding to get the design process started.
1:32:26 PM
MR. POOL referred to the Nunam Iqua Boardwalk Project [slide
11]. He explained many of these projects consist of
constructing boardwalks or using geotechnical synthetic fabric
that sits on tundra.
REPRESENTATIVE GRUENBERG recalled a photo of four-wheeler and
asked whether this boardwalk would be the same type of thing.
MR. POOL agreed. He stated that the fabric is highly effective
and cost effective product that local villagers can install. He
said he was very excited about this type of project and the
Denali Commission has funded quite a few of these projects this
year. In further response to Representative Gruenberg, he
agreed the Denali Commission does not have any aviation programs
so the village student project he mentioned in which students
built an airplane was not a Denali Commission project.
1:33:58 PM
CHAIR P. WILSON asked for clarification on the synthetic fabric.
MR. POOL explained that the material provides support, grass can
grow through the material, but the fabric keeps vehicles from
sinking into the tundra or muskeg. In response to Chair P.
Wilson, he answered that the product is about an inch thick and
does not fill with water or mud. In response to Representative
Petersen, he explained the material is a plastic, a high density
polyethylene, which has a high tensile strength and will float
the traffic.
1:35:12 PM
CHAIR P. WILSON asked whether the material is manufactured or
recycled.
MR. POOL offered his belief that it is a combination of both,
when recycled material is available they Denali Commission will
use it, but most of it is original.
1:35:49 PM
REPRESENTATIVE FEIGE asked for an estimate of the cost
comparison for the polyethylene as compared to constructing a
wooden walkway.
MR. POOL answered that the material cost is higher, but the
installation is less expensive to install the polyethylene since
it does not require any skilled labor. He offered his belief
that the cost is comparable since the geotechnical surface has a
longer service life.
1:36:37 PM
REPRESENTATIVE GRUENBERG referred to a photo of a four-wheeler
on a similar polyethylene walkway in the village of Kwigillingok
[slide 15].
MR. POOL agreed it was the same product. He stated that the
Denali Commission has funded a large variety of waterfront
projects in the past six years from feasibility, through design,
and construction. The Denali Commission learned early on that
in order to keep the process moving and keep the $25 million in
funding moving, the TAC needed to consider all aspects of the
project, from concept, reconnaissance work, construction, and
design. He related that currently, the TAC has 82 projects in
various stages of construction.
1:38:43 PM
MR. POOL explained the TAC's basic function is to process
applications, take public comments, and hear presentations from
partners, including those from the Bureau of Indian Affairs
(BIA), Western Federal Lands Highway Division (WFLHD), and the
Association of Village Council Presidents.
1:40:26 PM
CHAIR P. WILSON asked whether the village councils are using any
of their Indian Reservation Roads (IRR) funds.
MR. POOL answered that much of the IRR funding has been
dedicated to partnership funding.
1:40:39 PM
MR. POOL referred to photographs that depicted waterfront
projects in rural Alaska, including barge facilities for the
City of Bethel. One of the Denali Commission's partners is the
U.S. Army Corps of Engineers (Corps). The Corps has conducted a
statewide study of barge mooring facilities to determine need.
The study reviewed 68 communities' facilities and performed
preliminary analysis and estimates on costs to improve barge
facilities and ports for safer barge landings. A large number
of barge landings in the river systems consist of a tugboat
pushing the barge against a mud bank, which has resulted in
significant erosion due to the effect of the propellers. The
Denali Commission's project is in Phase 4 to fund mooring
facilities. Some of these projects area are sometimes as simple
as driving three or four groups of piles connected by a chain.
Those mooring facilities cost ranges from $200 to $300 thousand
to build. Other communities require unloading staging areas,
riprap. The Denali Commission has 68 mooring facilities planned
with a projected cost of $78 million. The Denali Commission has
been tackling these mooring facility projects at a rate of $3 to
$4 million per year. The TAC works to obtain funding with the
U.S. Corps of Engineers, the communities, and some of the barge
companies. In response to Chair P. Wilson, he agreed these
projects make a big difference to the barge operators.
Ultimately, the Denali Commission hopes the projects will result
in overall cost reductions on freight deliveries. He reported
that with increased fuel costs the fuel savings alone are
significant for barge operators since the operators will not
need to run the barge for eight hours while freight is unloaded.
1:44:32 PM
MR. POOL discussed the integrated construction projects [slides
14-15]. He pointed out that the costs for barge delivery in
Western Alaska can often cost up to $600,000 for delivery of a
barge load of materials. In instances in which communities can
facilitate the delivery of material for two projects instead of
one, the savings are obvious. The TAC works to coordinate other
projects with its partners to enjoy those types of cost savings.
MR. POOL related that the TAC's emphasis is on local hire.
Sometimes it is difficult to accomplish local hire since for
some larger projects so the contractor must bring in its own
crew, but the Denali Commission's goal is to try to keep local
villages engaged. In response to Chair P. Wilson, he advised
that while he has seen some avoidance of local hire, but he has
not seen a substantial amount. He said that more often
subcontractors face simultaneous construction projects happen in
a village, not enough villagers are available to work. He
related a scenario in which several projects happened at
Kongiganak that overwhelmed the work force.
1:48:07 PM
MR. POOL summarized that the TAC has invested over a $100
million since 2005 and 2006 on road improvement and waterfront
development projects, including 33 road projects and 42
waterfront projects. Currently, the TAC has 82 road and
waterfront projects in the planning, design, and construction
phases. In FY 2010 the Denali Commission funded 39 projects.
He provided a handout to members with projects broken down by
partner agencies. He listed the DOT&PF, BIA, Western Federal
Lands Highway Division, U.S. Corps of Engineers, Alaska Native
Tribal Health Consortium, Alaska Village Electric Cooperative,
the Aleutians East Borough, the Association of Village Council
presidents, the Bristol Bay Native Association as project
partners. Additionally, he reported on some municipal projects
including ones in Adak, Akutan, Bethel, Cordova, Craig,
Dillingham, Haines, Hoonah, Ketchikan, King Cove, Kodiak, and
Kotzebue, among others [slides 17-18]. He also pointed out
specific projects in members districts.
MR. POOL said he appreciated the state's $4.9 million in
matching funds for the Denali Commission.
1:52:10 PM
MR. NEIMEYER reviewed the status on the FY 11 projects. He
reported that the Denali Commission has been receiving surface
transportation funds from the SAFETEA-LU a little at a time. He
said the Denali Commission has been prioritizing projects
approved by the Denali Commission's TAC that it believes will
likely go to construction this year. Once the federal budget
has been approved the Denali Commission hopes to move forward
with additional projects.
MR. NEIMEYER discussed Denali Commission policy issues [slide
19]. He explained that the Department of Transportation, Office
of Inspector General's office audited the Denali Commission's
Transportation Program in December 2009. U.S. Senator Kit Bond,
Missouri, asked for the audit. The Denali Commission staff
spent considerable time responding to his concerns. The audit
identified some vulnerability within the program, but auditors
did not find any wrongdoing. The Denali Commission immediately
incorporated some of the recommended changes including recording
its minutes. The federal partner, the Federal Highway
Administration (FHWA) has been supportive and helpful. He
raised this to allow members to access the audit report, which
is on the Denali Commission's website.
1:54:38 PM
MR. NEIMEYER recapped that the main thrust of the report besides
recommending some housekeeping, is that the Denali Commission's
operations are fine and it has provided smaller projects that
serve rural communities. One component the Denali Commission
may one day achieve is to not only provide funding for projects,
but to examine access to resources. Currently, most of the
projects are community based but one day the Denali Commission
may get involved into the Roads to Resources types of projects.
He related that as part of the process for the reauthorization
of Denali Commission, the commission will be holding sessions to
take public comment on the direction commission should take in
its second decade. He advised that the information will be
provided to the Alaska Congressional Delegation for them to
consider. He anticipated that the reauthorization of the
SAFETEA-LU would likely happen in 2012. He recapped that the
Denali Commission is currently working on its reauthorization
and would focus its efforts on the FHWA reauthorization in 2012.
He stated that until then the FHWA will use the current formula
for 2012. The waterfront projects require a 20 percent cost
share in matching funds, whereas the road projects require 9.03
percent in matching funds.
1:56:50 PM
MR. NEIMEYER acknowledged that the SOA has been a good partner.
The legislature and the governor provided nearly $5 million to
the Denali Commission in matching funds for the transportation
program. He stated that all of the matching funds have been
exhausted this year. He reported that two years ago the
governor put forward a $3 million partnership grant and half of
the grant will go towards transportation projects. As of FY 11,
the state will not have any state matching funds remaining, he
said. The Denali Commission has plans to discuss future
matching funds with the administration.
1:58:26 PM
CHAIR P. WILSON asked whether the Denali Commission confers with
the legislative finance committees on matching funds.
MR. NEIMEYER responded that a number of existing members shared
their recollection that prior co-chairs indicated that the
funding was all federal funding. He advised members that he is
sharing that in FY 12 in the transportation program, the Denali
Commission will have a need for nonfederal cost share matching
funds. He acknowledged that now may be a good time to do so.
In response to Chair P. Wilson, he estimated that the Denali
Commission may need up to $9.2 next year. The float project was
funded by the local community, and matching funds are often
provided by the local municipality or borough. He was unsure
whether $2.4 or $2.5 million is the right number but non-federal
matching funds will be required.
CHAIR P. WILSON offered to assist.
2:01:51 PM
MR. POOL also pointed out that it is sometimes difficult to
anticipate which projects will be requested. Once the projects
are prioritized the Denali Commission can identify which
projects will require matching funds. The Denali Commission
needs to have the flexibility to make the apportionment within
the commission rather than identifying earmarks.
CHAIR P. WILSON offered her belief that the communities may know
in advance the amount needed.
MR. POOL agreed that sometimes communities will use IRR funds
for grants or other source of funds. He stated that many small
communities do not have funds available.
2:04:21 PM
REPRESENTATIVE MUNOZ asked whether the City of Juneau has
submitted projects in the past few years.
MR. POOL answered yes. He stated that the City of Juneau
submitted a project located beyond Tee Harbor, and the Denali
Commission funded a boat launch and staging area. He recalled
the Denali Commission also provided funded $500 million in
funding for the project approximately three to four years ago.
In further response to Representative Munoz, he answered that he
was unsure whether other projects have been submitted since
then.
2:05:04 PM
REPRESENTATIVE MUNOZ asked whether the scope was a narrow scope
in terms of accessing areas outside the urban center.
MR. POOL answered not necessarily. He offered that a community
obtains a better score when it has a multi-modal connection such
as including a facility that connects with Gustavus, Hoonah, or
Pelican, such as building a ferry landing, a small cruise ship
dock, a freight dock, or barge landing facility. In further
response to Representative Munoz, he agreed that some
communities are more active than others and that Juneau has not
been particularly active.
2:07:28 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:07
p.m.
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