Legislature(1999 - 2000)
03/16/1999 01:35 PM Senate TRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
JOINT MEETING
HOUSE TRANSPORTATION STANDING COMMITTEE
SENATE TRANSPORTATION STANDING COMMITTEE
March 16, 1999
1:35 p.m.
MEMBERS PRESENT
Senator Jerry Ward, Chairman
Senator Drue Pearce
Representative Beverly Masek, Co-Chair
Representative Andrew Halcro
Representative John Cowdery
Representative Jerry Sanders
MEMBERS ABSENT
Senator Rick Halford
Senator Mike Miller
Senator Georgiana Lincoln
Representative Bill Hudson
Representative Allen Kemplen
Representative Albert Kookesh
COMMITTEE CALENDAR
Oversight Hearing: Anchorage International Airport Expansion
Project
TAPE 99-11, SIDE(S) A & B
CALL TO ORDER
CHAIRMAN WARD called the House Transportation Standing Committee
meeting to order at 1:35 p.m. Members present at the call to order
were Senator Ward, and Representatives Masek, Halcro, Cowdery and
Sanders. Senator Pearce arrived at 1:40 p.m.
SUMMARY OF INFORMATION
Number 041
KURT PARKAN, Deputy Commissioner, Department of Transportation &
Public Facilities (DOT/PF), provided the introduction to the
presentation on the Anchorage International Airport Expansion
Project. He noted that this is the biggest project DOT/PF has ever
undertaken. Many different individuals are involved in the ongoing
review of this project, he explained, including the airlines'
technical committee, the airport staff, and staff from the
legislature assigned to follow-up on the project. He introduced
David Eberle to start the presentation.
Number 080
DAVID R. EBERLE, Program Director for Gateway Alaska, and Director
of Construction and Operations, Central Region, Department of
Transportation and Public Facilities (DOT/PF), came forward to give
the presentation. He distributed a handout entitled Anchorage
International Airport Terminal Redevelopment Project, Project
Update, March 1999. He reported that the project is about three to
four percent complete, and they are just getting geared up for the
upcoming major contracts. Their effort to date, he explained, has
been focused on completing the schematic design, which was
completed in January. Since that time, however, the team has been
going through detailed value engineering and cost reduction
exercises to bring the project back within the confines of the
budget. He gave the example of building a house, and advised that
the airport users and tenants have all asked for additional things
that may or may not be accommodated according to the budget.
Number 126
SENATOR PEARCE asked what had changed in one year that required
altering the budget.
MR. EBERLE indicated that the requested floor space has increased,
and the airlines have requested additional ticket lobby area and
gate area. He answered Senator Pearce's question as to why they
were requesting more space now by stating the original concept
design was based on the best available information at that time,
and he explained that the detailed schematic design laid out floor
space needs for each individual airline and tenant. He indicated
that this represents an approximate increase of 68,000 square feet
over the baseline in the concept design.
SENATOR PEARCE asked, "So does that mean that these experts you
had, which you paid a lot of money to, to come up with the concept,
didn't know what they what talking about?"
MR. EBERLE stated that he would view it as just the opposite. He
said, "The initial guess is just that. We are trying to best guess
what all the tenants are going to want. ... We are not in a
detailed design phase at that point. We had to start somewhere.
We have now advanced by having one-on-one meetings with the
airlines and all of the tenants. Through that process is where we
detail exactly what each tenant wishes in the way of space. In
addition to that, about a third of the additional ... area is
attributed to a basement level access, which is non-public
circulation, but will preclude future problems on the airside
operation. Basically, that basement level is a corridor as a
service entrance to allow all the incoming material, supplies, the
food service, the retail vendors. All that stuff is brought in
through the corridor at the basement level rather than having to
access on the airside, which interrupts airline operations, or
access in on the public entrance side, which interrupts the
passengers."
Number 166
SENATOR PEARCE observed that she was told all of the users and
operators were part of the original discussions with the designer
on an ongoing basis.
MR. EBERLE acknowledged that they had been; however, the detailed
level of discussions had not taken place yet.
SENATOR PEARCE noted that discussing corridors underneath to get
supplies in and out seemed pretty basic.
MR. EBERLE explained that the original concept was for airside
entrance; however, after it was looked at in detail, and long-term
goals were discussed, it was agreed the basement corridor access
was a better idea.
Number 181
MR. EBERLE advised that they are currently in the process of
launching the detailed design, turning it into a contract package,
and having it "bid out in a hard money contract." In addition,
Concourse "C" is in the process of being vacated, with the
remaining tenants to be relocated by May, and the bulk of the
construction to date has involved the relocation of those tenants
to the North Terminal. The contract for demolition of Concourse
"C" will be advertised this month, and the first part of that
process will be asbestos abatement in the months of May and June.
The actual demolition of the building will begin in July.
MR. EBERLE reported that the overall design is about 40 percent
complete on the land side, and it will be constructed in two
phases. The first phase is incoming access and the extension of
curbside ramps, and that construction start is scheduled for July.
He told the committee the new access road will be opened in May of
2000; after that, the second phase will begin.
Number 208
MR. EBERLE explained that the airside work is only about 10 percent
done on the design side, and it has been pushed off until the year
2000, awaiting the additional $25 million in bonding. He reported
that the only work done on the airside so far was apron repaving
done last fall to support the relocation of ERA/PenAir. He
referred the committee to the first page in the "Budget" section of
the handout. Last year, the budget was set for $230 million, which
is broken down as follows: $178.7 million in airport revenue,
$26.3 million in federal highway funds, and $25 million in FAA
[Federal Aviation Administration] funding. The FAA funding has
been secured in a Letter of Intent (LOI), which, he explained, is
a discretionary grant from received over a 10-year period. The LOI
is actually for the amount of $48 million, and it includes some
additional projects beyond those related to the original project,
specifically: Runway 6L/24R Reconstruction and Apron
Reconstruction (Asphalt). In addition to that, Mr. Eberle pointed
out that the actual portion of the LOI available for the Terminal
Redevelopment Airside Projects exceeds the original $25 million
requested; however, the problem is that the cash flow is received
over 10 years, and the work is scheduled over four years. In order
to accomplish this construction, DOT/PF is requesting an additional
$25 million in bonding authority.
Number 239
CHAIRMAN WARD inquired if DOT/PF has submitted a request to the
congressional delegation asking for the time frame to be changed
from 10 years to one year.
MR. EBERLE said no.
Number 244
REPRESENTATIVE COWDERY asked if the bonds were going to be sold
according to the interest rate.
MR. EBERLE indicated that the plan is to sell the bonds in August
of 1999. He went on to explain to Representative Cowdery how the
LOI funds were distributed, according to the second page of the
"Budget" section of the handout.
REPRESENTATIVE COWDERY wondered how the bond costs were going to be
paid from August until the initial LIO money arrives.
MR. EBERLE responded, "The initial debt service on the bonds is all
being capitalized as part of the overall finance plan. The actual
debt service on the bonds ... isn't due to start repaying until the
year 2002. So, the first several years of the bond interest is
being capitalized, and that is at the request of the airlines. So
the payment actually is going to start taking place at the point
where you start getting revenue generated from the new terminal
project; in other words, the additional space is starting to
become available."
REPRESENTATIVE COWDERY asked what the approximate interest costs
would be from the time the bonds are sold in August until the time
the funds are received.
MR. EBERLE explained that if there was two years of capitalized
interest at roughly five percent, the figure would be approximately
$2.5 million. He pointed out that the airlines approved this
project on the basis that a full $204 million would be bonded, and
there was no plan for LOI of FAA money to be added to the project.
He added, "The benefit here is that now we have LOI monies to pay
back part of that $204 million."
REPRESENTATIVE COWDERY noted that there may be PFC [Passenger
Facility Charge] money as well.
Number 299
MR. EBERLE next referred the committee to the third page of the
"Budget" section of the handout. He stated that the balance of the
project is the same, including the overall budget; however, "Phase
II bonds" are being requested in the amount of $25 million. He
called attention to the "Summary Project Schedule" in the handout,
and noted that the goal is to have the Terminal "C" replacement
open to the public in the spring of 2002. After that terminal is
opened, in the off-season, the existing ticket lobby area and
Concourse "B" will be remodeled. He mentioned that the roads will
be built in two phases.
Number 327
MR. EBERLE clarified that parallel to, but not part of, this
project is the Alaska Railroad Corporation's plan for a rail
station at the terminal. This is currently at the design phase,
and the earliest any construction would actually begin is the end
of 1999. He explained that the railroad's goal is to come on line
about the same time Concourse "C" opens. He next addressed road
construction, explaining that construction of the new incoming lane
will be constructed in the summer of 1999, and that it can be
constructed without interrupting the existing traffic, other than
at the cross points. The main circulation loop into the airport
will stay the same, he noted, for the bulk of this summer; however,
late in the season, after the "summer rush," the upper ramp will
have to be shut off for approximately four to five months to allow
for extension of a 600-foot bridge. The goal is to have this phase
opened to the public by May of 2000. Once that is in place, he
added, the exit loop will be started, and this is a new
configuration that will not disrupt traffic much until it is ready
to be switched over. Finally, the parking lots will be
reconfigurated after traffic is under new alignment.
Number 345
CHAIRMAN WARD asked Mr. Eberle to point out the location of the
railroad route and depot on the chart, and if the railroad had
acquisition costs in that plan.
MR. EBERLE confirmed that the railroad has $28 million to design
and build the facility, and they are currently engaged in an
ongoing discussion with the airport regarding putting together a
lease option.
Number 359
REPRESENTATIVE HALCRO indicated that the railroad was conducting a
feasibility study with regards to this project, and that they had
committed to at least doing a tunnel that would be ready when the
project became economically viable. He wondered if there was any
update on when the feasibility study would be completed.
MR. EBERLE believed the feasibility study would be completed by the
end of March or early April.
REPRESENTATIVE HALCRO sought clarification as to whether it be
determined at that point to build a rail station or if they have
already committed to do so.
MR. EBERLE stipulated that they have only committed to the tunnel
portion and design of a rail station. He believed that discussion
was going to occur at the April 8, 1999, board meeting of the
railroad.
Number 373
REPRESENTATIVE HALCRO asked, "Will you take into consideration the
feasibility study that comes back or, if they just come to you and
say, 'We want to build it; we have the $28 million and we're going
to do it, regardless of the feasibility,' is that something the
airport is just going to accept?"
MR. EBERLE reiterated that Alaska Railroad Corporation is currently
engaged in lease negotiations; however, part of the price of that
lease option is their commitment to building a tunnel, which they
have done because it works directly with the first phase of
construction. The time to build a tunnel, he explained, is the
beginning of fall 1999 as road construction begins; that way,
traffic will not be disrupted more than once.
CHAIRMAN WARD inquired as to the cost of the tunnel.
MR. EBERLE indicated that the railroad has committed to
approximately $1.5 million, and that another $1 to 1.5 million will
be needed to finish the tunnel and make it usable to passengers.
CHAIRMAN WARD wondered if the railroad is planning to borrow the
needed $28 million or already has it in possession. If they
already have it, he questioned how they were able to obtain this
amount of public funds.
MR. EBERLE understood it to be a direct federal appropriation to
the railroad.
Number 392
REPRESENTATIVE COWDERY inquired if the railroad would pay the same
rental rates as the airlines and other vendors at the airport.
MR. EBERLE reported that was currently under discussion. He
continued his presentation by next referring to the page in the
handout entitled "Contracts Awarded," and pointed out that
approximately $5 million in contracts have been awarded to date.
Number 408
REPRESENTATIVE COWDERY returned to discussion of the railroad. He
noted that there has been some concern that the walkway from the
rail station to the airport terminal would be too long, and he
wondered approximately how long it would be, and if it would have
a moving sidewalk.
MR. EBERLE confirmed that the railroad has requested the walkway be
designed to allow for a moving sidewalk.
REPRESENTATIVE COWDERY asked if the railroad would then own that
moving sidewalk or if it would be part of the airport.
MR. EBERLE said, "It's a detail to be worked out in the lease
agreement. ...The tunnel itself would become the property of the
Anchorage International Airport, and then they would operate and
maintain the tunnel with the rest of the facility. The balance of
the rail station would be the responsibility of the railroad." He
then referred the committee to the page in the handout entitled
"Contracts Scheduled for Bid," and he pointed out that there will
be over 30 contracts used for this project.
Number 424
SENATOR PEARCE had a series of questions. She noted that the
project cost in 1997 dollars was $190.8 million, not counting the
interest and insurance costs for the bonds, and that the escalator
was placed at $14.5 million, which is more than 7.5 percent, to
reach the total capital request of $230 million. She pointed out
that it has now been decided to add over 60,000 square feet. She
referred to the baggage conveyer equipment cost estimation of $13
million, and that the notation stated it would have separate
funding. She asked, "What is the funding source for that?"
MR. EBERLE explained that the airlines have approved pulling that
out as a separate project, and that they are proposing to do that
as a separate CIP [Capital Improvement Project] or a possible
candidate project for PFCs [Passenger Facility Charge].
SENATOR PEARCE wondered how the airlines were able to delegate
state funding.
MR. EBERLE said that the baggage system that was originally
envisioned in the Terminal Redevelopment Project was very limited
in nature and was less than $2 million in the original project
budget. Having done an in-depth study of the baggage system, and
considering the age of that system, and the additional features
that could be more convenient for travelers, such as curbside
baggage check-in systems, interline belts, and new bag claim
systems, it was agreed by the airlines and airport that a complete
replacement of the baggage system is in order. He added, "It's
either now or later. Now would be the time to do it as part of the
new project; however, we don't have that in our budget. We've
identified that as, if a new baggage system is desired, then
something else has to give."
Number 449
SENATOR PEARCE noted that she fought to get this project approved
last year, and it was presented as a $230 million project at that
time. She wondered how a project of such scope could be planned
with only $2 million allotted for baggage facilities.
MR. EBERLE explained that the scope of the original concept did not
include total replacement of the baggage system.
SENATOR PEARCE referred the committee to the page in the handout
entitled "Contracts Scheduled for Bid," and she observed that $13
million for airport baggage handling systems was scheduled to be
advertised for bid on March 03, 1999. She asked if that was
funded.
MR. EBERLE said no, and said, "That was the original concept. We
are paring that back to the $2 million that is, roughly, needed to
do the ERA/PenAir bag relocation, and, also, that won't be
advertised until the end of the year or early next year."
SENATOR PEARCE clarified that the chart was incorrect.
MR. EBERLE said yes.
SENATOR PEARCE inquired as to the other portions of the $20
million, not in the original budget, that is suddenly on the "wish
list." She wondered if the airlines were going to provide their
own flight information displays.
MR. EBERLE indicated that was correct.
SENATOR PEARCE pointed out that interior construction for third
floor was being deferred. She said she assumed that future use of
any space on the third floor would be an additional cost to the
state.
MR. EBERLE said, "That could be a tenant cost, depending upon who
utilizes the space."
SENATOR PEARCE asked why the tour baggage check-in roof was being
lowered.
MR. EBERLE indicated that the original concept for the tour baggage
check-in area was for a very high roof of the same level as the
rest of the terminal. By lowering that and building a floor
between the check-in counters and the baggage claim, he explained,
it would allow for future expansion.
Number 470
CHAIRMAN WARD asked how it was decided to make this change.
DON KETNER, Project Manager, Anchorage International Airport
Terminal Redevelopment Project, explained that the change came
about after a value engineering exercise as one of the ways to
reduce the cost estimate for the overall project.
CHAIRMAN WARD wondered if reduction in efficiency was weighed
against the cost reduction.
MR. KETNER said, "The value engineering exercise occurred in two
directions. First, we had our design team go through the project
and look at various components of the project and evaluate them in
terms of functional value cost and various other factors, and come
up with recommendations to look at. We had various workshop
meetings with the airlines to make decisions on where we would best
... I guess what it came down to was, at the end of schematic
design or toward the end of schematic design, we recognized that
... we had a scope that, more than likely, required a budget that
exceeded what we had in hand."
CHAIRMAN WARD asked why that was.
MR. KETNER said, "Because of the schematic design process. When
you move from a concept into a more detailed design, just like you
do with a house, what winds up happening is...."
Number 485
SENATOR PEARCE declared that she had personal experience building
a house, and, upon finding out that the scheme is bigger than the
budget, she cut back to fit her budget. She emphasized that if the
state cannot afford this project at $230 million, she did not think
they should be going forward. She pointed out that she sat through
many meetings last year and heard testimony from the airlines that
baggage handling equipment was very much needed, and she did not
know how the Terminal Redevelopment Project put together an entire
scheme for a new airport terminal without that equipment properly
budgeted. She observed that the project is already $34.5 million
over budget, and they are only three percent into the project. She
summarized by saying, "I don't support it anymore."
Number 501
REPRESENTATIVE COWDERY referred back to the change in the roof
design of the tour baggage area. He asked if the amount of floor
space was still the same as originally designed, and if it still
handled the same amount of tour buses.
MR. KETNER said yes.
REPRESENTATIVE COWDERY observed that construction costs have been
cut back because of a less valuable roof structure, but sought
assurance that, conceptionally, the area is still the same size.
MR. KETNER referred the committee to a draft explaining the new
roof for the tour baggage area, and he explained, "What this roof
eventually becomes is the future floor structure for ticket lobby
expansion."
Number 513
REPRESENTATIVE HALCRO reopened the question of baggage handling
equipment. He noted that the funding source of the $13 million
requested for the baggage system is not known; however, $2 million
will be used for ERA/PenAir baggage relocation. He wondered where
the additional $11 million will be coming from.
MR. EBERLE said it is yet to be determined if the airlines want to
pursue it as a separate CIP project, pay for the systems directly,
or whether it is going to be under the PFC application.
REPRESENTATIVE HALCRO noted that $1.8 million will be saved on
interior construction for the third floor office spaces. He
wondered if this was for the 9000 square feet of unfinished office
space.
MR. KETNER said no, and he explained that there is roughly 22,000
square feet available for future airport administrative offices on
the third floor, as well as a "VIP room," the Alaska Airlines board
room, and other lease offices. The entire third level would be
left unfinished, and the interior building of that area is the $1.8
million figure.
Number 534
REPRESENTATIVE COWDERY reported that a question arose last year
about Project Labor Agreements (PLAs). He recalled that the
commissioner of DOT/PF stated at that time that there were no plans
for PLAs, and he asked if that has changed.
MR. EBERLE said no, but he mentioned that it was his understanding
that the commissioner of DOT/PF has recently been approached by
union representatives interested in PLAs. To his knowledge, he
stated, that has not happened.
REPRESENTATIVE COWDERY felt that it would be inappropriate for a
government project to enter into PLAs, and that it would cut out
many contractors, possibly at a lower price. He emphasized that he
would be very much against that taking place, and he believed it
would not be in the best interests of everyone concerned.
CHAIRMAN WARD confirmed that Mr. Ketner is Project Manager for the
Terminal Redevelopment Project. He said, "If, in fact, ... these
committees are under the impression that the project is not going
forward as the way we had anticipated it when we funded it last
year, and if there had to be a realignment of the project to work
within the existing budget ... as project person, where would you
reduce back in order to make this fit into the existing funding
sources that there are?"
Number 557
MR. KETNER indicated that the team put together a number of
alternatives that were reviewed by both the airport and the
airlines, and, in some cases, were reviewed in a public forum.
They currently have a list of cost-cutting measures that do not
represent the original concept versus the current schematic design.
There are additional opportunities to reduce cost, he noted, but it
would probably involve reducing square footage. They plan to take
this to the air carriers and work with them to see where future
reductions might be appropriate.
CHAIRMAN WARD emphasized that the airport belongs to the public,
not the air carriers, so he hoped that they were willing to take
suggestions from the public. He asked if they had gone through
"the exercise of staying within the budget." All of this money
comes out of one pot, he added, and even the railroad is part of
public funding. Moving money around from project to project still
involves using money that belongs to the people, he explained.
Number 580
MR. KETNER said, "First of all, all the costs that would be
associated with a CIP would either come through PFCs, which would
be generated as airport revenue, or it would be a separate CIP
request generated as the International Airport Revenue Fund (IARF)
... under the standard CIP process." He felt that the important
question for the project team to answer is, "How are we going to
stay within the $230 million?" He indicated that it was fair to
characterize the baggage system costs as substantially beyond what
was originally anticipated. He admitted that there may have been
some underestimation on their part initially; however, it was
nowhere near the $13 million requested by the air carriers. The
air carriers brought up that it is customary at other airports, in
some cases, for airlines to bear that cost or to look at other
funding opportunities.
Tape 99-11, Side B
Number 001
MR. KETNER declared that the Airport Redevelopment Project is still
within its original budget, with the exception of the separate
funding for the baggage, even with the increase of over 60,000
square feet.
CHAIRMAN WARD asked if there was a contingency plan in place.
MR. KETNER indicated that the contingency plan would have to be
processed by going back to the airlines, the users of the terminal,
and the public to look at how further cuts could be made. He
related that the team has ideas as to what can be cut, but those
ideas have not been prioritized at this point in time.
CHAIRMAN WARD asked Mr. Ketner to submit those ideas to the
committees as soon as they are available.
Number 013
SENATOR PEARCE said, "Depending upon what calculation you used and
whether you'd consider the escalation over the original project
costs to be normal or not normal, you are now 17 percent over
budget, if you count that escalation, plus the $20 million in
original things that you are not going be able to do, or you're
going to have to come back and ask us for more money one way or
another, because if it's PFCs, it would still have to be
appropriated. If it's IARF funds, that still has to be
appropriated." Furthermore, she added, it is the people of the
state of Alaska who will end up having to pay, as they are the ones
who fly the airlines. She noted that PFCs have not yet been
approved, and may not be approved, and that the additional $25
million requested may not be approved either. In addition, the
project may end up being shut down until it is able to fit inside
the original cost, because, she said, "we are not giving you any
more money. This isn't like building a house and some rich uncle
hands you more dollars. This is sticking with the budget."
MR. KETNER asked for clarification as to whether or not Senator
Pearce was including the escalation outside of the budget.
SENATOR PEARCE said no.
MR. KETNER clarified that the escalation was determined to the mid-
point of construction, and the design and construction budget they
are working to right now is $205.3 million.
SENATOR PEARCE declared, "You have already used every dollar of
that."
MR. KETNER said that was correct.
SENATOR PEARCE noted that every penny has already been used, and
asked, "When you get to the midway, if you have some other
problems, where are you going to go?"
Number 032
MR. KETNER said, "In terms of ... program contingency, you are
absolutely correct."
SENATOR PEARCE reiterated, "You've already used all your
contingency monies and you are three percent in." She again asked
what the project will do now for funding if something comes up that
they did not know about ahead of time.
CHAIRMAN WARD asked Mr. Ketner, as Project Manager, if this is how
projects are usually done.
MR. KETNER indicated that the program contingency was initially set
up for adjustments in the program. He agreed that it was fair to
say there could be the need for some program adjustments in the
future. He said there is a 10 percent change order construction
contingency on new construction and a 15 percent contingency on
renovation. In addition, he felt that a fairly conservative
estimate has been built into the renovation figures, as they
realized certain unknowns might be identified in the renovation
process. He pointed out that they were fairly comfortable, at this
point in time, with the renovation budget, but said, "That does not
take away from Senator Pearce's point of view that some additional
contingencies further into the project might be advisable." He
added, "It appears ... right now the scope on the project has
solidified to a point where we know what we're designing. We're at
the end of schematic design, where certain decisions would have to
be made, so that we can move ahead with higher level design. At
this point in time, we've gone to the airport, we've gone to the
airlines, to make those decisions and they've made them. ...We're
moving ahead with the more detailed design in order to meet the
schedule."
Number 052
SENATOR PEARCE wondered if they said no to anything the airlines
asked for, and, if so, what those things were.
MR. KETNER said yes, and noted that some of the items were in the
"Cost Reduction List" in the booklet, and that there were other
ideas that he felt would provide a fairly severe cut, such as
reducing gate lounge areas, ticket lobby areas, and baggage claim
lobby square footage. He noted, however, that all of those items
have fairly significant impacts on the functionality of the
terminal. He stated that the team has tried to make decisions by
taking into consideration both airline input and the best interest
of the traveling public in terms of level of service.
SENATOR PEARCE noted that the Terminal Redevelopment Project
currently has both a language and a budget problem, and she
suggested that they fix both of those problems.
Number 065
REPRESENTATIVE COWDERY noticed that the final design is not
scheduled to be done until July 2003; however, he wondered if it
was still true that construction will not be started this year if
the additional $25 million in bonds is not authorized.
MR. KETNER explained that, in terms of schedule, Terminal "C"
replacement is the most challenging part of the construction. He
described a fairly tight design time line in getting a bid package
out to begin the two phases of the project: first, foundations and
steel, followed by the balance of the terminal. He indicated that
one of the most important objectives, from the airport's point of
view, is to achieve a replacement of Terminal "C" by tourist season
of 2002. If it is not completed by April of 2002, he cautioned,
the next point of opportunity to benefit from that improvement
would be the next tourist season.
CHAIRMAN WARD asked, "Is that a yes or a no?"
MR. KETNER indicated that the policy has been to work with the
airlines to address any significant changes in scope, and the time
line to do that would jeopardize the design and construction time
line, which are already fairly aggressive.
CHAIRMAN WARD said, "So, if there was a 'blip' at this point ...
the answer would be that it would not continue on. Is that
correct?"
MR. KETNER stated, "I think a fair way of answering that is that
there is a chance that the time it would take to redefine the
changes would slow down the design process to where we may be
pushed to 2003 for Terminal 'C' replacement or to have that be the
next benefit year in terms of a peak period for tourism."
Number 098
REPRESENTATIVE COWDERY asked if Terminal 'C' was estimated to be
around the $60-million range.
MR. KETNER said yes.
REPRESENTATIVE COWDERY noted that the demolition would be started
within a couple of months, and the contract replacement would be
let in January 2000. He said, "At the time that the contract to
Terminal 'C' was let, that money would be in place to ... for that
contract, obviously. It would have to be in place."
MR. KETNER said that was correct.
REPRESENTATIVE COWDERY continued, "So, there would be other things
that probably cost more than what we are talking about, the $25
million, that would be considered ongoing projects, that the
contracts probably wouldn't be let at that time, or it might be let
at a later date. Is that right?"
MR. KETNER said he believed that was so. He added, "I think it's
a fair statement to say that we're at the end of schematic design
right now, and we have defined this piece of work as the biggest
challenge for our design team. To get a package out on the street
by [the] end of 1999 for foundations and steel is a significant
challenge from a design perspective. That's our critical path
right now. So, telling our design team what it is they're
designing, this is where the decision point has to come in order to
meet this time line for construction." He noted that if the design
time line is moved, other lines will have to slide out as well.
REPRESENTATIVE COWDERY said, "It seems to me that this is a $230
million project, and, certainly, [we're] not going to let a $230
million contract in this year ... or next year. It'll be phased
into different phases."
MR. KETNER confirmed that was correct.
Number 125
MR. EBERLE stipulated that, if the legislature had concerns over
the present scope of the project, and they were not going to get
the $25 million requested, they would have to go back and redefine
what it is they are going to build, in terms of the new Concourse
'C' replacement, and that would stop the project. He added, "If we
have to carve $25 million out of this overall project, we need to
sit down with the airlines and figure out what they can live
without, what is going to be the least disruptive to them. That
process is going to take time, and, as Don [Ketner] mentioned, the
design for Concourse 'C' replacement is the critical path." He
pointed out that any disruption of the critical path pushes the end
date out. He added, "If we have to re-scope this project and cut
out additional aspects of the terminal, we need to do that before
we've gone ahead and designed it; otherwise, we've thrown away all
that money."
REPRESENTATIVE COWDERY clarified that the project would still
receive $25 million eventually through FAA at approximately $2.5
million per year.
MR. EBERLE said that was correct, but that it would redefine "what
gets built in what time line, and we can't do that unilaterally.
It was a package deal when the airlines voted on it: airside,
landside and the terminal."
Number 151
REPRESENTATIVE HALCRO had a question for Morton V. Plumb, Jr.,
Director, Anchorage International Airport, DOT/PF, who was on-line
from Anchorage. He mentioned that he had asked Commissioner
Perkins last week about the airport's rumored expansion into the
Sand Lake Gravel Pit area, and that he was assured the committee
would be "kept in the loop" should discussions progress. He asked
Mr. Plumb if there has been any discussions with private developers
trying to pitch the airport expansion into the Sand Lake Gravel Pit
area within the last four to five months.
Number 161
MORTON V. PLUMB, JR., Director, Anchorage International Airport,
Department of Transportation and Public Facilities, testified via
teleconference from Anchorage. He said, "The short answer to that
is yes. We have continued to have people that have done some
exploratory work in that area. We have not had anyone officially
come to the airport with an application or with an exact plan. As
you may be aware, we are going through our master plan update at
this time. We are probably about 30 to 35 percent through that.
At the end of that time, that will give us a much better idea of
future land requirements and the time that will be needed."
REPRESENTATIVE HALCRO asked if these private developers were the
same individuals that approached him one year ago.
MR. PLUMB said yes, but that he was uncertain if they now represent
two different groups or are still joined together.
REPRESENTATIVE HALCRO asked, on behalf of himself and Senator
Pearce, to be kept updated as far as these discussions and
activities. He stressed that it was very important to their
district, especially with some emerging subdivisions right in the
path of expansion. He said, "I know, at one point in time, the
developer had asked you for 'confidentiality,' but ... the fact is
that this is a public process. The airport is a public facility"
MR. PLUMB recalled that some of these individuals actually went to
some of the community council meetings at Sand Lake. He thought
the only thing that had been requested from them in the way of
proprietary information was their layout or business plan, but he
felt the intent was pretty well-known.
Number 190
CHAIRMAN WARD recommended that individuals also attend community
councils in Bayshore, Klatt and Ocean View, as they seem to have
some concerns about flight patterns.
MR. PLUMB indicated that he would be happy to do so; in fact, he
lives in that area.
Number 201
CHAIRMAN WARD asked Mr. Eberle to be sure to be in contact with
Chair Masek's office and his office so that some type of a plan can
be formulated. He concluded by stating, "I think that, as we all
voted for Representative Cowdery's bill last year to do this, it
was the intention to do one thing, and, if the majority of the
legislature didn't understand what they were voting on, then we
need to reeducate everyone to see if we can all get back on the
same sheet of music, and in a timely manner."
Number 210
ADJOURNMENT
There being no further business before the committees, the joint
meeting of the Senate and House Transportation Standing Committees
meeting was adjourned at 2:42 p.m.
NOTE: The meeting was recorded and handwritten log notes were
taken. A copy of the tape(s) and log notes may be obtained by
contacting the House Records Office at 130 Seward Street, Suite
211, Juneau, Alaska 99801-1182, (907) 465-2214, and after
adjournment of the second session of the Twenty-first Alaska State
Legislature, in the Legislative Reference Library.
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