Legislature(2003 - 2004)
03/05/2004 09:03 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
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+ teleconferenced
= bill was previously heard/scheduled
MINUTES
SENATE FINANCE COMMITTEE
March 05, 2004
9:03 AM
TAPES
SFC-04 # 32, Side A
CALL TO ORDER
Co-Chair Gary Wilken convened the meeting at approximately 9:03 AM.
PRESENT
Senator Gary Wilken, Co-Chair
Co-Chair Lyda Green, Co-Chair
Senator Ben Stevens
Senator Con Bunde
Senator Donny Olson
Also Attending: MIKE BARTON, Commissioner, Department of
Transportation and Public Facilities; JEFF OTTESEN, Director,
Division of Statewide Planning, Department of Transportation and
Public Facilities; NANCY SLAGLE, Director, Division of
Administrative Services, Department of Transportation and Public
Facilities
Attending via Teleconference: From an Offnet Site in Anchorage: KIP
KNUDSON, Deputy Commissioner of Aviation, Office of the
Commissioner, Department of Transportation and Public Facilities
SUMMARY INFORMATION
SB 257-APPROP: CAPITAL PROJECTS
The Committee heard FY 05 capital projects requests from the
Department of Transportation and Public Facilities. The bill was
held in Committee.
SENATE BILL NO. 257
"An Act making capital appropriations and supplemental
appropriations; capitalizing funds; making other
appropriations; making appropriations under art. IX, sec.
17(c), Constitution of the State of Alaska; and providing for
an effective date."
This was the fourth hearing for this bill in the Senate Finance
Committee.
Co-Chair Wilken noted that the purpose of today's meeting is to
hear the Department of Transportation and Public Facilities FY 05
capital budget requests.
Department of Transportation and Public Facilities
MIKE BARTON, Commissioner, Department of Transportation and Public
Facilities, informed the Committee that, "the federal funding
situation is at best murky." The federal FY 05 highway funding
reauthorization, adopted by the United States (US) Senate, was $318
billion. Approximately $400 million of that amount was earmarked
for Alaska in FY 05. US Representative Don Young advocated for a
six-year reauthorization that would amount to $375 billion in FY
05; however this amount has now being reduced to a $280 billion
range. While this would equate to approximately the same level of
highway funding as FY 04, it would not "bode well" for major
highway projects such as the Knik Arm Crossing, the Juneau Access
Program, the Bradfield Canal project and others. However, there are
numerous FY 05 transportation improvement projects that would
benefit Alaskans.
Co-Chair Wilken asked how the federal authorization schedule would
align with the State's budgetary process.
Commissioner Barton stated that while there might be $280 billion
authorized, it would have to be appropriated. Therefore, the
federal funds that are appropriated to the State usually are
received around October first of each year.
Co-Chair Wilken asked whether the assumption in preparing the
Department's FY 05 capital budget request, is that the State would
be receiving $400 million.
Commissioner Barton stated that the Department is currently
operating "under a continuing resolution" that would expire at the
end of April. The Senate has passed its budget; however the House
has not. There is uncertainty in regards to the actions of the
House. The federal situation is dynamic.
Senator Bunde, noting that the list appears to be in alphabetical
order, asked whether it is available in a priority project format.
Commissioner Barton responded that a priority list could be
developed.
Senator Bunde stated that other Departments have presented their
requests in a priority format and that it would interesting to
receive the Department's requests in that manner.
Co-Chair Wilken asked whether the Department has such a list.
JEFF OTTESEN, Director, Division of Statewide Planning, Department
of Transportation and Public Facilities, responded that, while
federal law mandates some projects, others are discretionary to the
State or to sub-recipients such as Metropolitan Planning
Organizations (MPOs). Both the State and the MPOs have their own
prioritization list; however the lists are in constant flux
depending on how a project is proceeding. Such things as
environmental and right-of-way acquisition proceedings affect the
status of a project. While a list could be developed and presented
today, the list would not be static as there are numerous "external
influences."
Commissioner Barton also noted that highway and aviation projects
are separate components of the list.
Senator Bunde understood therefore that a flexible rather than
prioritization approach is preferred. However, it would be helpful
were a general prioritization list, provided.
Co-Chair Wilken stated that the Committee's Department of
Transportation and Public Facilities subcommittee, which he chairs,
could further address this request.
Co-Chair Wilken noted that the Department would be presenting
approximately nine appropriation requests and four large groups of
appropriations and allocations.
Alaska Marine Highway System-Vessel and
Terminal Overhaul and Rehabilitation
$4,063,000 General Funds
Reference No.: 30624
Category: Transportation
Project Type: Renewal and Replacement
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2004-12/31/2005
On-Going Project
Annual maintenance and overhaul on vessels and at terminals,
particularly component or system failures, which will impact
service in the short term. This project contributes to the
Department's Mission by reducing injuries, fatalities and
property damage and by improving the mobility of people and
goods.
NANCY SLAGLE, Director, Division of Administrative Services,
Department of Transportation and Public Facilities stated that this
annual funding request would address maintenance and overhauls of
vessels. This work is required in order to keep vessels
operational. $3.8 million is specific to vessel overhaul and
engines and wastewater/electrical systems and $300,000 is specific
for maintenance of shore-side facilities such as terminals and
warehouses.
Airport Deferred Maintenance
$800,000 General Funds
Reference No.: 30633
Project Type: Deferred Maintenance
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2004-09/30/2005
On-Going Project
To repair the backlog of maintenance items that cannot be done
through the operating budget funding levels. Typical items are
pavement repairs, lighting repairs, fencing repairs, and bird
and animal controls. This project contributes to the
Department's Mission by reducing injuries, fatalities, and
property damage and by improving the mobility of people and
goods.
Ms. Slagle stated that this request would fund maintenance needs
such as lighting, bird control, minor pavement repair, and fencing
at Rural airports. She stated that a list of projects that have
been funded in the past is included with the request.
Senator Bunde asked the reason that some FY 03 projects are
depicted on the list, specifically whether their inclusion
indicates that work on those projects is continuing.
KIP KNUDSON, Deputy Commissioner of Aviation, Office of the
Commissioner, Department of Transportation and Public Facilities
testified via teleconference from an offnet site in Anchorage and
stated that the list is provided to indicate the types of projects
that have received funding in the past. He noted that oftentimes
projects are not determined until after the winter/spring season in
order to determine how airports fared during the harsh winter
weather.
Senator Bunde again announced that receipt of a priority list would
be helpful. Continuing, he voiced concern that the State is paying
for maintaining airports "where there are State leases: in that
people are utilizing those airports without reimbursing the State
for those efforts.
Mr. Knudson responded that information regarding these airport
projects and, specifically whether there are lease-revenues to
support the projects, would be provided.
Senator Bunde suggested that consideration should be provided to
establishing lease-revenue terms at these locations.
Emergency and Non-Routine Repairs
$ 750,000
Reference No: 30634
Project Type: Health and Safety
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2004 - 09/30/2005
On-Going Project
Repairs to transportation facilities needed because of natural
disasters, such as floods, snow, wind, earthquakes, etc. These
repairs would be ineligible for federal funds. Also used to
meet imminent failure needs caused by deferred maintenance.
This project contributes to the Department's Mission by
reducing injuries, fatalities and property damage and by
improving the mobility of people and goods.
Ms. Slagle noted that the funding history of this annual request
has ranged between $500,000 and one million dollars. It is used to
address non-routine or emergency situations that affect State
airports, harbors, highways, and facilities resulting from such
things as mudslides, floods, embankment failure, storm damage, and
bridge failure. These types of things do not qualify for federal
funding. No funding was provided in FY 04 and the funds are
depleted.
Co-Chair Wilken recalled that the reason these items was unfunded
in the FY 04 budget was because it was desired that these types of
things be treated "as a true supplemental expense" that could be
reviewed and discussed. He voiced certainty in regards to how this
request would be addressed in the FY 05 budget.
Facilities Deferred Maintenance and Critical Repairs
$ 1,256,100
$501,200 AHFC Bonds
$754,900 General Funds
Reference No: 30632
Project Type: Deferred Maintenance
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/02/2004-09/30/2005
On-Going Project
To address the most critical deferred maintenance needs of the
Department of Transportation maintained facilities. This
project contributes to the Department's Mission by reducing
injuries, fatalities and property damage and by improving the
mobility of people and goods.
Ms. Slagle stated that this deferred maintenance request would
address facilities maintained by the Department. There is
approximately $34 million in deferred maintenance needs throughout
the State for such things as alarm systems, lighting issues,
electrical issues, and structural issues in storage facilities,
maintenance stations, office facilities, and Court Houses.
Senator Bunde asked regarding how items on the list were
identified.
Ms. Slagle stated that the current priority listing of facilities'
deferred maintenance needs was most recently updated in November
2003. Selections from the list are identified based on available
funding.
Harbor Deferred Maintenance
$600,000 General Funds
Reference No: 7090
Project Type: Deferred Maintenance
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2004-09/30/2005
On-Going Project
To address backlogged deferred maintenance for state-owned
harbors. This project contributes to the Department's Mission
by reducing injuries, fatalities and property damage and by
improving the mobility of people and goods.
Ms. Slagle stated that this request would provide funding to
address the large backlog of State-owned harbors' deferred
maintenance needs. No on-going allocation to address these needs is
included in the Department's budget. She reminded that while
ownership of numerous harbors is slated to be transferred to local
communities, funds would be required to conduct upgrades to floats,
electrical systems, and other needs in harbors that the State would
continue to be responsible for in places such as Port Alexander,
Angoon, Elfin Cove, Hyder, and Petersburg.
Co-Chair Wilken understood, therefore, that this request would
support upgrades to harbors that would be retained by the State.
Ms. Slagle replied that no entity has been identified to which
ownership could be transferred.
Senator Bunde questioned the need to upgrade the harbor at Port
Alexander, as while it was once a thriving community, it is now
quite small. Therefore, he asked whether size of a community is a
determining factor in determining whether to spend, as in this
case, $500,000, on harbor improvements.
Ms. Slagle responded that this information would be provided.
Senator Bunde noted that this type of information is important in
determining the priority of funding requests.
Highway Deferred Maintenance
$ 1,100,000 General Funds
Reference No: 30631
Project Type: Deferred Maintenance
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2004-09/30/2005
On-Going Project
The current backlog of deferred maintenance is $128 million.
The program will address some of the needs that cannot be
funded in the operating budget maintenance funds (M&O -
Maintenance & Operations). Typical items are surface and
embankment repairs, drainage culverts and ditch repairs,
guardrail repairs, marking and sign repairs, and brushing.
This project contributes to the Department's Mission by
reducing injuries, fatalities and property damage and by
improving the mobility of people and goods.
Ms. Slagle noted that this request would address small projects
such as brush cutting and guardrail repair that are not included in
federal highway funding. There is an estimated backlog of $280
million.
State Equipment Fleet Replacement
$15,000,000 Hwy Capitl
Reference No: 30628
Project Type: Equipment
Category: General Government
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2004-06/30/2006
On-Going Project
Replacement and/or refurbishment of equipment and vehicles
which have reached the end of their useful life cycle and all
extension periods and for the continued conversion of vehicles
to alternate fuel and related alternate fuel program expenses.
This project contributes to the Department's Mission by
reducing injuries, fatalities and property damage and by
improving the mobility of people and goods.
Ms. Slagle stated that the Highway Capital Fund is the Department's
annual appropriation that is utilized to replace vehicles in the
State equipment fleet. This request would provide the authorization
required to utilize the funds that are paid into the account
specifically for this purpose.
AMD: Coordinated Transportation and Vehicles
$650,000
$150,000 AHFC Div
$500,000 MHTAAR
Reference No: AMD30648
Project Type: Equipment
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2004-09/30/2005
On-Going Project, Amendment, Mental Health Bill
Competitive grants for coordinated transportation services for
Mental Health Trust beneficiaries whenever possible, or
purchase of vehicles for beneficiaries where coordinated
services are not yet available or appropriate. Performance
Measure: Increase ridership of beneficiaries. This project
contributes to the Department's Mission by improving the
mobility of people and goods.
Ms. Slagle noted that this request would provide vehicles to assist
the disabled.
Mr. Ottesen stated that this project combines several sources
including federal transit money. Rather than targeting a specific
service group such as the elderly or the disabled, the use of these
vehicles is conducted in a coordinated service fashion so that all
groups share in their usage. This approach aligns with a new
federal mandate that requires all federal agencies to coordinate
these transportation services.
Co-Chair Wilken noted that the aforementioned federal funds are not
reflected in the funding source breakout.
Mr. Ottesen affirmed. However, the funds are specified in the
Department's federal program. A portion of these funds is also
reflected in the FY 04 supplemental capital budget request.
Co-Chair Wilken explained that the forthcoming requests reflect the
consolidation of large federal projects that are separated into the
following groupings: federal airport improvement programs;
statewide federal programs; surface transportation programs; and
federal earmarked programs.
Airport Improvement Program
$ 232,841,788
$232,541,788 Fed Rcpts
$300,000 Int Airprt
Reference No: 7470
Project Type: Construction
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2004-06/30/2009
On-Going Project
Federal airport improvements as outlined in the Airport
Improvement Program and the International Airports Program.
This project contributes to the Department's Mission by
reducing injuries, fatalities and property damage and by
improving the mobility of people and goods.
Co-Chair Wilken clarified that this funding is the total for all
the federal airport improvement projects as reflected on the
"Project Review Listing FY 05 Governor's Amended" list [copy on
file] beginning with this reference number on page one and
continuing through the top of page four.
Ms. Slagle stated that Reference Number 6764 is the appropriation
summary for the $232 million in the federal Rural airport
improvement program that is funded by the Federal Aviation
Administration (FAA). These projects have been chosen based on an
review conducted by a Project Evaluation Board based on certain
criteria, based on the State's prioritization of airport projects
as a whole. The Department works closely with the FAA in these
determinations.
Mr. Knudson noted that in FY 03, this FAA program allocated $177
million toward improvements at the State's international and Rural
airports and that, to date this fiscal year, this program has
provided in excess of $179 million. This is good news as the
program is a healthy one. The biggest challenge faced by the State
is getting the projects out to bid.
Co-Chair Wilken commented that this is an extraordinary amount of
funding.
Senator Bunde asked whether the Adak airport, which is identified
in the request, has commercial airline service.
Mr. Knudson responded that Alaska Airlines has signed the
governmental "Essential Air Service contract" and provides twice
weekly service to Adak. This is a one-year renewable contract that
would be extended at least another year.
Statewide Federal Programs
$ 101,495,300
$ 50,000 AHFC Div
$40,436,900 ASLC Bonds
$49,572,600 Fed Rcpts
$11,435,800 G/F Match
Reference No: 6764
Project Type: Construction
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2004-06/30-2009
On-Going Project
Statewide Programs
Co-Chair Wilken stated that this is the summary of the Statewide
Federal Programs as reflected beginning on page four of the
"Project Review Listing."
Ms. Slagle stated that this request regards the authorization of
the State match for federal funding for FAA airport and highway
projects, as well as for the authority for collaborative
reimbursable program money that would allow the State to conduct
projects in conjunction with the highway projects for such things
as utility projects. The State's Highway Safety Grant program is
also included in this request.
Co-Chair Wilken asked whether a new program would be coming online
in FY 06, as the funding source analysis indicates that the State's
funding match requirement would be increasing to $60 million that
year.
Ms. Slagle replied that this would be the State match relating to
the ongoing program.
Co-Chair Wilken noted that Members should note this increase for
future reference.
Surface Transportation Program
$409,023,800
$ 400,000 CIP Rcpts
$408,623,800 Fed Rcpts
Reference No: 32610
Project Type: Construction
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2004-06/30/2009
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. This project contributes
to the Department's Mission by reducing injuries, fatalities
and property damage, by improving the mobility of people and
goods and by increasing private investment.
Co-Chair Wilken stated that the next project grouping, consisting
of Surface Transportation projects, begins toward the bottom of
page four and continues through page nine.
Ms. Slagle stated that this request is presented with the
assumption that the State would receive flat federal highway
funding in FY 05. This would include funding for Statewide
Transportation Improvement Projects (STIP.
Mr. Ottesen noted that this request includes FY 04 STIP projects
that have not currently received Legislative authority. He shared
that due to funding constraints, many projects have been delayed.
Co-Chair Wilken remarked that this request reflects an
extraordinary federal authorization that requires a "nickel and
dime" State match.
Senator Bunde observed that, in response to those who desire the
State's budget to be reduced, the State could refuse these federal
funds in order to achieve that goal.
Congressional Earmarks
$415,229,100
$ 8,000,000 CIP Rcpts
$407,229,100 Fed Rcpts
Reference No: 39037
Project Type: Construction
Category: Transportation
Location: Statewide
Election District: Statewide
Estimated Project Dates: 07/01/2004-06/60/2009
One-Time Project
Expected earmarked federal funds fro Alaska in Federal Fiscal
Year 2005 federal appropriations acts. This project
contributes to the Department's Mission by improving the
mobility of people and goods and by increasing private
investment.
Co-Chair Wilken understood that the State's current level of
funding shortfalls might place some of these Congressional earmarks
in jeopardy.
Ms. Slagle responded that while these programs have been earmarked,
none of them are currently included in any appropriation.
Mr. Ottesen noted that the projects listed in the request are high
priorities of the State and have been transmitted to Alaska's
Congressional delegation by Governor Frank Murkowski. However, as
of yet, their inclusion is not yet confirmed.
Co-Chair Wilken asked whether a prioritization list of the projects
could be provided.
Mr. Ottesen stated that the list would be determined dependent upon
Congressional earmarks.
Senator B. Stevens asked regarding the Federal-Aid Highway State
Match, reference number 32609; specifically whether the $40,500,000
State funding match would be required for the STIP.
Mr. Ottesen replied that this is correct, as that is the State
match amount that would be required for several different
categories of federal surface transportation funding.
Senator B. Stevens asked therefore whether this amount would
include such things as the Community Transportation Program (CTP)
and Anchorage Metropolitan Area Transportation Study (AMATS).
Mr. Ottesen affirmed. "The different categories of funding have
different match ratios ranging from an 80/20" match to 100 percent
federal. The "sweet spot" is 91/9 percent. The Department has
recently enacted a policy that asks for local government
participation equal to that of the State for certain projects. This
has resulted in approximately a ten million dollar reduction in the
request level.
Commissioner Barton voiced optimism that the federal funding would
transpire. He thanked the Committee for its consideration.
Co-Chair Wilken stated that efforts, both on the State and federal
level, must continue. He announced that this concludes the Capital
Project Appropriation presentations.
The bill was HELD in Committee.
ADJOURNMENT
Co-Chair Gary Wilken adjourned the meeting at 09:41 AM
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