Legislature(2003 - 2004)
03/28/2003 09:04 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
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MINUTES
SENATE FINANCE COMMITTEE
March 28, 2003
9:04 AM
TAPES
SFC-03 # 35, Side A
SFC 03 # 35, Side B
CALL TO ORDER
Co-Chair Gary Wilken convened the meeting at approximately 9:04 AM.
PRESENT
Senator Gary Wilken, Co-Chair
Senator Lyda Green, Co-Chair
Senator Con Bunde, Vice Chair
Senator Lyman Hoffman
Senator Donny Olson
Senator Ben Stevens
Senator Robin Taylor
Also Attending: NANCY SLAGLE, Director, Division of Administrative
Services, Department of Transportation and Public Facilities; JON
MACKINNON, Deputy Commissioner of Highways and Public Facilities,
Department of Transportation and Public Facilities; GEORGE CAPACCI,
Captain, General Manager, Marine Highways System, Department of
Transportation and Public Facilities; JEFF OTTESEN, Acting
Director, Division of Statewide Planning, Department of
Transportation and Public Facilities;
Attending via Teleconference: There were no teleconference
participants.
SUMMARY INFORMATION
SB 100-APPROP: CAPITAL PROJECTS
The Committee heard overviews of the requests of the Department of
Transportation and Public Facilities. The bill was held in
Committee.
HB 12-HARASSMENT BY ELECTRONIC COMMUNICATION
This bill was scheduled but not heard.
SENATE BILL NO. 100
"An Act making capital appropriations and reappropriations;
capitalizing a fund; making appropriations under art. IX, sec.
17(c), Constitution of the State of Alaska, from the
constitutional budget reserve fund; and providing for an
effective date."
Co-Chair Wilken referenced a listing of deferred maintenance
projects as requested at the previous hearing. Other handouts
relating to discussions at the previous hearing were also
distributed. [Copies on file.]
NANCY SLAGLE, Director, Division of Administrative Services,
Department of Transportation and Public Facilities detailed the
handouts.
Ms. Slagle noted the listing of emergency maintenance projects also
provided.
Ms. Slagle informed that Department is preparing responses to the
questions regarding capital fund and Chandalar issues.
JON MACKINNON, Deputy Commissioner of Highways and Public
Facilities, Department of Transportation and Public Facilities,
detailed the Chandalar project. He noted that labor costs are
higher and overtime costs are necessary. He furthered that
additional site preparation is required, as the facility is to be
located on permafrost and the hillside surrounding the facility
must be excavated to allow for future development. He also noted
construction costs statewide have increased 15-20 percent,
particularly for mechanical and electrical work due to higher
standards, which was not accounted for at the time the project was
planned. He also informed that due to the increased construction
activities resulting from the passage of the bond package, it would
be more difficult to secure contractors for this project.
The Committee heard overviews on the main appropriation items and
posed questions on specific allocation projects within those
appropriations as follows.
Statewide Federal Programs
$1,500,000 CIP receipts
$65,975,000 federal receipts
$53,871,000 general funds Match (G/F Match)
$412,500 general funds/mental health funds (GF/MH)
$412,500 Mental Health Trust Authority Authorized Receipts
(MHTAAR)
$12,000,000 Statutory Designated Program Receipts (SDPR)
Reference No.: 6764
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2008
On-going Project
Statewide Programs
Mr. MacKinnon noted the general fund match requirement for this
item is approximately $54 million.
Ms. Slagle spoke to the general fund/mental health receipts
included in this item, explaining these funds are specific to the
coordinated transportation and vehicles program, which provides
assistance for non-profit organizations to provide transport
vehicles in local communities.
Ms. Slagle pointed out this item includes the Airport Improvement
Programs and federal highway programs, and the amounts are based on
the estimated amount of federal appropriation. She shared these
figures are "cautiously optimistic."
Airport Improvement Program
$143,581,163 federal receipts
$12,468,800 International Airport funds
Reference No.: 7470
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2008
On-going Project
Federal airport improvements as outlined in the Airport
Improvement Program and the International Airports Program.
Mr. MacKinnon listed variety of projects undertaken with these
funds including: equipment buildings, lighting systems, and airport
taxiway improvements.
Senator Olson asked whether this item includes any funding for the
Ted Stevens Anchorage International Airport.
Ms. Slagle responded this item does not include any appropriations
for the Anchorage airport, as negotiations are underway with the
airlines association with regard to funding for terminal
modifications and other projects included in the five-year Capital
Improvement Project (CIP). She anticipated an amendment to the FY
04 capital budget would be submitted once the negotiations are
completed.
Federal Emergency Projects
$25,000,000 federal receipts
Reference No.: 38424
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2008
One-Time Project
Emergency funds from the Federal Highway Administration for
declared emergencies. Within 180 days funded at 100% federal;
after that, about 9% State match is needed. May be used to
address issues of emergency nature with federal airport or
highway formula funds.
And
Federal Contingency Projects
$15,000,000 federal receipts
Reference No.: 31376
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2008
On-going Project
Special national discretionary funding for highways or
airports may be accepted through this appropriation. May be
used to address issues of emergency nature with federal
airport or highway formula funds. Also used in cases where a
revised program is not feasible.
Senator B. Stevens asked if this request for receipt authority is
in anticipation of projects.
Ms. Slagle affirmed this item is intended to cover any unexpected
emergencies, such as floods or earthquakes. She informed that
additional funds could be requested to address earthquake damage
near Tok as more damage is discovered. She listed the estimated
cost of damage resulting from the earthquake at $60 million.
Senator B. Stevens asked the total appropriation in FY 03 for those
items, including supplemental appropriations.
Ms. Slagle could not speak to specific amounts, explaining that the
funds have also been utilized for some cost overruns. She stated
that all funds appropriated in FY 03 have been expended.
Senator B. Stevens asked if the funding source appropriated for
contingency projects is the same as that appropriated for emergency
projects.
Ms. Slagle replied that the funding sources are different. She
stated that in the past the funding has been combined into one
request, although it has been determined the two items should
become separate.
Senator Bunde asked if federal regulations permit cost overruns of
the contingency projects to be treated as emergency projects.
Ms. Slagle answered no, which she stated is the reason the items
are separated. She explained that federal government does not
require separate accounting, although it allows for better tracking
within the Department.
Senator Hoffman requested the complete funding amount anticipated
in FY 04 for the Airport Improvement Program, Reference No. 7470.
Alaska International Airport System: Development Fund
$6,000,000 International Airport funds
Reference No.: 38425
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2008
On-going Project
These funds may be used for design and construction of both
exclusive-use and common-use AIAS projects. The funds allow
for timely response to airport tenant development needs and
are required by the operating agreement in place between
signatory air carriers and DOTPF/AIAS.
Senator Hoffman noting fluctuation in previous appropriations for
this item asked whether communities submit requests for projects.
Ms. Slagle replied this request is in line with the operating
agreement with airlines to address particular items. She stated she
would provide an accounting of how funds spent in the past and
planned expenditures.
Senator Olson asked whether the source of funding for this item and
Reference No. 7470 is revenues or general funds.
Ms. Slagle replied the $6 million for this item is International
Airport Revenue funds generated from landing fees, lease fees, etc.
Senator Olson asked if these projects involve general funds.
Ms. Slagle answered they do not.
Senator Olson asked about the $12 million appropriation for
Reference No. 7470.
Ms. Slagle explained that the item represents a summary of several
projects including Reference No. 38425.
Bethel: Safety, Taxiway, Apron and Road Improvement
$6,600,000 federal receipts
Reference No.: 38409
Category: Transportation
Location: Bethel
Election District: Bethel
Estimated Project Dates: 07/01/2003 - 06/30/2008
State Match Required
Phased - New Project
Expand runway 18-36 safety area; construct new general
aviation apron, taxiways and access road; expand old general
aviation apron as a new air taxi apron; expand the exiting
north air taxi apron and add new highway access road
connection; extend taxiway M to runway 18-36. Initial project
scoping phase will define State 1 scope of work.
Senator Bunde asked if the proposed air taxi apron would include
areas for aircraft tie-downs and the fees to utilize the tie-downs.
Ms. Slagle responded that the project would include tie-downs, but
did not know the cost.
Senator Bunde commented that no fees are charged for tie-downs at
the Anchorage airport and suggested the Department research the
matter.
Ms. Slagle assumed that with implementation of changes to aviation
revenue, this would be considered. She stated the Department was
undergoing efforts to match agreements with fair market values.
Senator Olson commented that liability could be increased in the
event of damage caused from use or failure of the tie-downs.
Senator Bunde suggested aircraft owners should utilize the tie-
downs at their own risk.
Senator Taylor understood international airport receipts are not
dedicated but rather are general funds. He remarked that the
legislature has full authority to expend those funds at its
discretion. He spoke of the historical protection of those funds
and the ability of airlines to negotiate the amounts they are
willing to pay for landing fees based on the improvements they
want.
Ms. Slagle stated that the international airport fund is
established in statue as an enterprise fund for operational and
capital expenses of airports. She warned that receipt of federal
funds could be jeopardized if they were diverted to other purposes.
Senator Bunde clarified that he did not intend to single out Bethel
in his comments, as other improvements elsewhere in the State are
planned.
Anchorage Metropolitan Area Transportation System (AMATS)
Projects
$68,734,000 federal receipts
Reference No.: 38515
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2008
Anchorage Metropolitan Area Transportation System (AMATS)
Projects
Mr. MacKinnon defined this item as those projects planned for the
Anchorage area.
Surface Transportation Program
$350,000 CIP Receipts
$414,742,600 federal receipts
$1,000,000 general funds
Reference No.: 32610
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2008
State Match Required
On-going Project
Federal surface transportation improvements as outlined in the
Statewide Transportation Improvement Program (STIP), the
Transportation Equity Act for the 21st Century (TEA-21), and
annual federal appropriations acts.
Mr. MacKinnon outlined this item.
Alaska Marine Highway: Juneau-Petersburg Fast Vehicle Ferry
$40,000,000 federal receipts
Reference No.: 38466
Category: Transportation
Location: Southeast Alaska
Election District: Southeast Districts 1-5
Estimated Project Dates: 07/01/2003 - 06/30/2008
One-time Project
Design and build a Fast Vehicle Ferry for the Juneau-
Petersburg day ferry service. An element of the Southeast
Plan.
And
Alaska Marine Highway: Ketchikan-Wrangell-South Mitkof Fast
Vehicle Ferry
$28,000,000 federal receipts
Reference No.: 38465
Category: Transportation
Location: Southeast Alaska
Election District: Southeast Districts 1-5
Estimated Project Dates: 07/01/2003 - 06/30/2008
One-time Project
Design and build a Fast Vehicle Ferry for the Ketchikan-
Wrangell day ferry service. Sister ship to Sitka fast vehicle
ferry. An element of the Southeast Plan.
Senator Taylor noted none of the proposed fast ferries had been
constructed and relayed the Southeast Conference recommendation
that the first vessel operate for two years to measure its
effectiveness before additional vessels were constructed. He
exclaimed that the fast ferry project for British Columbia Canada
failed.
GEORGE CAPACCI, Captain, General Manager, Marine Highways System,
Department of Transportation and Public Facilities, countered that
the Alaska project is completely different than the project in
British Columbia. He told of similar vessels successfully operating
in the Irish Sea under harsher conditions. He reminded that the
intent is that the Alaska ferries would not earn a profit and
stressed that the Alaska Marine Highway fleet would not be entirely
replaced by fast ferries, but rather a combination of traditional
and fast ferries would be utilized.
Senator Olson asked the displacement of these vessels.
Mr. Capacci responded that larger and faster ferries operate
elsewhere in the world, and the proposed smaller vessels would meet
the needs in Alaska.
Co-Chair Wilken asked about the British Columbia fast ferries
program.
Mr. Capacci explained that speed is a necessity for Alaska, while
is only a "luxury" for British Columbia.
Alaska Marine Highway: Saxman Terminal
$1,400,000 federal receipts
Reference No.: 38327
Category: Transportation
Location: Saxman
Election District: Ketchikan
Estimated Project Dates: 07/01/2003 - 06/30/2008
State Match Required
One-time Project
Construct a terminal in the vicinity of Saxman to accommodate
shuttle ferry operations from Annette Island.
Senator Bunde questioned the need for a new facility located in
Saxman and asked why the existing Ketchikan terminal could not be
utilized.
Mr. Capacci noted Saxman is closer to Annette Island and stated the
location of a terminal in Saxman would relieve congestion in
downtown Ketchikan.
Senator Bunde asked the number of people whom this new vessel would
serve.
Mr. Capacci replied that Metlakatla, located on Annette Island, is
a small community.
Co-Chair Wilken acknowledged this has been an issue of Senator
Taylor's for many years and requested the Department provide
additional information and assistance to Senator Taylor.
Senator Taylor asserted these funds could construct roads in his
district with small ferries as connectors. He charged that the
Department is keeping communities isolated. He challenged the
comparisons to the British Columbia fast ferry program.
AT EASE 9:48 AM / 9:49 AM
King Cove and Cold Bay Hovercraft Terminals
$6,000,000 federal receipts
Reference No.: 38470
Category: Transportation
Location: Southwest Alaska
Election District: Southwest Districts 36-38
Estimated Project Dates: 07/01/2003 - 06/30/2008
State Match Required
Phased-underway Project
Construct hovercraft terminals near King Cove and at Cold
Bay's all-season airport. The terminal access road is funded.
Senator Hoffman asked the current status of this project to provide
assess between King Cove and Cold Bay and whether the communities
support the project.
JEFF OTTESEN, Acting Director, Division of Statewide Planning,
Department of Transportation and Public Facilities, responded that
the two communities were pursuing this project utilizing a
hovercraft and partial roadways "reluctantly" with the ultimate
goal of connecting the communities entirely with a road. He
emphasized this is not a Department of Transportation and Public
Facilities project.
Senator Hoffman asked if this appropriation would provide the final
funding for this project.
Mr. Ottesen understood it would.
Senator Olson asked if other hovercrafts were currently operating
in this location.
Mr. Ottesen responded that currently one hovercraft is operating
and a second vessel is under consideration. He explained the water
conditions and the absence of a breakwater.
North Denali Access Study Engineering Support
$250,000 federal receipts
Reference No.: 38464
Category: Transportation
Location: Denali Borough
Election District: Unidentified Election District
Estimated Project Dates: 07/01/2003 - 06/30/2008
State Match Required
One-time Project
Departmental engineering support of the North Denali Access
study being undertaken by the Denali Borough with TEA-21 High
Priority funds.
SFC 03 # 35, Side B 09:52 AM
Co-Chair Wilken asked how these funds relate to other projects
underway in this area.
Mr. Ottesen told of efforts to allocate funds to the Denali Borough
with the intent the Borough would assume leadership of the project
and estimated this item is related. He stated he would research the
matter and provide information to the Committee.
Co-Chair Wilken surmised the Borough is using these funds to
"torpedo the project".
North Slope Oilfield Connector Roads and Colville River Bridge
$1,000,000 general funds
Reference No.: 38460
Category: Transportation
Location: Nuiqsut
Election District: Arctic
Estimated Project Dates: 07/01/2003 - 06/30/2008
Develop industrial use roads to provide all season access to
new oilfield exploration/production areas in and near NPR-A.
It also provides important all-season access for the village
of Nuiqsut.
Co-Chair Wilken asked why this project is not funded with National
Petroleum Reserve - Alaska (NPR-A) receipts. He requested Mr.
Ottesen research the matter.
Mr. Ottesen told of the limited number of operating days currently
available on the ice roads.
Co-Chair Wilken focused on the funding source and directed the
Department to investigate utilizing NPR-A receipts.
Surface Transportation Preconstruction
$75,000,000 federal receipts
Reference No.: 36366
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2003 - 06/30/2008
State Match Required
Phased Project
Funding for preliminary engineering costs and Right of Way and
utility costs less than $750,000.
Senator Hoffman asked how much of the appropriation is to purchase
right of ways.
Mr. Ottesen explained that every year right of way costs vary for
each project and are difficult to predict.
Senator Hoffman understood, but pointed out that an estimate is
necessary to prepare a funding request.
Mr. Ottesen indicated the right of way estimate is included in the
Statewide Transportation Improvement Program (STIP)
Senator Hoffman asked whether specific right of ways are identified
for purchase using this appropriation.
Five Finger Lighthouse Access Improvements
$245,000 federal receipts
Reference No.: 38317
Category: Transportation
Location: Kake
Election District: Cordova/Southeast Islands
Estimated Project Dates: 07/01/2003 - 06/30/2008
State Match Required
One-time Project
Establish a pedestrian access to the Five Finger Lighthouse by
constructing a ramp with tram for lifting boats and people
safely from tidewater to the concrete deck surrounding the
lighthouse.
Senator Taylor asked who owns the lighthouse.
Mr. Ottesen responded that a nonprofit association has acquired the
lighthouse and either owns or leases the facility.
Senator Taylor understood a nonprofit organization plans to operate
a bed and breakfast at the facility and commented on the proposal
that the State expend $250,000 to enable this venture.
Co-Chair Wilken requested further detail on this item.
Northern Region: Winter Trail Markings
$258,500 federal receipts
Reference No.: 36443
Category: Transportation
Location: Central Alaska
Election District: Central Districts 6-11
Estimated Project Dates: 07/01/2003 - 06/30/2008
State Match Required
Phased Project
Mark overland winter trails in Northern Region with permanent
trail markers. Trail markers will ensure winter travelers can
safely journey between communities in the area.
Senator Olson asked the location of these markers and whether the
funding amount in this request would be adequate to ensure the
safety of travelers.
Mr. Ottesen described the on-going project to mark areas. He
informed that user groups are assisting in the installation of the
markers and surmised the amount of funding in this request would be
adequate in context to previous appropriations.
Federal Aid Highway Program Match from Bond Interest Earnings
$2,250,000 Northern Tobacco Securitization Corporation (NTSC)
Bond
Reference No.: 38523
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2004 - 06/30/2009
Replaces federal and highway general fund match with Northern
Tobacco Securitization Corporation investment earnings on bond
proceeds.
Mr. MacKinnon explained this item relates to the replacement of
general funds with tobacco settlement funds as the match
requirement for highway projects.
Co-Chair Wilken asked the purpose of this fund source change.
Co-Chair Wilken encouraged members to further review the Department
of Transportation and Public Facilities budget requests.
Senator Bunde recommended the Department provide more information
on request items in future years.
Co-Chair Wilken agreed. He noted the Chandalar project would be a
multiple year appropriation.
Co-Chair Green commented to the "heart" of transportation system.
She charged that the signage requirements of small businesses
located along the road system have been negatively impacted further
by Department inspections. She informed she would review the
proposed budget to ensure relief is provided to these businesses,
calling the Department's actions "a crime".
ADJOURNMENT
Co-Chair Gary Wilken adjourned the meeting at 10:05 AM
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