Legislature(2001 - 2002)
01/18/2001 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
ALASKA STATE LEGISLATURE
JOINT MEETING
HOUSE TRANSPORTATION STANDING COMMITTEE
SENATE TRANSPORTATION STANDING COMMITTEE
January 18, 2001
1:35 p.m.
HOUSE MEMBERS PRESENT
Representative Vic Kohring, Chair
Representative Beverly Masek, Vice Chair
Representative Scott Ogan
Representative Drew Scalzi
Representative Peggy Wilson
Representative Mary Kapsner
Representative Albert Kookesh
HOUSE MEMBERS ABSENT
All members present
SENATE MEMBERS PRESENT
Senator John Cowdery, Chair
Senator Jerry Ward, Vice Chair
Senator Robin Taylor
Senator Gary Wilken
Senator Kim Elton
SENATE MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
STATEWIDE TRANS. IMPROVEMENT PROGRAM (STIP) PROCESS, FUNDING
SOURCES: FEDERAL, STATE, AND LOCAL GOVERNMENT MATCHES
WITNESS REGISTER
KURT PARKAN, Deputy Commissioner
Department of Transportation & Public Facilities
3132 Channel Drive
Juneau, Alaska 99801-7898
POSITION STATEMENT: Provided information on the Department of
Transportation and Public Facilities.
THOMAS B. BRIGHAM, Director of Statewide Planning
Department of Transportation & Public Facilities
3132 Channel Drive
Juneau, Alaska 99801-7898
POSITION STATEMENT: Provided information on statewide planning
policies and procedures of the Department of Transportation and
Public Facilities.
FRANK RICHARDS, State Maintenance Engineer
Department of Transportation & Public Facilities
3132 Channel Drive
Juneau, Alaska 99801-7898
POSITION STATEMENT: Provided information on highway maintenance.
GEORGE CAPACCI, Captain and General Manager
Marine Highway System
Department of Transportation and Public Facilities
3132 Channel Drive
Juneau, Alaska 99801-7898
POSITION STATEMENT: Provided information on Marine Highway
System.
ACTION NARRATIVE
TAPE 01-2, SIDE A [HOUSE TRA TAPE]
Number 0001
CO-CHAIR JOHN COWDERY, Senate Transportation Standing Committee
called the joint meeting with the House Transportation Standing
Committee meeting to order at 1:35 p.m. Members present were
Representatives Kohring, Masek, Ogan, Scalzi, Wilson, and
Kapsner, and Senators Cowdery, Taylor, Ward, Wilken, and Elton.
Number 0067
KURT PARKAN, Deputy Commissioner, Department of Transportation
and Public Facilities (DOT&PF), reported that he had brought
handouts and other information requested by the committee at its
previous meeting.
Number 0255
MR. PARKAN offered a handout ["Estimates of DOT&PF Cost Savings
by Not Paying 50% of the Non-Federal Match Requirement for
Anticipated AIP Projects at 6 Specific Local Sponsor Airports"]
in response to Senator Elton's question about potential general
fund savings if the state did not participate in the federal
program for municipally owned airports. Mr. Parkan said the
handout had been provided by the DOT&PF statewide aviation
office using information from the Federal Aviation Authority
(FAA). The estimate for federal fiscal years 2001-2005, based
on entitlements scheduled to go to particular airports plus the
capital project requests that those airports have submitted to
the FAA, was for $1.76 million in general savings to the state.
[Mr. Parkan's second handout addressed Representative Kohring's
question on the .08 [blood] alcohol [level reading].
Information in it was provided by the United States Department
of Transportation Highway Administration. The information,
broken down by state, shows how much money the State of Alaska
would lose if the state fails to implement the policy.]
Number 0399
MR. PARKAN then presented two handouts related to Senator Ward's
questions about rural airports, their runway lengths,
facilities, lights, and related information. One listed all of
the airports in the state. The second was a sample of
information available on the Internet, what the FAA calls "50-10
information," based on the FAA's Alaska Supplement, which he
characterized as containing "pretty much all the information
pilots use in flying into the state."
Number 0536
SENATOR WARD said he had been hoping that a state that was in
charge of this many airports, or that had some degree of funding
responsibilities, might have compiled a list of what they [the
airports] all were. However, he would go to the Internet.
Number 0547
MR. PARKAN explained that the Alaska Supplement published by the
FAA is the basic reference, and is used extensively. DOT&PF
helps provide and update the information in it. In response to
Senator Ward's request, he promised to provide two copies of the
book [the Alaska Supplement] to put on file for use by both the
House and the Senate.
Number 0595
MR. PARKAN then provided information pertaining to Senator
Taylor's questions about the Bradfield Road. A considerable
amount of review has taken place on that road, he said. He gave
out copies of two documents submitted to the legislature in
1997. He described the first one as "a summary of the Bradfield
project and why it's not considered a viable project, with some
background as to why," which DOT&PF had prepared, and the second
one as a feasibility study by the United States Department of
Agriculture (USDA) Forest Service on the same project. He noted
that both documents include information relating to the British
Columbia (BC) government's reluctance to support the project.
CO-CHAIR COWDERY asked if the BC government is still reluctant.
MR. PARKAN replied that DOT&PF has heard nothing to the
contrary.
Number 0727
MR. PARKAN recalled testimony given last week by Thomas B.
Brigham [Director of Statewide Planning, Department of
Transportation and Public Facilities] that the road probably
would be a $300 million dollar project, adding, "very expensive
when you consider that our entire state program is about $400
million."
SENATOR WARD asked if DOT&PF would be contacting the BC
government to see if there has been any change in their
opposition.
NUMBER 0777
THOMAS B. BRIGHAM, Director of Statewide Planning, Department of
Transportation and Public Facilities, said the department would
be happy to do so. He explained that ore mined in Canada's
Iskut River Valley now is hauled to Stewart, a Canadian port,
for export. He said he thought the BC government was not likely
to support shipping the ore through an American port, even
though the route might be shorter and more cost-effective.
Number 0803
SENATOR WARD asked DOT&PF to call Canada and report back to the
committee.
CO-CHAIR COWDERY said that if there were a change in position,
it would be helpful to get it in writing.
MR. BRIGHAM said that might prove to be more difficult since it
is a diplomatic issue, and the Canadians were not willing to put
their position in writing the last time the subject was
discussed. However, he said, DOT&PF would do what it could to
get the best [indication].
CO-CHAIR COWDERY said he was sure that Senator Taylor would like
to get as much as possible in writing, and suggested that
Senator Taylor might have been able to secure that if he had
been present at the last meeting.
MR. BRIGHAM observed that he did not think there was anything
that would prevent the committee or any legislator from
contacting a counterpart in British Columbia about the issue.
There is no question that it [a change in the Canadian position]
would shed a whole new light on the project, he said.
CO-CHAIR COWDERY added, "But our counterpart is the legislature;
your counterpart is in administration, right? And so I think
administration would...like to get the letter from
administration if at all possible."
MR. PARKAN said he had brought one more item, which the
committee had not requested but might be of interest. It was
material from a presentation that the [DOT&PF] commissioner had
given to the House Finance Committee the previous day on DOT&PF
missions and performance measures and how the department had
performed last year on the measures that were included in Senate
Bill 281.
Number 0928
REPRESENTATIVE KOHRING asked for an explanation of the handout
entitled, in part, "Estimates and Costs Savings."
MR. PARKAN recalled that at the last meeting, Senator Elton had
asked about the department's decision to discontinue
contributing 50 percent of the match requirement for FAA
projects at municipally owned airports. "We [DOT&PF] felt those
communities could cover that match requirement themselves, and
there was discussion about that," he said. Senator Elton had
asked how much the state was going to save in general funds as a
result. Currently, for FAA projects, there is about a 7 percent
general fund match requirement to the federal dollars that come
in, he said. The state has been contributing general fund
dollars at half of that match for the larger communities in the
state -- Juneau, Kenai, Anchorage, Merrill Field, Palmer,
Soldotna, and Wasilla.
Number 1046
REPRESENTATIVE KOHRING said he was concerned that municipalities
-- which often have agreed to take over the operations and
management of municipal airports -- might be left with little
incentive to continue to participate "if they're going to be not
only short of these monies, but also assuming the operation and
management."
MR. PARKAN replied that most of these airports (with the
possible exception of Wasilla) have been municipally owned and
operated for many years. He said DOT&PF had considered the
possibility that Representative Kohring raised, but felt that
the agency's action would not create an overall disincentive.
When there was a squeeze in the capital budget a few years ago,
DOT&PF had been asked to reduce its match requirement, he said,
and this was one area in which the agency did not have a
responsibility. "They weren't our airports," he pointed out.
"In a way, it has been a kind of municipal assistance offer in
which we have participated when we were able and had the general
funds to do so." Mr. Parkan said the agency had given
communities ample notice of the policy change so they would have
time to adjust future budgets and not have to make the
accommodation in their current fiscal year. He noted that
landing fees are an option open to communities to offset the
loss of state funds.
Number 1229
SENATOR ELTON said the objection he has to the decision made by
DOT&PF is that, those communities that are most responsible in
maintaining their ports and harbors are the ones that are
getting squeezed. He said he thought the department's decision
is going to make it more difficult to convince other
municipalities to assume those responsibilities, "if they know
they are going to have to pick up these costs."
Number 1381
MR. BRIGHAM distributed another handout and gave a broad
overview of the Statewide Transportation Improvement Program
(STIP) process. The program consists of four pieces: the
National Highway System, of which the Marine Highway System is a
designated part; the state highway system, which is located
primarily in central Alaska; the Community Transportation
Program (CTP), consisting of local roads and streets; and Trails
and Recreational Access for Alaska (TRAAK), including highway
pullouts and enhancements.
SENATOR WARD asked where the scenic highways fall into that.
MR. BRIGHAM replied that the department has been able to fund
that program by successfully competing for scenic byway grant
money.
Number 1492
MR. BRIGHAM explained that CTP and TRAAK projects are proposed
by advocates from the local level, then evaluated and given a
numerical score by DOT&PF to determine the order in which they
will be funded.
MR. BRIGHAM then called attention to a page of the handout
describing how a local community can get federal money for a
project. He said the first step would be for the community to
talk to DOT&PF planning people in their region to find out if
the project might be eligible for federal funding, and if so,
how to present the local project in the most effective manner.
He stressed that it was up to the local governmental unit, not
the state, to determine if a project has local support.
Number 1597
SENATOR WARD asked if a project could originate at the state
level without any local involvement.
MR. BRIGHAM said that "almost never happens" except when there
is a state road in the area that DOT&PF is responsible for
maintaining, in which case DOT&PF might initiate dialog with the
local community about improving the state highway that runs
through town.
Number 1619
SENATOR WARD referred to a proposal for a TRAAK project put
forth by Representative [Joe] Green about maintaining the Tony
Knowles Coastal Trail in the district that both Representative
Green and Senator Ward represent. He said there had been no
expression of support from the community in Anchorage, and asked
if that project had become a priority.
MR. BRIGHAM said that was an atypical project.
SENATOR WARD asked if there had been any local resolution of
support for that project.
MR. BRIGHAM said he thought that [formal expression of support]
had come several years ago from the Municipality of Anchorage,
and that the project would have to have been chosen by the
Anchorage Metropolitan Area Transportation Study to have
advanced to the environmental [impact study] stage. He added
that he was aware that the project was a complicated and
controversial one.
MR. BRIGHAM, in response to a request by Senator Ward, said he
would be happy to provide a copy of the local resolution
supporting the extension of the Tony Knowles Coastal Trail.
Number 1691
SENATOR ELTON asked if DOT&PF had changed its evaluation and
review process in Southeast Alaska in response to the Southeast
Transportation Plan. He wondered if the response had changed
the way the department would review and evaluate a project for
the STIP.
Number 1712
MR. BRIGHAM said there are two parts to that answer. First, if
many of the projects that were contemplated as part of that plan
were community transportation-type projects, yes, it would; but
very few of them are. Most of them are National Highway System
projects. Although DOT&PF has tried to give them as much
priority as it could, recognizing the need to improve the cost
structure of the Alaska Marine Highway as soon as possible, it
takes capital investment in order to realize that, he said.
MR. BRIGHAM said the second part of the answer is that the first
review of the local project proposals is made by the appropriate
DOT&PF regional office. The projects are given a preliminary
score based on certain criteria. Anything above about 70, which
is a mid-level score, is sent to the statewide competition.
There it is given a final score by the Project Evaluation Board,
a six member statewide group, and listed in the overall program
in the order of score.
Number 1823
MR. BRIGHAM then called attention to a diagram of the steps that
DOT&PF follows for the full STIP. The department is now in the
2001-2003 STIP, he noted. Work on that began nearly two years
ago when the department gave public notice that it was looking
at the [selection] criteria. Three to four years ago, a lot of
communities that lie outside the road system had come forward
and said it wasn't fair to give so much weight to local
contributions of capital or cash because many of the communities
in remote areas don't have any money. He said DOT&PF responded
to that with some restructuring.
MR. BRIGHAM said the department then does a broad solicitation
asking communities for their ideas, outlining what is federally
fundable, and asking that projects be sent in. Then the
regional office works with the communities. Noting that it is
hard for small communities to present a project in an effective
way because they do not have people with expertise in
engineering or transportation, he said that having the DOT&PF
regional people work with those communities is a key part of
making the process a fair one overall. Projects are then
evaluated at the regional level, and the higher-scoring projects
go to the statewide evaluation. The department then scores all
of the projects and publishes a "needs list." That is a list of
everything that was requested, and is intended to be a
comprehensive list of the transportation needs around the state
-- roads, aviation, ports and harbors, everything. Some of
those are "wants," but most of those are clearly "needs," he
said. DOT&PF drafts a preliminary program in the back of that
[list], based on the scores they have at that time, he said.
Number 1948
MR. BRIGHAM said people then responds to that preliminary
listing, and may do so in a way that will raise a project's
score. For example, if a community takes over a road and
maintains it after the state improves it, that project gains a
lot of points, he said. That reflects a very clear and
consistent bias on the state's part that the local streets
should be the local responsibility.
MR. BRIGHAM said that the needs list is out for 45 days, and
there is public review of it in all major communities. He
described this part as the most extensive public process the
department undertakes. "That's when people need to react," he
said, adding, "We get a lot of comments at that stage." DOT&PF
takes the comments, re-scores things, and publishes a draft
STIP. That draft is out for another 30 days. The department
makes more changes, and then gives the final STIP to the federal
Highway Administration and the Federal Transit Administration;
they need to approve the STIP because it is a federal document.
They usually do so in about two weeks, and we have a new STIP,
he said.
Number 2092
MR. BRIGHAM then explained that for the 2001-2003 STIP, DOT&PF
started very early so the plan could be used for the
department's FY 2001 budget submittal to the legislature.
DOT&PF revised the STIP timeline specifically to align it with
the capital budget timeline, and they are now coordinated
reasonably well, he said.
SENATOR WILKEN referred to the process development page and
asked how much time elapses between Step 1 and Step 10.
MR. BRIGHAM replied, "Easily a year and a half."
SENATOR WILKEN noted that there was overlap.
MR. BRIGHAM concurred, saying the key is to start early enough.
SENATOR WILKEN then asked about scoring in Step 4, inquiring how
many different parameters are used, and if there is a list of
those and their relative weights.
MR. BRIGHAM said there are 12-15 parameters, depending on the
program, and that he would provide information about those
parameters.
SENATOR WILKEN asked if the selection criteria mentioned under
Step 4 are what the department is thinking about putting in
regulation.
Number 2171
MR. BRIGHAM said that is part of it, and that "this process is
what we're working on putting into regulation right now."
MR. BRIGHAM referred to page 6 [of the STIP Explained handout]
noting that no process is ever perfect. "You set up your
process to handle what you usually get, and you inevitably get
some worthwhile projects that are a little different and don't
fit the criteria," he observed. He emphasized that DOT&PF tries
to be as fair as possible, which is the objective.
MR. BRIGHAM referred to page 7 [of the STIP Explained handout],
noting that there is a different set of criteria for each of the
programs. The rural and urban street program covers the bulk of
the roadway projects, he said. In addition, there is a set of
criteria for transit projects and another one for remote
projects, most of which are for "very fundamental
infrastructure," such as for sewer, water, or solid waste. He
pointed out that the criteria are biased toward those sanitation
projects, and that the state undertakes those projects in
concert with the Bureau of Indian Affairs.
Number 2284
REPRESENTATIVE OGAN asked if by "rural sanitation projects," Mr.
Brigham was referring to the "put the honey bucket in the
museum" objective.
Number 2305
MR. BRIGHAM said yes, noting that Village Safe Water and Public
Health Service projects often create a sewage system with a
sewage lagoon or some other kind of storage facility, and "you
need a road out to that to make it functional, and that's the
part we provide."
Number 2326
REPRESENTATIVE OGAN observed, "So you're not actually building
the sewer systems or overseeing those contracts."
MR. BRIGHAM said that was correct. He said those projects
usually are a cooperative effort with the state Department of
Environmental Conservation (DEC) and the Public Health Service.
Typically, those agencies will handle the basic infrastructure
project and any DOT&PF work would simply be in support of that,
he explained.
Number 2341
CO-CHAIR COWDERY asked what impact the Denali Commission has had
on this.
MR. BRIGHAM said the impact has been very positive because it is
not uncommon to see a housing development funded by the federal
Department of Housing and Urban Development (HUD) that is not
connected to any sewer or water infrastructure and does not have
a road to it, since no one planned that ahead of time. Although
The Denali Commission has been focusing on things like bulk fuel
storage and similar efforts, they have consistently and
continually raised the issue of "We've all got to be working off
the same sheet of music here." The DOT&PF supports this 100
percent, he said.
Number 2370
MR. BRIGHAM mentioned that DOT&PF follows a similar process for
aviation projects, with a comparable review group and scoring
process.
TAPE 01-2, SIDE B
MR. BRIGHAM continued, saying, "The FAA is much more controlling
about which projects actually get funded than are either the
Federal Highway Administration or the Transit Administration.
They let us pretty much develop the program and simply make sure
everything is eligible. FAA, on the other hand, actually
selects the projects in many cases." He said the state tries to
have enough aviation projects in the hopper so that "a good
group of projects" is selected, and that approach has been
"pretty successful" over the past few years. The FAA likes this
sort of scoring process and uses a similar sort of process for
their nationwide selections, he added.
Number 2340
MR. PARKAN volunteered that the FAA liked the system Alaska had
established. "The scoring criteria, the matrix that we will be
sharing with you, they liked it so much that they chose to adopt
it, our model, nationwide, and they are using a similar model
now nationwide in the selection for all projects," he added.
Number 2315
MR. BRIGHAM noted that DOT&PF "would love to do a lot of port
and harbor projects, but there is no federal funding program for
that outside of a little bit of [U.S. Army] Corps of Engineers
money for navigational improvements and that sort of thing that
we get each year." He pointed to that as a weakness in the
current program statewide. "We really have no way to replace
and repair a lot of these port and harbor facilities that in
many cases were built right after the '64 earthquake... [And
that] are now getting old," he said.
Number 2285
SENATOR ELTON asked if the scoring criteria for ports and
harbors include a "boost" for projects that the local community
will take over and maintain once the facility has been brought
up to code.
MR. BRIGHAM said he thought that was the case.
MR. PARKAN said they would check and provide a written answer.
Number 2235
CO-CHAIR COWDERY asked about the "weepy" buried fuel tanks in
Whittier, something the federal government had left behind, and
said he hoped DOT&PF had that "all squared away."
Number 2213
MR. BRIGHAM referred to page 8 [of STIP Explained handout],
which deals with the evaluation board. He explained that the
regional director presents the project and the other members of
the board then score it. He characterized it as a "spirited
process."
Number 2164
MR. BRIGHAM said other factors also can affect where a project
is placed in the STIP. These typically don't affect a lot of
projects, he said. The placement of the sanitation projects
discussed earlier generally is determined by Village Safe Water/
Public Health Service. If a solid waste facility is going to go
in 2003, that is when the state tries to schedule the road. "As
a lot of you know, mobilization in the Bush is a big deal," he
said. "It's a big part of your costs, so you generally want to
do all the work that you can while you are there."
MR. BRIGHAM referred to page 10 as he explained that DOT&PF does
not score the federal highway projects, in part because those
projects are limited "to essentially all our main highways." He
said, "our approach has been very simple." We've just tried to
focus on the highways that are in the worst shape, that are the
farthest out of compliance with current standards of width,
grade, and alignment, and do at least one of those a year." He
pointed to the Glenn Highway and the Seward Highway as examples
of federal highways of which a piece is being improved each
year. He said the Parks Highway also is nearly done, as are the
most heavily used portions of the Richardson Highway, but that
the Dalton Highway "has a long way to go."
Number 2018
SENATOR WILKEN requested a copy of a map showing which highway
sections have been completed and what parts are scheduled next.
MR. BRIGHAM agreed to provide this.
SENATOR WILKEN asked if they had any idea of when work will be
finished on the Richardson Highway from Fairbanks to Valdez.
MR. BRIGHAM estimated it would be eight to nine years. Once the
Glenn Highway is finished, more money will be available for the
Richardson, he added. The department's goal is to have it all
up to current standards in ten years.
Number 1957
SENATOR WILKEN asked about the Shakwak Project, and if any more
money needs to be authorized.
MR. BRIGHAM said he understands that the last authorization will
bring the upgrade all the way from the U.S.-Canadian border to
Kluane Lake. The Canadians have been, in his opinion, making
good use of the money, he said. The U.S. portion was expanded a
little bit to let DOT&PF do two pieces of the Haines Highway,
the parts on the U.S. side, which were bad compared with the
roadway on the Canadian side, he added.
SENATOR WILKEN said the improvements to that highway certainly
have made a difference, and that people in Anchorage and
Fairbanks benefit from truckers who will come over that highway
now who wouldn't come over it before. That creates some level
of competition, helping to keep in check the rates that water
carriers are charging, he observed.
MR. BRIGHAM concurred, saying truck travel time has fallen
dramatically.
Number 1850
CO-CHAIR COWDERY alluded to a previous discussion regarding the
status of the federal funds being used for operations and
maintenance.
MR. PARKAN recalled that they had been talking about the use of
the investment earnings for the GARVEES [a type of bond
financing mechanism], and he said that Frank Richards is
prepared to talk about how DOT&PF is using federal funds for
some deferred maintenance needs.
CO-CHAIR COWDERY said he thought somebody asked for a letter,
"and you said the feds had verbally approved doing that, but
somebody here..."
SENATOR WARD volunteered, "It was me."
CO-CHAIR COWDERY continued, "...asked for a letter stating
that."
Number 1802
MR. PARKAN said he thought the request had to do with the GARVEE
issue, and he has in the past few days obtained some e-mail
messages between DOT&PF and the Federal Highway Administration
regarding that. "I do not yet have anything in letter form, but
we are pursuing that," he added.
CO-CHAIR COWDERY asked for an explanation of "force accounts."
Number 1770
FRANK RICHARDS, State Maintenance Engineer, Department of
Transportation and Public Facilities, said "force account" is
defined in the Code of Federal Regulations, which governs
appropriation of highway funds. "Force account is defined as
use of state or public government employees to do work using the
highway funds for construction and now for operational expenses,
maintenance on the highway systems," he said. "So in order to
be able to use force account methods, you have to go through a
public interest finding as defined by the Code of Federal
Regulations, Title 23."
CO-CHAIR COWDERY asked how many force accounts are typically
used in a year.
Number 1720
MR. RICHARDS said each region receives approximately three
separate allocations.
CO-CHAIR COWDERY asked how many procurement contracts in excess
of $100,000 have been awarded in the past fiscal year.
MR. RICHARDS said he would have to get that information back to
the chair.
CO-CHAIR COWDERY asked for the same information with regard to
federal services. He then requested an explanation of the Saint
Marys Project, which he characterized as a $3.5 million project,
and asked if it was done by force account.
Number 1677
MR. RICHARDS said the Saint Marys project is yet to be done,
that it is scheduled for next year. It is a project that the
northern region [of DOT&PF] is going to do using force account
efforts, he explained, and it will utilize individuals from
within the community who are trained operators in order to help
the economically affected areas.
CO-CHAIR COWDERY asked if that meant it would not be put out to
public bid.
SENATOR WARD queried, "So the process on that was whoever was
local got the bid?"
Number 1639
MR. RICHARDS replied no.
SENATOR WARD asked how many of the people were local.
MR. RICHARDS said the project is to be done using state
employees and a combination of state-owned and contractor-owned
equipment. Materials also will be procured through contract, he
added.
SENATOR WARD said he assumed that the private sector could not
do it for the same amount of money or less with the same level
of service, and asked if that assumption was correct.
Number 1603
MR. RICHARDS replied that he was not that familiar with the
actual dollar comparison.
SENATOR WARD asked if a dollar comparison was done.
MR. RICHARDS said that a dollar comparison had been done,
explaining that a dollar comparison is required [as part of] the
public interest finding. He added that DOT&PF Commissioner
Joseph L. Perkins "is very familiar with this" and will include
it in his presentation.
CO-CHAIR COWDERY asked, "if these are state employees who live
there in Emmonak or are they new state employees that are going
to be created to do this job? Are they in the public employees'
unions and things like that?"
Number 1661
MR. RICHARDS said the workforce will primarily be hired in Saint
Marys. They will be state employees through the bargaining
contract agreements, most likely Local 71 employees because they
will be operators and mechanics.
CO-CHAIR COWDERY asked if there are qualified people in Saint
Marys to fill the need.
Number 1545
MR. RICHARDS said there is a new program under Alaska Works that
is being funded with Denali Commission money as well as with
contributions from the AFL-CIO. People are going to be trained
so that they are competent operators who will pass the
Commercial Driver's License test, he explained.
CO-CHAIR COWDERY asked if the money for training would come out
of the $3.5 million.
MR. RICHARDS said it would not.
CO-CHAIR COWDERY asked if all of that money was being donated.
MR. RICHARDS replied that it was.
SENATOR WARD asked, "if the residency requirement would be a
driver's license and a post office box or will that be somebody
that had qualified for a permanent fund [dividend]."
Number 1509
MR. RICHARDS said he was not sure what the requirements would
be, but that the program would be open to people in Saint Marys
and people who are interested in working on the job would have
to fly there.
MR. RICHARDS, responding to the inquiry of an unidentified
committee member, explained that the project consists of
upgrading the surface of the gravel road from the village of
Saint Marys to the airport, a distance of approximately seven to
eight miles, removing boulders and covering the surface with
asphalt.
Number 1461
SENATOR WILKEN said he is curious about the Saint Marys project,
and what brought it to his attention was that a Fairbanks
contractor had prepared a bid and was expecting to be successful
at securing that $3.5 million project. The Senator testified:
It was pulled off the table and put under a force
account, as I understand it, because of the economic
disaster in that particular part of the state, and
that was a function of having no fish in the river for
that particular time. So what we have done here by
saying, well, there was no fish in the river this
year, we'll now take the fishermen or the fisher
people and make them operators to build a road that's
a one-time project, and when they should be fishing
next summer, they'll be building a road. So you sort
of perpetuate the fact that there are no fish in the
river because there are no fishermen out there
[because] they're building a road that could have been
built by Fairbanksans or Anchorage people or somebody
while the economy of Saint Marys is sustained by the
fish. We've jumped into the middle of this and we've
done really a disservice to two people: one, the
private contractor that expects to feed their people
in Fairbanks or wherever, and two, the people who are
residents of the village. We haven't done them any
favors by jumping in and spreading $3.5 million around
Saint Marys. This is a very nice, warm, "group hug"
thing that someone did to make everybody feel good.
And what they've done is two things that are bad, and
I'm not very happy about it, and so I expect we've
already had one explanation in December from
Commissioner Perkins. I expect we'll have another
explanation as to why this was such a good idea,
because I think it was a knee-jerk and I'm here to
make sure we don't have knee-jerks like this. The
force accounting system is in place, there's a defined
dollar limit, and it's there with a public interest
finding that's defined, and I've read through some of
them. They're hollow at best, and while I understand
the concept, in this particular case, I have great
concern about the application, and I hope we don't do
it again until we all understand why we take steps
like that, because I think we have hurt a lot of
people under the guise and under the will to just show
good intent, and I'm concerned about it.
Number 1357
CO-CHAIR COWDERY asked if there is a similar project going on or
being discussed in Emmonak.
Number 1346
MR. PARKAN said Emmonak has expressed interest, but DOT&PF does
not have a project planned there similar to the one in Saint
Marys.
NUMBER 1335
SENATOR WARD asked if there is discussion going on that would be
following the same procedure.
Number 1328
MR. PARKAN said that at this point, to his knowledge, there has
only been an expressed interest by the community of Emmonak.
There are other communities that are interested in force
accounting and there have been for years. "We don't want the
Saint Marys project to be considered a policy or precedent in
the future," he said. "Emmonak is not following a particular
path or process for force accounting."
Number 1335
SENATOR WARD countered with, "But you did follow a process to
get to this point, so if somebody else wants to re-create the
process (which several of them do now that they've seen this
nice little door open up), there's a process in place to
accomplish that."
MR. PARKAN replied, "Senator Ward, there is no specific process
in place. Every project request will be looked at individually.
and I can't say that Emmonak will be successful in their
request."
Number 1225
SENATOR ELTON said he knows that in Western Alaska, when the
fish don't come back, it has a ripple effect that goes far
beyond a storeowner or a bulk fuel seller; it has extensive
effects throughout those communities. He said it would be
helpful to him and perhaps to all of the committee if when the
commissioner comes before the committee, he brings someone from
Project Renew Hope or somebody else who is familiar with the
economic impacts in that area and how long-lasting they may be.
Number 1200
CO-CHAIR COWDERY, referring to the "Catch-22" situation about
which Senator Wilken had expressed concern, requested that the
commissioner address whether that is or isn't the case. He then
asked what a "public interest finding" or filing of it is.
Number 1160
MR. RICHARDS said a public interest finding is required by the
Code of Federal Regulations, Title 23, for the use of public
highways monies for force accounting. It is essentially a
costing comparison between public employees and public equipment
versus a contracting effort, basically a comparison of the cost
estimates. That filing is done by the region and provided to
the DOT&PF chief procurement officer. Once the commissioner
reviews and approves it, it is given to the Federal Highway
Administration for approval.
Number 1114
SENATOR WILKEN added that there is a "trip wire" where one would
need one. "What is the number, $50,000 or $100,000?" he asked.
[Several people talked at once, and it sounded as if there was
concurrence that the amount was $100,000.]
Number 1103
SENATOR WARD asked what the finding was in Saint Marys.
Number 1091
MR. RICHARDS replied that the finding was that use of public
employees and public equipment was cost-effective for
reconstruction of the road in Saint Marys.
Number 1080
SENATOR WARD asked if it was correct that there were some
criteria used, some kind of formula put into place in order to
arrive at that decision.
Number 1064
MR. RICHARDS answered, "That is correct."
SENATOR WARD asked if that procedure fits into Title 23 and has
been used on all projects.
MR. RICHARDS replied, "It is a procedure that we have instituted
in the expanding role of our ability to use federal highway
monies."
Number 1055
SENATOR WARD asked, "Is this a program that the State of Alaska
has made up in order to get to a finding?"
MR. RICHARDS replied, "No, sir, not a predetermined finding. It
is a true cost comparison. The [indisc.] must be justifiable."
SENATOR WARD observed that one probably could tell from the
questioning that there have been some people concerned with that
cost analysis and that those people have contacted the
legislature. He added, "some of us have been told on the face
of your evaluation that it just doesn't carry water, so maybe
some of that material could be given to us so that we could make
an independent analysis of it."
Number 1000
CO-CHAIR COWDERY said it wasn't clear to him whether these were
going to be new public employees.
MR. RICHARDS confirmed that they would be new hires.
CO-CHAIR COWDERY asked if they would be paid Davis-Bacon
[wages].
MR. RICHARDS replied that they would not, but rather will be
paid the bargaining contract wages for Local 71.
CO-CHAIR COWDERY asked if they all would be covered by Local 71.
Number 0970
MR. RICHARDS explained that the hiring process is such that if
an individual is interested in working for the state, that
person must sign up as a member of Local 71.
CO-CHAIR COWDERY asked if the workers would be considered
temporary employees.
MR. RICHARDS said they would.
CO-CHAIR COWDERY asked about the normal probation period.
Number 0942
MR. RICHARDS replied that under the bargaining contract with
Local 71, the probation period is six months.
CO-CHAIR COWDERY asked Mr. Richards to find out and report to
the committee how much maintenance work has been done and in
what areas, by force account in about the last three years.
SENATOR ELTON added that he would like to see that reported not
just as a number, but also as a percentage of total work.
Number 0882
REPRESENTATIVE OGAN said he had some serious concern about chip
sealing of the cracks in the roadways. He recalled that there
had been a "beautiful job of paving up there" about four to five
years ago. He said he recently became painfully aware --
literally -- of the cracks. He wanted to know how much of the
road will be lost by not sealing the cracks. Also, he said, he
has introduced bills in the past that have gone nowhere trying
to get prison labor to do things like seal cracks. He said, "I
keep hearing that, ...it's too technical. But [when] I talk to
the people in the field that actually do it, they say... it
really isn't technical at all." He said he is concerned that
Alaska is losing a lot of the life of its roads by not crack-
sealing the secondary roads. He said his primary question is
how many years are being lost by not crack-sealing, and would
the DOT&PF be willing to consider prison labor? He said he
understands that there could be a union problem, but observed
that the job isn't being done at all now.
Number 0730
CO-CHAIR COWDERY commented that it seems to him "that the bumps
in the road are not really the commissioner's fault or the
governor's fault, but the asphalt."
Number 0712
SENATOR WARD asked if there is going to be a project labor
agreement in Saint Marys.
Number 0674
MR. PARKAN said he couldn't envision having a project labor
agreement "with your own employees," but he would check and get
back with the answer to that as well as to Representative Ogan's
question.
CO-CHAIR COWDERY asked him also to follow up on "the new
projects that we have been talking about that are going to be
coming up: is it a policy to have project labor agreements on
those or not?"
Number 0639
MR. PARKAN said DOT&PF does not have a policy to have project
labor agreements on all new projects that come up.
CO-CHAIR COWDERY asked, "[On] any of them?"
MR. PARKAN said they have had project labor agreements in the
past and they have to meet a certain standard of need.
CO-CHAIR COWDERY said he'd like to find out about what might be
done in the future.
Number 0557
GEORGE CAPACCI, Captain and General Manager, Marine Highway
System, Department of Transportation and Public Facilities, then
gave a briefing. He said the Marine Highway System operates
nine aging vessels, noting that the average age of the fleet is
28 years, even taking into account the Kennicott, which is less
than three years old. The system covers routes of about 3,500
miles from Bellingham through Southeast Alaska to Haines and
Skagway, and through Prince William Sound to Homer, Kodiak, and
out the Aleutian Chain to Dutch Harbor. The ships call at about
34 different ports. Most of the vessels are in Southeast
Alaska, but there is one devoted to Prince William Sound and the
Tustumena works primarily out the Chain. The Kennicott, the
newest ocean-going vessel, makes trips in both regions.
Number 0439
CAPTAIN CAPACCI said there are about 750 maritime employees
within three unions within the Marine Highway System, and that
number fluctuates seasonally. About 50 more employees work at
the terminals, and there are about 45 on the "shore side staff"
in Juneau. In 1999, the ships carried 372,000 passengers and
about 150,000 vehicles, up about 5.5 percent in passengers and 4
percent in vehicles over the preceding year. The system is
seeing some moderate growth after a few years of decline in
traffic numbers.
Number 0377
CAPTAIN CAPACCI said, "We were on pace for a record year in
2000, but we had a significant challenge on June 6 when the
Columbia switchboard decided to have a lightning bolt and went a
little haywire..." he said. " That was a tremendous maritime
rescue that hasn't gotten the publicity it deserved. We
transferred 434 passengers in Chatham Strait from the Columbia
to the Taku without even a minor injury." He said he wants to
recognize the seamanship of the crews, who dealt so well with a
situation involving many elderly people and no electricity.
NUMBER 0249
REPRESENTATIVE WILSON interjected that she has not heard
anything but wonderful things about the way that was handled.
Number 0199
CAPTAIN CAPACCI said another challenge is meeting international
training regulations that take effect February 1, 2002, and the
system is "working feverishly" toward that deadline. Also,
significant increases over the past three years are responsible
for a significant unplanned expense, he said.
CAPTAIN CAPACCI explained that the international maritime
organization continues to come out with safety regulations that
are difficult to comply with by retrofitting aging vessels.
"Those international regulations are being blended right into
Title 46 of the U.S. Code, he said. The Marine Highway System
ships are considered passenger vessels, not ferryboats, so must
meet very strict safety regulations.
Number 0058
CAPTAIN CAPACCI then addressed the Southeast Alaska
Transportation Plan.
TAPE 01-3, SIDE A [HOUSE TRA TAPE]
CAPTAIN CAPACCI said that the Southeast Alaska Transportation
Plan is the result of "an incredible effort, a very
comprehensive public process" involving all of the communities
in Southeast Alaska. Residents said they need a more
conveniently scheduled, reliable daytime transportation system.
One of the central parts of the plan was a finding that shuttle
ferries or high-speed vessels throughout Southeast Alaska can
meet some of the demands customers have. The Marine Highway
System is working toward the implementation of the Southeast
Alaska Transportation Plan.
Number 0161
REPRESENTATIVE OGAN said he had heard that British Columbia is
getting out of the fast-ferry business.
CAPTAIN CAPACCI said that is true.
REPRESENTATIVE OGAN asked: If fast ferries are bad for British
Columbia, why are they good for Alaska?
Number 0187
CAPTAIN CAPACCI said the key problem with fast ferries in
British Columbia was that "they built the wrong ship for the
wrong route." There are just 26 miles between the two ports,
and there are several places along the way where the fast
ferries couldn't run at full speed; the result was that the fast
ferries saved the only about eight minutes. By contrast, from
Sitka to Juneau, "we're talking about 132 nautical miles, and to
cover that in a 16-knot vessel, you're talking 8.5 to 9 hours,
depending on the tides and currents through Sergius Narrows," he
said. "A high-speed vessel traveling at least 32 knots can
cover that route in about four hours." Whereas speed was a
luxury for the BC ferry system, it is a necessity for Alaska [to
cover a route like the one between Sitka and Juneau in the
daytime], he said. He added that those in the Alaska system
have studied both British Columbia and Washington State ferries
as well as learning from experience worldwide with high-speed
craft. "The State of Alaska is just coming online; the rest of
the world has been operating fast vehicle ferries and fast
passenger-only ferries for a couple decades," he said.
Number 0316
REPRESENTATIVE OGAN asked about fuel efficiency. He noted that
fuel consumption usually increases with vessel speed, and that
fuel is a major factor in the [Marine Highway System] budget.
Number 0368
MR. RICHARDS said 70-75 percent of Marine Highway System
operating costs are labor costs, and that the fuel cost is a
small percentage of the current expense of operating the fleet.
It is true that a high-speed craft will burn more fuel per unit
time, he said, but one needs to look at operating that vessel
for eight to ten hours a day as compared with operating another
vessel for 24 hours with a huge crew on it. He said a high-
speed craft requires a crew size of about 10, whereas the
Matanuska has a crew of 45-50 and the Columbia has a crew of 65.
CAPTAIN CAPACCI explained that another advantage of a high-speed
craft and a smaller vessel is that it provides greater
operational flexibility. For example, "sailing the Matanuska
through Lynn Canal with three cars on it is not a good match for
the demand that we have," he said. The new high-speed craft are
being designed to carry 35 vehicles (one more than the 34
vehicles that the Aurora and the Le Conte carry) and 90,000
pounds of freight.
Number 0492
REPRESENTATIVE OGAN interjected, "And if we build more ferries,
we're going to do a little bit better job of change orders,
right? What is it, $40 million now they're claiming on the
Kennicott?"
Number 0506
SENATOR ELTON called it "terribly unfortunate" that some people
want to correct their business mistakes or increase their profit
line by going to court. He said he would be shocked if that
claim [from the shipyard that built the Kennicott] turns out to
be anything but specious.
SENATOR ELTON then said he thought Captain Capacci had "glanced
off the issue" as he was talking about the convenience to the
customers that will accrue with the changes that are anticipated
in the Southeast Alaska Transportation Plan. He said:
One of the things that drove this plan -- a lot more
than convenience to the customer -- is future cost and
what is going to occur with the combination of shuttle
ferries fast ferries, and mainline ferries. The
initial convenience is going to be a by-product of the
tremendous saving in cost that will accrue. And those
cost savings will not be just to the state, but to the
many businesses that depend on the transportation
system in Southeast Alaska.
Number 0618
CAPTAIN CAPACCI explained that Marine Highway System planners
have gone through Phase 1 of the [fast-ferry] procurement
process, evaluating five shipyard build-design packages, and
have narrowed the field to two finalists that are in the
competitive range. Those finalists are meeting the owner's
requirement substantively, are going to meet with the Marine
Highway System design team to further discuss those
requirements, and will be asked to prepare price proposals
within the next few months. The second stage of the procurement
process will be based on lowest price for a competitive design
that meets the system's demands, he said.
CAPTAIN CAPACCI then said that the first high-speed vessel is
being designed for the Sitka-Juneau run, which it can make in a
day. That will provide the advantage of "turning the ship off
at night, having a very skeleton night crew come aboard for
security and maintenance," rather than having a ship running 24
hours a day. "We realize some significant savings in our
operating costs that way," he said. Revenue and traffic models
predict that if there were more regular service to different
ports, traffic would grow and generate more revenue.
CAPTAIN CAPACCI then pointed out that "one ship does not a
system make." In order to have a true system, he said the
Marine Highway System would need another vessel running from
Ketchikan north to Wrangell and South Mitkof Island, and another
vessel of similar speed running from Juneau south to Petersburg
(with a minor road connection across Mitkof Island). Those
three vessels would be the bare essentials for an improved
Southeast Transportation system, he said.
CAPTAIN CAPACCI said there also is potential for using a high-
speed ferry in Prince William Sound, connecting Cordova, Valdez,
and Whittier in a daytime operation to achieve a significant
saving in crew costs there.
Number 0829
CAPTAIN CAPACCI then turned to the Alaska Marine Highway
System's economic picture, saying that committee members should
have received the annual financial report earlier in the day.
The report for fiscal year 2000 shows an operating cost of
approximately $75 million. The system generated about $40
million in revenues, and the state general fund appropriation
was for about $27 million. That left the Marine Highway System
with a shortfall of about $8 million, which along with some
additional expenses for pay increases, fuel, and health-and-
benefits packages for employees was absorbed by the Marine
Highway Fund. "That fund is rapidly being eroded, and the cover
of this book is not yellow by accident," he said. "It's
Condition Yellow right now, and the cover for next year is
probably going to be red because we envision by the end of 2002
or beginning of '03 our Marine Highway Fund will be depleted
with the increased operating costs." That is why it is
imperative that we move to a Southeast Transportation Plan that
makes some significant cost savings in addition to meeting the
demands of the system's customers, both Alaska residents and
visitors to the state, he said.
CAPTAIN CAPACCI continued, explaining, "That's one part of the
equation." The other part is to increase revenues. The Marine
Highway System took the initiative to undertake a marketing and
pricing study, completed in September, that Commissioner Perkins
forwarded to committee staff. That was the first comprehensive
review that the system has done in many years. It pointed out
that the market is strong, with demand for travel to Alaska and
demand from the local residents for convenient travel. He said
the system needs to take advantage of the "seven-to-one ratio"
and make enough money from summertime visitors to provide for a
year-round system that serves the cultural, social, and economic
needs of the residents of Alaska.
CAPTAIN CAPACCI said one of the things the marketing and pricing
study pointed out was that of the "top ten" places visited by
the Marine Highway System's summer passengers, the number one
destination was Juneau and number two was Anchorage. Five of
the passengers' "top ten" destinations were not in Southeast
Alaska. "So this is Alaska's Marine Highway System, because we
do not just serves Southeast Alaska, but the entire state,
traveling through and bringing some significant economic impact
to the rest of the state," he emphasized. "We need to get that
message out." The marketing and pricing survey recommended
hiring a marketing manager so that while the system is cutting
costs, it also is trying to increase revenues. There is a lot
of unused capacity on ships, he noted.
Number 1012
REPRESENTATIVE OGAN asked if the Kennicott is running across the
Gulf of Alaska regularly in the summer.
Number 1039
CAPTAIN CAPACCI replied, "Yes, sir, she is. In fact, we
envision another trip in May this year, one more trip this year
than last year. She's specifically designed for open ocean,
rides very comfortably at sea with fin stabilizers, and she's a
significantly solid vessel. That's where she should be running,
and I'd like to move that way and operate the Kennicott more
across [the] Gulf." With just incremental changes in the
schedule, that would be possible, he said.
Number 1061
REPRESENTATIVE OGAN asked if the sailings were pretty full of
tourists, and asked if that is being marketed.
CAPTAIN CAPACCI said that in the summer, the ship is carrying
close to capacity, and that the system is "actively marketing
that now."
Number 1084
CAPTAIN CAPACCI noted that the marketing and pricing study had
showed that customers had a great deal of trouble making
reservations. Since then, he said, "significant improvements"
have been made in the telephone reservation system, including a
message system that tells customers how long they have to wait
for service on the toll-free number and reducing waiting times
to 5-6 minutes, which he characterized as "a significant
reduction." In addition, use of the Internet for reservation
information is growing by leaps and bounds, and they are now
pursuing using credit cards to actually make reservations over
the Internet. He said they hope to have that in place by the
end of summer.
Number 1164
CAPTAIN CAPACCI concluded by saying that the Marine Highway
System can never pay for itself: "It never has, it never will."
But he considers it prudent to try to close the fiscal gap
between expenditures and revenues. In addition to reducing
expenses, he now is focusing on using marketing to fill the
system's unused capacity. Public marine transportation is
critical to the residents of Alaska, he emphasized. "We need
this system to get around."
Number 1234
REPRESENTATIVE OGAN asked about Captain Capacci's earlier
reference to a small road connection to Petersburg.
CAPTAIN CAPACCI explained that it involves a short connection
between the existing Petersburg road system and the south end of
Mitkof Island.
REPRESENTATIVE OGAN asked if the [National Forest] roadless
policy declared by the outgoing President of the United States
would preclude doing that.
CAPTAIN CAPACCI said it would not, because there already is a
road in place.
ADJOURNMENT
Number 1246
CO-CHAIR COWDERY adjourned the joint meeting of the House
Transportation Standing Committee and the Senate Transportation
Standing Committee at 3:30 p.m.
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