Legislature(2021 - 2022)SENATE FINANCE 532

03/25/2021 09:00 AM Senate FINANCE

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Audio Topic
09:00:50 AM Start
09:02:16 AM Presentation: Department of Transportation:
10:47:58 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Department of Transportation - Program TELECONFERENCED
Development/STIP/Capital Budget
- Ben White, Director of Program Development
- Rob Carpenter, Deputy Commissioner
Bills Previously Heard/Scheduled
                 SENATE FINANCE COMMITTEE                                                                                       
                      March 25, 2021                                                                                            
                         9:00 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:00:50 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Bishop called the  Senate Finance Committee meeting                                                                    
to order at 9:00 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Click Bishop, Co-Chair                                                                                                  
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Lyman Hoffman                                                                                                           
Senator Donny Olson                                                                                                             
Senator Natasha von Imhof                                                                                                       
Senator Bill Wielechowski                                                                                                       
Senator David Wilson                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
Rob  Carpenter, Deputy  Commissioner and  Statewide Planning                                                                    
Director,   Department   of    Transportation   and   Public                                                                    
Facilities;  Ben  White,  Director of  Program  Development,                                                                    
Department of Transportation and Public Facilities.                                                                             
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
^PRESENTATION: DEPARTMENT OF TRANSPORTATION:                                                                                  
     PROGRAM DEVELOPMENT/STIP/CAPITAL BUDGET                                                                                  
                                                                                                                                
9:02:16 AM                                                                                                                    
                                                                                                                                
ROB  CARPENTER, DEPUTY  COMMISSIONER AND  STATEWIDE PLANNING                                                                    
DIRECTOR,   DEPARTMENT   OF    TRANSPORTATION   AND   PUBLIC                                                                    
FACILITIES (via teleconference),  introduced himself and his                                                                    
colleague.                                                                                                                      
                                                                                                                                
9:02:45 AM                                                                                                                    
                                                                                                                                
BEN WHITE,  DIRECTOR OF  PROGRAM DEVELOPMENT,  DEPARTMENT OF                                                                    
TRANSPORTATION   AND   PUBLIC  FACILITIES,   discussed   the                                                                    
presentation  "Statewide   Transportation  Improvement  Plan                                                                    
(STIP)  Capital  Budget    Advance  Construction"  (copy  on                                                                    
file).                                                                                                                          
                                                                                                                                
Mr. White  turned to  slide 2, "How  we'll walk  you through                                                                    
it":                                                                                                                            
                                                                                                                                
     STIP                                                                                                                       
     CAPITAL BUDGET                                                                                                             
     ADV. CONSTRUCTION                                                                                                          
     IMPROVEMENTS                                                                                                               
                                                                                                                                
Mr.  White   conveyed  that  the   Statewide  Transportation                                                                    
Improvement   Program   (STIP)   was   the   Department   of                                                                    
Transportation  and Public  Facilities'  method of  managing                                                                    
the capital budget.                                                                                                             
                                                                                                                                
9:03:54 AM                                                                                                                    
                                                                                                                                
Mr.  White  spoke  to  slide  3,  "Statewide  Transportation                                                                    
Improvement Plan (STIP)":                                                                                                       
                                                                                                                                
     ?The STIP is a 4-year  plan that is required by federal                                                                    
     regulations (23  USC 135 &  23 CFR 450) that  lists out                                                                    
     all  the federally  funded, and  regionally significant                                                                    
     surface transportation projects within the state.                                                                          
     ?Must be fiscally constrained.                                                                                             
     ?Required to be developed with a public process                                                                            
     ?Approved by Federal Highway Administration (FHWA) or                                                                      
     the Federal Transit Administration (FTA)                                                                                   
     ?Failure to comply with federal regulations and                                                                            
     requirements will jeopardize federal funding for                                                                           
     transportation infrastructure in Alaska.                                                                                   
                                                                                                                                
9:06:17 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman asked about the  bullet that indicated that                                                                    
the STIP had  to be "fiscally restrained."  He recalled that                                                                    
the majority of the funding  was federal. He asked Mr. White                                                                    
to  elaborate  on  the  statement  and  asked  whether  more                                                                    
federal money  could be available  to the state if  it could                                                                    
increase the state match.                                                                                                       
                                                                                                                                
Mr. White  explained that  fiscal constraint  signified that                                                                    
DOT  could not  have more  projects in  the STIP  than there                                                                    
were   funds  available.   He  continued   that  with   each                                                                    
transportation  bill   passed  by  congress  there   was  an                                                                    
anticipation of  how much federal  funding the  state should                                                                    
receive. He said that the  department could not program more                                                                    
projects  than they  had funding  for; the  department could                                                                    
not make  the federal  government provide more  funding than                                                                    
was anticipated.                                                                                                                
                                                                                                                                
9:08:16 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman asked  about  the STIP  being a  four-year                                                                    
plan.  He asked  Mr. White  to explain  the plan  in further                                                                    
detail.                                                                                                                         
                                                                                                                                
Mr. White stated that the  department projected needs out 10                                                                    
years in advance and that  the STIP was the portion required                                                                    
by   the  federal   government.  He   reiterated  that   the                                                                    
department could project  out 10 years and  had a Long-Range                                                                    
Transportation  Plan, which  was identifying  priorities and                                                                    
needs across the state over 40 years.                                                                                           
                                                                                                                                
9:09:10 AM                                                                                                                    
                                                                                                                                
Senator  von  Imhof  asked about  federal  limitations  that                                                                    
might  limit  how  much  the  department  could  put  toward                                                                    
administrative costs versus construction costs.                                                                                 
                                                                                                                                
Mr.  White   relayed  that   some  federal   agencies  would                                                                    
establish  an indirect  cost threshold.  He  cited that  the                                                                    
Federal Transit  Administration a limit  of no more  than 10                                                                    
percent administrative  costs. He  said that  other agencies                                                                    
allowed for negotiations.                                                                                                       
                                                                                                                                
Senator von Imhof asked whether  there was an upcoming slide                                                                    
that  would  show  what portion  of  federal  funding  going                                                                    
toward administrative costs.                                                                                                    
                                                                                                                                
Mr. White agreed to provide the information.                                                                                    
                                                                                                                                
9:10:39 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman noted  that in  past years,  the state  had                                                                    
taken    excellent   opportunities    in   extending    STIP                                                                    
appropriations.  He  wondered  whether  the  department  had                                                                    
worked to capture any redistributed  federal dollars for the                                                                    
state.                                                                                                                          
                                                                                                                                
Mr. White  stated that the department  had worked diligently                                                                    
to  maximize   federal  funding  as  well   as  capture  any                                                                    
redistributed  federal  dollars.  He   said  that  over  the                                                                    
previous two years, DOT had  record amounts of redistributed                                                                    
funds because they  had effective plans that  were ready for                                                                    
proposal.                                                                                                                       
                                                                                                                                
9:12:34 AM                                                                                                                    
                                                                                                                                
Senator Wielechowski asked whether  there were federal funds                                                                    
that Alaska was eligible for but  had not applied for in the                                                                    
last two years.                                                                                                                 
                                                                                                                                
Mr.   White  affirmed   that  the   department  had   worked                                                                    
diligently to  procure federal fund available  to the state.                                                                    
He  stated  that  the  department  had  applied  to  federal                                                                    
discretionary  grant programs.  He noted  that there  was an                                                                    
upcoming slide that would address federal fund obligations.                                                                     
                                                                                                                                
9:13:33 AM                                                                                                                    
                                                                                                                                
Mr.  White addressed  slide 4,  "2020  2023  Planned Funding                                                                    
Distribution":                                                                                                                  
                                                                                                                                
     Northern Total - $1,029,735,661  26 percent                                                                                
     Central Total - $1,632,895,900   40 percent                                                                                
     SouthCoast Total - $429,062,291   11 percent                                                                               
     Statewide Total $814,247,743  20 percent                                                                                   
     AMHS Total - $115,960,000  3 percent                                                                                       
                                                                                                                                
     ?261 Projects in the current STIP                                                                                          
     ?$4B total programmed in the current 4 year STIP, or                                                                       
     ~$1B/Year                                                                                                                  
          ?$660M-$700M/year Highways                                                                                          
     ?Development of 2022-2025 STIP starts this Fall.                                                                           
                                                                                                                                
Mr.  White noted  that the  department had  historically not                                                                    
left any federal dollars on the table.                                                                                          
                                                                                                                                
9:15:04 AM                                                                                                                    
                                                                                                                                
Mr. White  advanced to  slide 5,  "The STIP  Process," which                                                                    
showed   four  connected   flow   charts  entitled   "Needs'                                                                    
Sources,"  "Needs  Evaluation  and  Management,"  "Call  for                                                                    
Projects,"  and "STIP  Cycle." He  explained that  the slide                                                                    
showed  how  the  STIP  was developed.  He  noted  that  the                                                                    
department  would work  closely  with local  constituencies,                                                                    
industry officials, and the military  to determine the needs                                                                    
of the state.  He noted that the department  was starting to                                                                    
look at its own  data, including pavement, bridge condition,                                                                    
and traffic and crash data  on highways. He relayed that the                                                                    
information was  pooled together  to determine the  needs of                                                                    
the state.  He discussed the  process from needs  sources to                                                                    
needs  evaluation and  management. He  detailed the  process                                                                    
for the  call for projects  and the eventual STIP  cycle. He                                                                    
discussed   the  Project   Evaluation  Board   (PEB),  which                                                                    
consisted mainly  of executives  within the  department. The                                                                    
PEB was  a public process,  open to the public  for comments                                                                    
and feedback on the projects and the scoring.                                                                                   
                                                                                                                                
9:18:00 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman asked  Mr. White  to discuss  the PEB.  He                                                                    
asked about the  members of the board and how  to get a seat                                                                    
on the  board. He  assumed that the  board made  the ranking                                                                    
and the  decisions. He queried how  other states prioritized                                                                    
capital projects.                                                                                                               
                                                                                                                                
Mr.  White  explained  that  the  PEB  was  spelled  out  in                                                                    
regulation and  was generally  peopled with  leadership such                                                                    
as  the  commissioner,  deputy  commissioner,  and  regional                                                                    
directors. He  explained that every  state had a  process by                                                                    
which  it  evaluated  projects. Some  states  used  computer                                                                    
systems, and others  used a board, panel,  or committee that                                                                    
evaluated projects.                                                                                                             
                                                                                                                                
Co-Chair  Stedman  thought  some   states  had  a  committee                                                                    
appointed by the governor. He  cited that Alaska's committee                                                                    
was comprised  of only upper  management of DOT,  who ranked                                                                    
all  the  decisions. He  was  concerned  that some  projects                                                                    
might never be  realized. He appreciated the work  of DOT to                                                                    
clearly relay  to communities whether or  not projects would                                                                    
come to fruition and how long those projects would take.                                                                        
                                                                                                                                
9:21:20 AM                                                                                                                    
                                                                                                                                
Co-Chair Bishop asked how many people sat on the PEB.                                                                           
                                                                                                                                
Mr. White replied that the board had six or seven seats.                                                                        
                                                                                                                                
Co-Chair Bishop  assumed regional managers were  part of the                                                                    
board.                                                                                                                          
                                                                                                                                
Mr. White replied in the affirmative.                                                                                           
Co-Chair Bishop thought that the  PEB was similar to a grant                                                                    
review board.                                                                                                                   
                                                                                                                                
9:22:30 AM                                                                                                                    
                                                                                                                                
Mr.  White  referenced  slide 6,  "Federal  Limitation  Over                                                                    
Time,"  which  showed a  bar  graph  demonstrating what  the                                                                    
departments federal  limitation had  been from  FY 10  to FY                                                                    
21. He noted  that there was a slightly upward  trend as the                                                                    
federal government  was putting  a little more  funding into                                                                    
infrastructure. He noted  that the last three  or four years                                                                    
there  had  been  a  significant  increase  in  the  state's                                                                    
federal limitation.                                                                                                             
                                                                                                                                
Mr.  White continued  to address  slide 6.  The blue  on the                                                                    
chart signified federal funds that  came in based on formula                                                                    
with variables such  as population and road  miles. The grey                                                                    
bars  indicated monies  that were  not held  to any  type of                                                                    
funding formula. He  drew attention to FY 10, FY  11, and FY                                                                    
12, which contained earmark funding.                                                                                            
                                                                                                                                
9:24:46 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  asked whether Mr. White  could discuss the                                                                    
funding split between federal and state highways.                                                                               
                                                                                                                                
Mr.   White   acknowledged   that  there   were   functional                                                                    
classifications  for  the  roads  in  the  state  for  which                                                                    
federal funding  could be applied.  In Alaska there  was the                                                                    
National Highway System (NHS)  and the Alaska Highway System                                                                    
(AHS).  He   said  that  the   public  could  look   to  the                                                                    
department's  website  to  determine  whether  the  road  in                                                                    
question was under state or  federal jurisdiction. He shared                                                                    
that each  federal funding source had  restrictions on where                                                                    
the funding  could be applied. The  most flexible allocation                                                                    
of funding  was the  Surface Allocation Block  Grants, which                                                                    
could be  used for both the  AHS and the NHS.  He added that                                                                    
within statute and regulation there  is a defined percentage                                                                    
of  funding   that  the   department  could   consider  when                                                                    
allocating federal funding to the NHS and the AHS.                                                                              
                                                                                                                                
9:27:12 AM                                                                                                                    
                                                                                                                                
Co-Chair    Stedman   referenced    AHS   maintenance    and                                                                    
construction needs.  He wondered  how the  legislature could                                                                    
target  areas  of  funding  for   the  AHS  maintenance  and                                                                    
construction while dealing with  the regulatory split of the                                                                    
funds. He  asked whether the  state was hindered in  any way                                                                    
by the regulatory environment.                                                                                                  
                                                                                                                                
Mr.  White thought  Co-Chair Stedman's  inquiry  held a  few                                                                    
questions.  He noted  that the  department was  working with                                                                    
federal partners  to establish how federal  funding could be                                                                    
spent. He said that federal  funding was typically been used                                                                    
for   construction.  He   explained  that   maintenance  had                                                                    
typically  and historically  been  a state-funded  activity.                                                                    
The department  was working with  the federal  government to                                                                    
develop a  preventative maintenance program. He  shared that                                                                    
the  department  struggled to  balance  NHS  needs with  AHS                                                                    
needs.  He stated  that prioritizing  needs was  one of  the                                                                    
greatest challenges to the department.                                                                                          
                                                                                                                                
9:29:48 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  noted that over the  years the legislature                                                                    
had considered  federal funding and  STIP match  funding. He                                                                    
did  not want  to inadvertently  ignore the  state's highway                                                                    
system. He  thought everyone had heard  the argument against                                                                    
new construction when there was maintenance needed.                                                                             
                                                                                                                                
9:30:52 AM                                                                                                                    
                                                                                                                                
Co-Chair Bishop agreed with  Co-Chair Stedman's comments. He                                                                    
thought  people   needed  a  clearer  picture.   He  thought                                                                    
typically preventative  maintenance would fall  within DOT's                                                                    
preview.  He  thought  Mr.  White  had  expressed  that  the                                                                    
department was  looking to  find more  ways of  funding that                                                                    
day-to-day  maintenance. He  commented that  the legislature                                                                    
had cut  180 positions  from DOT maintenance  and operations                                                                    
and the motor fuel tax had continued to decline.                                                                                
                                                                                                                                
9:32:39 AM                                                                                                                    
                                                                                                                                
Mr. White  discussed slide 7, "Federal  Funds Distribution,"                                                                    
which showed  a table detailing federal  funds distribution.                                                                    
The two larger  funding sources DOT had  throughout the year                                                                    
was the National Highway Performance  Program (FAST) and the                                                                    
Surface Transportation  Black Grants  (STBG), each  of which                                                                    
had  its own  eligibility and  performance requirements.  He                                                                    
said that the  department worked to use the  funds that were                                                                    
most  restrictive, and  earliest  lapsing,  first. He  noted                                                                    
that the funding  was complex, and many  funding codes could                                                                    
be used on one project.                                                                                                         
                                                                                                                                
Co-Chair Bishop  asked Mr.  White to  give the  committee an                                                                    
example of how  many federal funding codes might  be used in                                                                    
a year.                                                                                                                         
                                                                                                                                
Mr. White shared that in  any given year, the department had                                                                    
approximately 20 different funding codes used.                                                                                  
                                                                                                                                
Co-Chair  Bishop asked  whether there  was a  fund that  was                                                                    
easier to access than others.                                                                                                   
                                                                                                                                
Mr. White  explained that  the STBG  was the  most flexible,                                                                    
and the  funds could be  used on nearly any  highway project                                                                    
necessary.                                                                                                                      
                                                                                                                                
9:35:04 AM                                                                                                                    
                                                                                                                                
Mr. White turned to slide  8, "Federal Obligations by Year,"                                                                    
which showed  a bar  graph. He  relayed that  the department                                                                    
worked to obligate  every federal penny given  to the state.                                                                    
He observed  that over the course  of time on the  graph the                                                                    
funds had  fluctuated. He pointed out  the American Recovery                                                                    
and Reinvestment Act  (ARRA) had contributed to  funds in FY                                                                    
15.  He stated  that  the department  had increased  efforts                                                                    
over the  last three year  to seek out more  federal funding                                                                    
from programs that may not  have been maximized in the past.                                                                    
He  noted  here had  also  been  a significant  increase  in                                                                    
August  redistribution in  the last  two years.  The federal                                                                    
government    had   also    provided   additional    highway                                                                    
infrastructure program funding, which  had been allocated to                                                                    
bridge rehabilitation programs.                                                                                                 
                                                                                                                                
9:36:26 AM                                                                                                                    
                                                                                                                                
Senator von Imhof confirmed that  the yellow bar represented                                                                    
funding for the Alaska Marine Highway System (AMHS).                                                                            
                                                                                                                                
Mr. White replied in the affirmative.                                                                                           
                                                                                                                                
Senator von  Imhof observed that  the AMHS funding  had been                                                                    
robust in 2014,  2015, and 2016, but had dropped  to zero by                                                                    
FY 21. She queried the drop in funding.                                                                                         
                                                                                                                                
Mr. White explained  that the numbers were  not complete for                                                                    
2021, which  was why it was  not reflected on the  chart. He                                                                    
said that  in the other  years the numbers could  be because                                                                    
there had been  big program years in 2014  through 2016, and                                                                    
not in the other years.  He noted that funds fluctuated over                                                                    
time and might be indicative of vessel construction.                                                                            
                                                                                                                                
9:38:02 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  asked for an example  of AMHS expenditures                                                                    
represented on the graph.                                                                                                       
                                                                                                                                
Mr. White  stated that much of  the expenditures represented                                                                    
on the graph  were for ferry refurbishment.  He listed steel                                                                    
replacement, engine overhauls, and the like.                                                                                    
                                                                                                                                
Co-Chair Stedman reflected on  concerns that maintenance had                                                                    
not been kept up on for older vessels.                                                                                          
                                                                                                                                
Co-Chair  Stedman asked  about  an old  project involving  a                                                                    
bridge  in Ketchikan  (Gravina  Island  Bridge). He  thought                                                                    
there  was  some residual  clean-up  of  leftover funds.  He                                                                    
asked how such an event might  be reflected in the chart. He                                                                    
asked whether the bridge appropriation  would show up in the                                                                    
chart.                                                                                                                          
                                                                                                                                
9:40:31 AM                                                                                                                    
                                                                                                                                
Mr.  White affirmed  that there  had been  earmarked funding                                                                    
for the  project in Ketchikan.  There had been a  portion of                                                                    
the  funding reused  and reappropriated  for other  parts of                                                                    
the state. He noted that the  chart showed a big increase in                                                                    
FY 19  and FY 20, which  indicated that none of  the funding                                                                    
had lapsed. There  had been a big push the  previous year to                                                                    
obligate the funding  so it would not be lost.  He said that                                                                    
much  of  the  earmarked   funding  had  been  obligated  in                                                                    
Ketchikan over the last two years.                                                                                              
                                                                                                                                
9:41:42 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  understood that there was  a federal edict                                                                    
that  required funds  from older  appropriations  had to  be                                                                    
expended within  50 miles  of the  original project.  He was                                                                    
confused  whether the  original $90  million for  the bridge                                                                    
project was included in the  SouthCoast grey portions on the                                                                    
chart.                                                                                                                          
                                                                                                                                
Mr. White  explained that there  had been such an  edict. He                                                                    
said  that the  department  had worked  with the  governor's                                                                    
office to pull the funding and allocate it to Ketchikan.                                                                        
                                                                                                                                
9:42:59 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  asked  for numerics  for  the  chart.  He                                                                    
thought  it would  be  helpful  to see  the  funds for  each                                                                    
category.                                                                                                                       
                                                                                                                                
Co-Chair  Bishop  asked Mr.  White  to  provide the  updated                                                                    
numerics.                                                                                                                       
                                                                                                                                
9:43:39 AM                                                                                                                    
                                                                                                                                
Senator Wielechowski asked about the  status of the Knik Arm                                                                    
Crossing project.                                                                                                               
                                                                                                                                
Mr.   White  responded   that  the   department  was   still                                                                    
evaluating  the  project.  He said  some  earmarked  funding                                                                    
still remained  and that discussions with  the governor were                                                                    
ongoing.                                                                                                                        
                                                                                                                                
Senator  Wielechowski   asked  how  much  money   was  still                                                                    
earmarked  for  the  project  and  when  the  funding  would                                                                    
expire.                                                                                                                         
                                                                                                                                
Mr. White  stated there was  approximately $35  million tied                                                                    
to the  earmark for the  Knik Arm project. He  thought there                                                                    
was  a chance  that Congress  would bring  earmarked funding                                                                    
back  into  the  next  transportation bill.  He  noted  that                                                                    
earmarked funding  did not expire,  there was a  chance that                                                                    
congress could sweep outstanding earmarks.                                                                                      
                                                                                                                                
9:45:24 AM                                                                                                                    
                                                                                                                                
Senator Wielechowski asked for a list of earmarked funds.                                                                       
                                                                                                                                
9:45:40 AM                                                                                                                    
                                                                                                                                
Co-Chair  Bishop asked  about  status of  the Juneau  Access                                                                    
Project.                                                                                                                        
                                                                                                                                
Mr. White  stated that the  project was at a  resting point.                                                                    
He said  that the department had  signed off on a  record of                                                                    
decision with  the Federal  Highways Administration  for no-                                                                    
build. He  stated that  the project  was on  long-term pause                                                                    
due  to   the  National  Environmental  Policy   Act  (NEPA)                                                                    
process.                                                                                                                        
                                                                                                                                
9:46:42 AM                                                                                                                    
Co-Chair Stedman asked about the  status of a project to put                                                                    
sleeping quarters  on the two  new Alaska Class  Ferries. He                                                                    
wondered whether the project was, or would be, in the STIP.                                                                     
                                                                                                                                
Mr. White responded  that the department was  looking at the                                                                    
project and  it could  be included in  the STIP  under ferry                                                                    
refurbishment. He  said that  a funding  source to  move the                                                                    
project forward had not been identified.                                                                                        
                                                                                                                                
9:47:53 AM                                                                                                                    
                                                                                                                                
Co-Chair  Bishop  wanted  to  revisit  an  earlier  question                                                                    
regarding FY 15, and the  American Recovery and Reinvestment                                                                    
Act (ARRA)  funds. He  recalled that the  state was  able to                                                                    
receive an  additional $144 million because  of shovel ready                                                                    
projects.                                                                                                                       
                                                                                                                                
Mr. White recalled  the funds and said that at  the time the                                                                    
ARRA funding  had been received there  were several projects                                                                    
already  streamlined   that  could  be  expedited   to  take                                                                    
advantage of the additional funds.                                                                                              
                                                                                                                                
Co-Chair Bishop  commented that  he hoped  DOT had  the same                                                                    
expertise going  forward, as federal  infrastructure dollars                                                                    
would again be available.                                                                                                       
                                                                                                                                
9:49:13 AM                                                                                                                    
                                                                                                                                
Senator  Hoffman  discussed   the  aforementioned  projects:                                                                    
Juneau  Access, the  Knik  Arm Project,  and  the bridge  in                                                                    
Ketchikan.  He  wondered  how many  new  projects  had  been                                                                    
developed over the  last 5 years to  meet the transportation                                                                    
needs  of  the state.  He  asked  about the  Yukon-Kuskoquim                                                                    
Crossing.                                                                                                                       
                                                                                                                                
Mr. White agreed to provide the information.                                                                                    
                                                                                                                                
9:50:55 AM                                                                                                                    
                                                                                                                                
Senator  von   Imhof  queried  the   options  open   to  the                                                                    
legislature to fund specific roads.                                                                                             
                                                                                                                                
Mr. White  stated there were  several options. He  said that                                                                    
DOT could look  to expedite projects using  state funding or                                                                    
incorporating  the project  into the  STIP. He  related that                                                                    
DOT could work with local  authorities and share the expense                                                                    
between federal and state dollars.                                                                                              
9:52:39 AM                                                                                                                    
                                                                                                                                
Mr.   White  spoke   to  slide   9,   "Funds  Management   -                                                                    
Challenges":                                                                                                                    
                                                                                                                                
     • Inconsistency in federal funding availability                                                                            
                                                                                                                                
     • Multiple years of projects to manage in the STIP,                                                                        
        several phases                                                                                                          
                                                                                                                                
     • Project delivery is fraught with delays and slippage                                                                     
                                                                                                                                
     • Project  funding    follows   delivery,    but   is                                                                      
        temperamental                                                                                                           
                                                                                                                                
     • Maximizing flexibility absorbs this slippage                                                                             
                                                                                                                                
Mr.  White  discussed  funding  challenges.  He  noted  that                                                                    
funding  was given  based on  the phase  of the  project. He                                                                    
shared  that  there were  many  different  things to  manage                                                                    
outside of funding.                                                                                                             
                                                                                                                                
9:54:31 AM                                                                                                                    
                                                                                                                                
Co-Chair Bishop  asked whether Mr. White  could address what                                                                    
happened to funding after a project  came in with a low bid.                                                                    
He wondered where any residual funds would go.                                                                                  
                                                                                                                                
Mr. White  informed that if a  project came in with  a lower                                                                    
bid,  funding  could  be  taken  back  and  allocated  to  a                                                                    
different  project. He  observed  that bids  were coming  in                                                                    
both lower  and higher  than anticipated in  different parts                                                                    
of the state.                                                                                                                   
                                                                                                                                
9:56:15 AM                                                                                                                    
                                                                                                                                
Senator  Wielechowski  asked  whether  maintenance  such  as                                                                    
snowplowing  was strictly  state funded.  He had  heard from                                                                    
his constituents  that that  there was  a problem  with snow                                                                    
plowing  resulting   in  large   snow  berms   that  blocked                                                                    
driveways.                                                                                                                      
                                                                                                                                
Mr.  White  noted  that  maintenance  operation  was  not  a                                                                    
federally funded  activity. He  cited that depending  on the                                                                    
street  the maintenance  and snow  removal could  be locally                                                                    
managed and likely state funded.                                                                                                
Senator Wielechowski asked how to  address the berms left by                                                                    
plowing in his district.                                                                                                        
                                                                                                                                
Mr.  White offered  to  reach out  to  the maintenance  team                                                                    
within Senator  Wielechowski's region. He noted  that he did                                                                    
not manage the maintenance team.                                                                                                
                                                                                                                                
Mr.  Carpenter stated  that the  issue was  a challenge.  He                                                                    
explained that  vehicles were often  plowing at  high speeds                                                                    
and working  in an expeditious  manner. He was  not familiar                                                                    
with the  road mentioned  by Senator Wielechowski  but would                                                                    
discuss  the issue  with regional  directors. He  reiterated                                                                    
that   providing  services   could   sometimes  mean   small                                                                    
inconveniences to residents.                                                                                                    
                                                                                                                                
9:59:40 AM                                                                                                                    
                                                                                                                                
Co-Chair  Bishop  noted  that  in years  past,  before  many                                                                    
positions  were  cut, a  wheel  loader  would follow  behind                                                                    
plows to clear driveways.                                                                                                       
                                                                                                                                
10:00:02 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman  thought  there  might  be  a  substantial                                                                    
infrastructure  package  coming later  in  the  year due  to                                                                    
Covid-19  federal  funding.  He  wanted a  briefing  on  the                                                                    
ability of  DOT to  respond and absorb  the funds.  He asked                                                                    
how to respond to a large  sum of funds when programming was                                                                    
so tightly programmed into the next 4 years.                                                                                    
                                                                                                                                
10:01:47 AM                                                                                                                   
                                                                                                                                
Mr.  White  addressed   Co-Chair  Stedman's  question  about                                                                    
potential  significant federal  funding.  He  said that  his                                                                    
team  was tracking  the infrastructure  bills as  they moved                                                                    
through  congress.  He  related   that  the  department  was                                                                    
working  to identify  projects  that  could advance  quickly                                                                    
once the  federal funding was  allocated. He said  that most                                                                    
of  the  projects  in  the 10-year  plan  were  waiting  for                                                                    
federal funding.  He shared that the  department was working                                                                    
with  regional  teams to  be  sure  projects were  ready  to                                                                    
maximize funds once they were released.                                                                                         
                                                                                                                                
10:03:05 AM                                                                                                                   
                                                                                                                                
Senator  von Imhof  thought the  ports in  the state  were a                                                                    
huge asset and  commented on the size  of Alaska's seacoast.                                                                    
She wondered who was responsible  for the Port of Anchorage.                                                                    
She understood  that the Port  of Anchorage was  a strategic                                                                    
seaport. She  pondered whether the  funding would  come from                                                                    
the United States  Department of Defense as  the seaport was                                                                    
strategic.  She  thought  the  issue  had  been  clouded  as                                                                    
previous  federal funds  were involved  in a  failed upgrade                                                                    
that was  currently the  subject of  a lawsuit.  She pointed                                                                    
out that  the port fell under  transportation, commerce, and                                                                    
defense;  federal,  state,  and   municipal.    She  queried                                                                    
whether the Port of Alaska was on DOT's radar in any way.                                                                       
                                                                                                                                
Mr.  White stated  that the  long-range transportation  plan                                                                    
included consideration of the  marine highways and ports. He                                                                    
said that  there had  not been  anything allocated  to state                                                                    
transportation departments for  port construction. He shared                                                                    
that the port would be  considered in the department's long-                                                                    
range planning.                                                                                                                 
                                                                                                                                
10:06:19 AM                                                                                                                   
                                                                                                                                
Senator von Imhof hoped that  DOT communicated with the Port                                                                    
of  Anchorage and  other state  departments and  the federal                                                                    
government. She  emphasized that the  port was vital  to the                                                                    
state. She  hoped the port  could be elevated  in importance                                                                    
and become a higher priority.                                                                                                   
                                                                                                                                
10:07:11 AM                                                                                                                   
                                                                                                                                
Mr. White  addressed slide  10, "Advance  Construction (AC):                                                                    
Purpose and Need":                                                                                                              
                                                                                                                                
     ?AC is a critical financing and funds management tool                                                                      
     for DOT&PF                                                                                                                 
     ?US DOT gives States the authority to use AC                                                                               
         ?No obligation of funds & authorizes work                                                                            
     ?Supports Effective, Efficient, & Continuous Project                                                                       
     Delivery                                                                                                                   
     ?Bridges gaps in delay in federal budget or State &                                                                        
     Federal fiscal year overlap                                                                                                
     ?Assists with STIP fiscal constraint by spreading                                                                          
     large projects over several years, similar to                                                                              
     amortization                                                                                                               
     ?Maximizes available funding                                                                                               
     ?Alaska DOT&PF uses "Planned AC" and "Managed AC"                                                                          
                                                                                                                                
Mr.  White  noted  that AC  (advanced  construction)  was  a                                                                    
method used by DOT to  advance projects through the STIP and                                                                    
Managed AC  was more short  term to get through  the federal                                                                    
fiscal year.                                                                                                                    
                                                                                                                                
10:10:08 AM                                                                                                                   
                                                                                                                                
Mr.   White  advanced   to   slide   11,  "Planned   Advance                                                                    
Construction (AC)":                                                                                                             
                                                                                                                                
      Programmed in the STIP with "payback" or conversions                                                                    
                                                                                                                              
     ?Project phases must be fully obligated all at one                                                                       
     time                                                                                                                     
          ?Causes   issues   with   very   large   projects,                                                                  
          Examples:                                                                                                             
               ?Tustumena @ $200M+ (33% of 1 year program)                                                                      
               ?Cooper Landing @ $500M+ (92% of 1 year                                                                          
               program)                                                                                                         
          ?Using AC allows the State to smooth out the                                                                        
          effect to obligation authority                                                                                        
                                                                                                                                
      Project can proceed without committing federal or                                                                       
     State funds                                                                                                              
          ?As expenditures begin to accrue, those are                                                                         
          converted to Federal funds                                                                                            
                                                                                                                                
      Supports Effective, Efficient, & Continuous Project                                                                     
     Delivery                                                                                                                 
                                                                                                                              
     ?Maximizes funds available                                                                                               
                                                                                                                                
Mr.  White  sited  the  conversions   on  the  slide,  which                                                                    
indicated when  the federal  payback occurred.  He mentioned                                                                    
that  AC allowed  for spreading  out  payments over  several                                                                    
years for larger  projects. He said that  the process helped                                                                    
to  expedite  the  various aspects  of  a  project;  project                                                                    
development moved faster and more efficiently.                                                                                  
                                                                                                                                
10:12:26 AM                                                                                                                   
                                                                                                                                
Co-Chair Bishop discussed AC funds.  He said that there were                                                                    
50  federal agencies  the  department had  to  work with  in                                                                    
order to build  a project. He thought the rule  of thumb was                                                                    
from inception to  going out to bid, the time  frame was six                                                                    
years  provided there  were no  delays. He  wondered whether                                                                    
this timeframe was still relevant.                                                                                              
                                                                                                                                
Mr.  White  estimated,  depending  upon  the  scope  of  the                                                                    
project,  it took  five to  ten years  to develop.  He noted                                                                    
that  remote  locations  could see  faster  development.  He                                                                    
thought  six years  was a  fairly good  estimate. He  shared                                                                    
that  the  commissioner  had   tasked  the  department  with                                                                    
finding ways to provide faster project delivery.                                                                                
                                                                                                                                
10:14:51 AM                                                                                                                   
                                                                                                                                
Co-Chair  Bishop  asked  whether  DOT used  AC  dollars  for                                                                    
front-end permitting and engineering for projects.                                                                              
                                                                                                                                
Mr. White explained that DOT  used AC to streamline projects                                                                    
to deliver the final product faster.                                                                                            
                                                                                                                                
Co-Chair Bishop asked about the  timeline to build a road if                                                                    
DOT was using pure state General Fund (GF) dollars.                                                                             
                                                                                                                                
Mr. White estimated  that such a project  could be completed                                                                    
in  three to  five years.  He added  that most  of the  time                                                                    
there  was a  federal permit  process that  would come  into                                                                    
play, which could cause delays.                                                                                                 
                                                                                                                                
10:16:35 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman  commented that  he did not  see much  of a                                                                    
time difference  between the  two types  of projects  in his                                                                    
district.  He  appreciated  DOT  trying  to  accelerate  the                                                                    
process. He  mentioned the M/V Tustemena  and Cooper Landing                                                                    
examples from  slide 11. He asked  for an update on  the two                                                                    
projects, including how  long each had been  in the planning                                                                    
process.                                                                                                                        
                                                                                                                                
Mr.  White  shared that  the  department  currently had  the                                                                    
construction  phase  in  the  STIP  for  the  M/V  Tustemena                                                                    
project. He said  that the project could be  advanced at any                                                                    
point to a year when  there was funding for construction. He                                                                    
relayed that  the design  was at  60 percent  and additional                                                                    
work was boing don't to identify fund sources.                                                                                  
                                                                                                                                
10:18:59 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman asked about Cooper Landing.                                                                                    
                                                                                                                                
Mr. White shared that DOT  was currently clearing the right-                                                                    
of-way and  involved in  the final  design process.  He said                                                                    
that  the project  had been  split into  four phases  in the                                                                    
STIP and  DOT was staring on  either end of the  landing. He                                                                    
stated that the  first phase of construction  would begin in                                                                    
2021.                                                                                                                           
                                                                                                                                
Co-Chair Bishop asked  how many miles of  road were involved                                                                    
in the Cooper Landing project.                                                                                                  
                                                                                                                                
Mr.  White estimated  that the  STIP  listed 45  to 60  mile                                                                    
points, but the figure did not equate to road miles.                                                                            
                                                                                                                                
10:20:28 AM                                                                                                                   
                                                                                                                                
Mr.   White   referenced    slide   12,   "Managed   Advance                                                                    
Construction (AC)":                                                                                                             
                                                                                                                                
     Managed AC is typically not included in the STIP and                                                                       
     does not have planned AC paybacks. This is AC that is                                                                      
     programmed and converted typically in a fiscal year.                                                                       
           Supports Effective, Efficient, & Continuous                                                                        
          Project Delivery                                                                                                    
          ?Bridges gaps due to delay in federal budget                                                                        
          ?Maximizes funds available                                                                                          
                                                                                                                              
Mr. White  noted that  an upcoming  slide would  address the                                                                    
use of  more advanced construction  at the beginning  of the                                                                    
federal fiscal year.  He shared that managed AC  was a funds                                                                    
management tool  within fiscal years  and did not  appear in                                                                    
the STIP as planned AC.                                                                                                         
                                                                                                                                
10:21:49 AM                                                                                                                   
                                                                                                                                
Mr.  White discussed  slide 13,  "FFY20 Net  Use of  Advance                                                                    
Construction  (AC),"  which  showed a  bar  graph  depicting                                                                    
federal obligations and advance  construction for the period                                                                    
of time from October 2019,  to September 2020. He noted that                                                                    
AC  was being  used more  for  to expedite  the process.  He                                                                    
pointed out that federal obligation  dropped off in December                                                                    
2020,  but January  and February  2021 offered  more federal                                                                    
funding. He pointed  to the pink bars below the  axis on the                                                                    
graph, which  indicated where  conversions had  been applied                                                                    
and funds had been paid back.                                                                                                   
                                                                                                                                
10:23:15 AM                                                                                                                   
                                                                                                                                
Mr. White spoke to slide  14, "AC Year-End Balances, by type                                                                    
(in millions),"  which showed a  table listing the  types of                                                                    
fund balances  from FY16  through FY20.  He shared  that DOT                                                                    
had  set internal  thresholds of  $250 million.  He stressed                                                                    
that maintaining the programmed AC was a priority for DOT.                                                                      
                                                                                                                                
Co-Chair Bishop queried the "Other AC" column.                                                                                  
                                                                                                                                
Mr.  White  explained  that  the   "Other  AC"  referred  to                                                                    
programs   that   the    department   had   beyond   surface                                                                    
transportation  and  the  railroad.   He  related  that  the                                                                    
category was a "catch all."                                                                                                     
                                                                                                                                
Co-Chair Bishop  asked whether  the AC  funds were  used for                                                                    
the  Fairbanks Area  Surface  Transportation  (FAST) or  the                                                                    
Anchorage   Metropolitan   Area   Transportation   Solutions                                                                    
(AMATS).                                                                                                                        
                                                                                                                                
Mr.  White  replied  that  DOT  was  crafting  a  policy  to                                                                    
establish thresholds  and limits to apply  when working with                                                                    
both entities.                                                                                                                  
                                                                                                                                
10:26:16 AM                                                                                                                   
                                                                                                                                
Mr.  White advanced  so slide  15, "Improvements  to Program                                                                    
Development":                                                                                                                   
                                                                                                                                
     Performance Based Planning & Programming (PBPP)                                                                          
          ?Data-driven decision making                                                                                          
          ?Establish performance targets and priorities                                                                         
          ?Uses      asset      condition,      performance,                                                                    
          socioeconomic, and other metrics to drive                                                                             
          investment decisions                                                                                                  
          ?Creates a hierarchy of authority, starting with                                                                      
          the Long Range Transportation Plan (LRTP), Policy                                                                     
          & Procedure, the STIP, etc.                                                                                           
                                                                                                                                
          Capacity Enhancement  Make New"                                                                                     
          Modernization  "Improve What we Have"                                                                               
          State of Good Repair  "Maintain What we Have"                                                                       
          Recurring and Required Programs                                                                                       
                                                                                                                                
Mr. White  emphasized that DOT  was trying to make  the best                                                                    
investment decisions with federal funding.                                                                                      
                                                                                                                                
10:30:32 AM                                                                                                                   
                                                                                                                                
Senator Hoffman acknowledged there  was always more projects                                                                    
than  funds  available.  He  asked  whether  the  department                                                                    
considered all  areas of the  state and equal access  to all                                                                    
areas as part of performance-based programming.                                                                                 
                                                                                                                                
Mr.  White  acknowledged  that  there  was  a  challenge  to                                                                    
balance  projects in  Alaska.  He  discussed urban  capacity                                                                    
needs compared to  simple access issues in  rural Alaska. He                                                                    
said that  establishing statewide  priorities and  looking a                                                                    
fund allocation  to ensure equitability were  key drivers to                                                                    
project conversations.                                                                                                          
                                                                                                                                
10:32:24 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman spoke of pavement  life concerns.  He asked                                                                    
how the pavement metrics fit into DOT's planning.                                                                               
                                                                                                                                
Mr. White affirmed that the  asset management plan was meant                                                                    
to  address the  pavement  issue.   He  elaborated that  DOT                                                                    
considered  pavement  condition  as well  as  exploring  new                                                                    
types  of  pavement. He  said  that  the projects  would  be                                                                    
preventative to solve maintenance  issues before they became                                                                    
major problems.                                                                                                                 
                                                                                                                                
10:34:17 AM                                                                                                                   
                                                                                                                                
Co-Chair Bishop  thought Co-Chair Stedman brought  up a good                                                                    
point. He  thought there was a  way to get more  life out of                                                                    
the state's  asphalt through public education.  He discussed                                                                    
his past  commuting from Anchorage  to Palmer.  He suggested                                                                    
having drivers splitting their tracks  on the asphalt to get                                                                    
more life out of the asphalt.                                                                                                   
                                                                                                                                
10:35:23 AM                                                                                                                   
                                                                                                                                
Senator Hoffman  recalled several  years previously  DOT had                                                                    
done  an  educational  outreach  regarding  use  of  studded                                                                    
tires.  He  discussed  improved tire  technology  and  asked                                                                    
whether DOT was looking into the issue.                                                                                         
                                                                                                                                
Mr. White stated  that studded snow tires were  a concern of                                                                    
DOT. He pointed  out that there was a  social media campaign                                                                    
to  educate  drivers on  the  impact  of studded  tires.  He                                                                    
discussed  the   concern  of  asphalt  rutting,   which  was                                                                    
prevalent in  areas and stemmed  from studded snow  tire use                                                                    
on pavement. He noted that  DOT's research group was looking                                                                    
into the  issue. He  cited that educating  the public  was a                                                                    
priority.                                                                                                                       
                                                                                                                                
10:37:27 AM                                                                                                                   
                                                                                                                                
Mr.  White  turned to  slide  16,  "Improvements to  Program                                                                    
Development":                                                                                                                   
                                                                                                                                
     eSTIP: Technological solution to expedite STIP                                                                           
     development and update data.                                                                                               
          ?Leveraging innovative solutions                                                                                      
          ?Public Involvement Portal with all projects                                                                          
          mapped                                                                                                                
          ?Information   Systems   within   the   Department                                                                    
          linked:                                                                                                               
               ?This allows us to automate tasks -                                                                            
               increasing efficiency                                                                                            
               ?Connects STIP to Federal funding system for                                                                   
               more real-time data/status                                                                                       
               ?Enhanced reporting                                                                                            
                                                                                                                                
Mr. White relayed  that the department was  still working on                                                                    
getting a contractor to facilitate  the project of eSTIP. He                                                                    
shared  that the  new  system would  provide  access to  the                                                                    
public for  seeing details on  STIP projects. He  noted that                                                                    
eventually the system  would tie into a  system for tracking                                                                    
federal funds. He  said that the program  would provide more                                                                    
real-time data  to the public.  He relayed that  the project                                                                    
had been under discussion for over 10 years.                                                                                    
                                                                                                                                
10:39:54 AM                                                                                                                   
                                                                                                                                
Senator Olson asked  about the movement of  personnel in the                                                                    
Northern region  of the  state. He thought  it seemed  as if                                                                    
professionals were being moved from Nome to Fairbanks.                                                                          
                                                                                                                                
Mr. White deferred the question to Mr. Carpenter.                                                                               
                                                                                                                                
Mr. Carpenter  was not sure  he could fully  address Senator                                                                    
Olson's  question. He  referenced agency-wide  and statewide                                                                    
recruitment problems,  which could be a  function of finding                                                                    
the right  people for the  jobs and employing them  in areas                                                                    
where  they  wanted  to  live.  He  agreed  to  provide  the                                                                    
information at a later date.                                                                                                    
                                                                                                                                
Senator  Olson asked  whether a  response would  come before                                                                    
the end of the current legislative session.                                                                                     
                                                                                                                                
Mr. Carpenter answered in the affirmative.                                                                                      
                                                                                                                                
Senator  Olson asked  about a  snow blower  for Golovin.  He                                                                    
discussed the runway at the  airport in Golovin and stressed                                                                    
that the  taxiway filled with  snow necessitating  help from                                                                    
DOT. He was troubled that  there were no DOT representatives                                                                    
available in the area to address the issues.                                                                                    
                                                                                                                                
Co-Chair Bishop hoped the snow  blower could be a reality in                                                                    
Golovin.                                                                                                                        
                                                                                                                                
10:43:23 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman wanted  to help  with some  reconciliation                                                                    
between slide  6, and slide  14, concerning the  AC year-end                                                                    
balances. He pointed out that  the year-end balance on slide                                                                    
14  was $286.9.  He asked  how the  offset was  reflected on                                                                    
slide  6  for FY  20.  He  wondered  whether the  286.9  was                                                                    
reflected in the bar for FY 20 on slide 6.                                                                                      
                                                                                                                                
Mr. White  stated that  for AC,  the department  only tapped                                                                    
into  federal   funding  at  the  time   on  conversion.  He                                                                    
explained  that a  portion of  what  was showing  in the  AC                                                                    
balance was  tied into the  total obligations for  the year,                                                                    
however; AC was more of  a placeholder until the project was                                                                    
obligated with federal funds.                                                                                                   
                                                                                                                                
Co-Chair  Stedman asked  about the  totals on  slide 14.  He                                                                    
understood that  a percentage  of the  funds were  paid back                                                                    
each year. He  asked Mr. White to provide figures  as to how                                                                    
much was paid back per year  and how much was added, as well                                                                    
as the ending balance.                                                                                                          
                                                                                                                                
Mr. White  agreed to provide  more detail on  the allocation                                                                    
and the AC conversions.                                                                                                         
                                                                                                                                
10:45:51 AM                                                                                                                   
                                                                                                                                
Co-Chair   Stedman   thanked    the   department   for   the                                                                    
presentation.  He thought  Mr.  White had  done  a good  job                                                                    
presenting complex information.                                                                                                 
                                                                                                                                
Co-Chair Bishop echoed Co-Chair Stedman's comments.                                                                             
                                                                                                                                
Co-Chair Bishop discussed  housekeeping including the agenda                                                                    
for the following day.                                                                                                          
                                                                                                                                
ADJOURNMENT                                                                                                                   
10:47:58 AM                                                                                                                   
The meeting was adjourned at 10:47 a.m.                                                                                         

Document Name Date/Time Subjects
032521 Senate Finance DOT STIP presentation for Thursday 25 March 2021.pdf SFIN 3/25/2021 9:00:00 AM
DOT STIP