Legislature(2001 - 2002)
03/13/2001 01:33 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
SENATE TRANSPORTATION COMMITTEE
March 13, 2001
1:33 p.m.
MEMBERS PRESENT
Senator John Cowdery, Chair
Senator Jerry Ward, Vice Chair
Senator Robin Taylor
Senator Gary Wilken
Senator Kim Elton
MEMBERS ABSENT
All Members Present
COMMITTEE CALENDAR
SENATE BILL NO. 59
"An Act relating to awards of federal funds to municipalities for
road projects; and providing for an effective date."
MOVED SB 59 OUT OF COMMITTEE
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 119
"An Act naming the William R. Wood Fairbanks International Airport;
and providing for an effective date."
MOVED SSSB 119 OUT OF COMMITTEE
SENATE BILL NO. 83
"An Act relating to construction of highways by the Department of
Transportation and Public Facilities."
MOVED SB 83 OUT OF COMMITTEE
SENATE BILL NO. 100
"An Act relating to the regulation of aeronautics and
communications and to civil liability relating to aircraft runways,
airfields, and landing areas."
MOVED CSSB 100(TRA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
SB 59 - See Transportation minutes dated 2/20/01.
SB 83 - No previous Senate action.
SB 100 - No previous Senate action.
SB 119 - No previous Senate action.
WITNESS REGISTER
Mr. Kurt Parkan
Deputy Commissioner
Department of Transportation &
Public Facilities
3132 Channel Dr.
Juneau, AK 99801-7898
POSITION STATEMENT: Supports SB 119. Opposed to SB 83.
Ms. Mary Jackson
Aide to Senator Torgerson
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Answered questions about SB 59.
Mr. Tom Brigham
Division of Statewide Planning
Department of Transportation &
Public Facilities
3132 Channel Dr.
Juneau, AK 99801-7898
POSITION STATEMENT: Answered questions about SB 59.
Mr. Mark O'Brien
Chief Contracts Officer
Department of Transportation &
Public Facilities
3132 Channel Dr.
Juneau, AK 99801-7898
POSITION STATEMENT: Answered questions about SB 59.
Mr. Bob Poe
Alaska Energy Authority
No address available
POSITION STATEMENT: Explained AEA's method of using force
accounts.
Mr. Nick Tucker
Emmonak, AK
POSITION STATEMENT: Opposed to SB 83.
Mr. Walton Smith
City Manager
St. Mary's, AK
POSITION STATEMENT: Opposed to SB 83.
Mr. Roger Smith
No address provided
POSITION STATEMENT: Opposed to SB 83.
Jerry Drake
Bethel City Council
Bethel, AK
POSITION STATEMENT: Opposed to SB 83.
Steve Weaver
Alaska Native Tribal Consortium
No address provided
POSITION STATEMENT: Opposed to SB 83.
Senator Rick Halford
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SB 100.
Juli Lucky
Staff to Senator Halford
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Answered questions about CSSB 100(TRA).
ACTION NARRATIVE
TAPE 01-8, SIDE A
Number 001
CHAIRMAN JOHN COWDERY called the Senate Transportation Committee
meeting to order at 1:33 p.m. Present were Senators Taylor,
Wilken, Elton and Chairman Cowdery. The first order of business to
come before the committee was SB 119.
SB 119-WILLIAM R. WOOD FAIRBANKS INTL AIRPORT
SENATOR GARY WILKEN, sponsor of SB 119, explained that the purpose
of SB 119 is to acknowledge the Legislature's gratitude to William
R. Wood by naming the Fairbanks airport after him. Mr. Wood died
about two weeks ago at the age of 94, after over 41 years of
service to Alaska. Mr. Wood's accomplishments were many. He was
the president of the University of Alaska from 1960 to 1973, during
a period of expansion. He retired and became President Emeritus in
1975. He was elected mayor of the City of Fairbanks in 1978 and
founded the Fairbanks Industrial Development Corporation, which is
a mechanism to promote the development of Fairbanks and Interior
Alaska. He was the first chairman of the Fairbanks Area Community
Hospital Foundation, the founder and executive director of Festival
Fairbanks for 20 years, a creator of and visionary for the Golden
Heart Plaza, and a columnist for the Fairbanks Daily News Miner for
20 years. In 1985, Mr. Wood was elected Alaskan of the Year. In
1985-86, he was Rotary District 5010 Governor, which encompasses
all of Alaska, the Yukon, and the eastern half of the country
formerly known as Russia. He established the Wood-Nanook Varsity
Talent Search and Grant Endowment at the University. In the year
2000, he was awarded the Service Above Self Award, the Rotary
International's highest award for an individual. He also authored
three books of poetry.
SENATOR WILKEN read the following paragraphs from an editorial
dated March 4, 2001 in the Fairbanks Daily News Miner about Mr.
Wood.
In a 1983 Daily News Miner article, Dr. Wood was quoted
as saying he would want to be remembered 'as an
individual who left the place a little better than he
found it.'
Add to that philosophy his penchant for progressive ideas
and you have a remarkable man of vision. He forwarded so
many ideas that sometimes those around him - people one
would suppose have had younger and fresher minds - had a
hard time keeping up.
Predictably, such a man could not accomplish so much with
everyone liking every idea. He was criticized for his
support of Project Chariot, a government plan born in the
late 1950s in search of the `peaceful use of the atom.'
This idea would have used an atomic blast to create a
port off Alaska's northwest coast. The thought sounds
ludicrous in this new millennium, but in its day it was
an example of the vision exercised by progressive
thinkers.
Some still exercise their powers of hindsight to
criticize. Our newspaper says thank God that Dr. Wood
exercised his considerable powers of forethought to touch
this earth far beyond the scope of immortality.
His community service mirrored his university career in
many ways. He came along to build and to keep us looking
forward. What is even more remarkable about his
community work is his inestimable hours spent day after
day, year after year, for no recompense but to satisfy
his want to make things 'a little better.'
For decades to come, Fairbanks will see the mark of Dr.
Wood, a Midwest farm boy, the sailor, the scholar, the
husband, the father, the teacher, the university
president, the mayor, the statesman, the grandpa who
chose to make Fairbanks home.
SENATOR WILKEN noted that at the March 3 funeral service for Dr.
Wood, a letter from Senator Stevens was read that acknowledged Dr.
Wood's contributions. Senator Wilken stated, "A community builds a
new airport every hundred years. Our good Lord makes a Bill Wood
every hundred years. This is perfectly appropriate for the people
that come and go from the City of Fairbanks to be reminded on a
daily basis the value of volunteerism, the value of vision that was
set forth by Dr. Wood."
MR. KURT PARKAN, Deputy Commissioner of the Department of
Transportation and Public Facilities (DOTPF), said DOTPF and the
Administration support SB 119. He pointed out that Dr. Wood was a
very diligent charter member of the Airport Community Council in
Fairbanks. DOTPF does not believe this bill will have any fiscal
impact as signage will be taken care of in DOTPF's existing budget.
SENATOR TAYLOR moved SB 119 from committee with individual
recommendations and then objected to his motion for the purpose of
discussion.
SENATOR TAYLOR said he received correspondence this week from about
six or seven people in the Fairbanks area; two or three support SB
119 and two or three oppose it. He wondered whether any community
resolve is forthcoming, perhaps from the City of Fairbanks or the
Fairbanks North Star Borough. He acknowledged that SB 119 has a
long way to go in the process and said he would follow the lead of
the Fairbanks' delegation on this matter.
CHAIRMAN COWDERY noted a [sponsor] substitute to SB 119 was before
the committee.
SENATOR WILKEN informed the committee that next Thursday a
resolution to rename the Fairbanks' airport will be before the
Fairbanks Northstar Borough Assembly. He expects the resolution to
receive overwhelming support but he noted some concern has been
expressed that the airport should be named after someone from the
aviation community. He said he appreciates Senator Taylor's
comment but he has not found anyone in the aviation community who
has given what Bill Wood has given to the community and the state.
He informed those who expressed concern about SB 119 that he is
open to suggestions, but whomever they suggest would have to have
reached the level of participation that Bill Wood did.
SENATOR TAYLOR moved SSSB 119 from committee with individual
recommendations to the next committee of referral.
CHAIRMAN COWDERY announced that hearing no objections, the motion
carried.
SB 59-FEDERAL FUNDS TO MUNICIPALITIES FOR ROADS
CHAIRMAN COWDERY announced that SB 59 was heard by the committee at
a previous hearing but was held while the committee awaited
information on the bill. He asked Mary Jackson to testify on the
measure.
MARY JACKSON, legislative aide to Senator Torgerson, sponsor of SB
59, said at the last hearing a question was posed about the
indirect cost allocation plan. She submitted information to that
committee on that question from a similar project in Homer. In
addition, she submitted a letter in support of SB 59 from the
Alaska Municipal League. She offered to answer questions.
There being no questions or further testimony, SENATOR TAYLOR moved
SB 59 from committee with individual recommendations.
SENATOR ELTON objected and noted that one concern about SB 59
expressed at the last hearing was that the amount of money
available is like a balloon in that if it is squeezed in one area,
it expands elsewhere. He asked what component of transportation
dollars this money will come from.
MR. TOM BRIGHAM, Statewide Planning Director, DOTPF, explained that
the funds would come from a part of the program called the
community transportation program. That program funds state-owned
and local-owned community roads.
SENATOR ELTON asked if that is the component DOTPF uses to work
with communities to identify local projects that will be
transferred to those communities after the state has funded the
projects.
MR. BRIGHAM answered that applies to a portion of the program: to
projects that were locally owned prior to the improvement project
that came along to the tune of about $50 million in 1999 and $45
million in 2000. That component also covers state-owned roads that
are transferred to local communities for ownership and maintenance
once the improvement project is done.
SENATOR ELTON asked whether this bill could affect DOTPF's ability
to reduce future expenses on those roads that would otherwise be
turned over to local communities and reduce DOTPF's ability to
accomplish road maintenance projects on the locally-owned roads.
MR. BRIGHAM said it could have some of those effects. The
discussion at the last hearing on SB 59 was to the point in terms
of which communities actually have the capability of managing a
federal project. Federal funding is not like a state grant for a
road project, which is much simpler. You only get a promise of
money if the project is done correctly. He thought the point at
the last meeting was that it is the large communities with
engineering capabilities that would tend to be eligible for most of
this money.
SENATOR ELTON removed his objection.
There being no further objections, CHAIRMAN COWDERY announced that
SB 59 had moved from committee.
Number 1139
SB 83-CONSTRUCTION OF HIGHWAYS BY DOTPF
CHAIRMAN COWDERY, sponsor of SB 83, explained that force accounts
are part of the state budget system. No limit has ever been placed
on the amount that can be spent using a force account. SB 83
limits force account spending, after hearings have taken place and
a finding of fact has been established, to $250,000. He sponsored
this bill because many people have expressed concern that the force
account system might be abused and that projects that cost more
than $250,000 should be let for competitive bid.
MR. KURT PARKAN, Deputy Commissioner of DOTPF, said DOTPF does not
support SB 83. DOTPF believes that force accounts provide an
opportunity to take care of problems and projects in the state that
are suited for that type of construction. Force account work
amounts to 3 or 4 percent of DOTPF's total program budget: of that
3 or 4 percent, about 50 percent goes to private firms. DOTPF sees
force accounts as one tool in its toolbox. DOTPF prefers to
maintain flexibility to use that mechanism in the future and a cap
of $250,000 will restrict DOTPF's abilities.
CHAIRMAN COWDERY asked Mr. Parkan how DOTPF would interpret the
word "highways" in the title of the bill.
MR. PARKAN said DOTPF would interpret that to apply to projects
that are funded through the Federal Highway Administration (FHA)
and subject to FHA requirements.
CHAIRMAN COWDERY asked if a gravel road would fall under SB 83.
MR. PARKAN said in his view gravel roads would fit within SB 83.
He noted AS 19.45.001 contains a definition for "highway" that
reads:
(9) "highway" includes a highway (whether included in
primary or secondary systems), road, street, trail, walk,
bridge, tunnel, drainage structure and other similar or
related structure or facility, and right-of-way thereof,
and further includes a ferry system, whether operated
solely inside the state or to connect with a Canadian
highway, and any such related facility;
CHAIRMAN COWDERY said he was aware of the statutory definition but
wanted to make sure it was understood that the word "highway"
includes just about everything.
SENATOR WARD asked what cap would be appropriate.
MR. PARKAN said that no cap would be appropriate.
SENATOR WARD asked if $2 billion would be appropriate.
MR. PARKAN stated that DOTPF prefers the statute as written.
SENATOR WARD said with no restriction, a project could be estimated
in the billions.
MR. PARKAN repeated that DOTPF's history of force account use shows
the amount has been 3 to 4 percent of DOTPF's total program budget.
DOTPF does not spend a lot of money using force accounts and he
does not anticipate that it will.
SENATOR WARD asked how much 3 or 4 percent equals.
MR. PARKAN said DOTPF's program equals about $400 million so 4
percent would amount to about $16 million.
SENATOR WARD asked if DOTPF would like the amount in SB 83 to be
changed to $16 million.
MR. PARKAN stated that DOTPF does not want any cap.
SENATOR WARD asked, if the Chairman wants a number in the bill,
whether $16 million is the most that DOTPF would use.
MR. PARKAN said the largest project DOTPF has done using force
accounting has cost about $4 million.
SENATOR WARD asked Mr. Parkan whether $4 million or $16 million is
acceptable, if a cap is put in.
MR. PARKAN said he is not willing to get into hypotheticals.
SENATOR WARD commented that $4 million is the real number and $16
million is hypothetical.
Number 1599
SENATOR ELTON asked Mr. Parkan to review a list of the
opportunities that force accounting provides to DOTPF.
MR. PARKAN said a couple come to mind. In rural Alaska, where
village safe water projects are constructed by the Department of
Environmental Conservation (DEC), a portion of a project may be
suited for some federal funding to, for example, improve a
boardwalk or a road. DOTPF would give DEC a portion of the money
to take advantage of combining the two projects. A second example
would be when DOTPF uses its own staff to do deferred maintenance
work in the summer. Over the last several years, DOTPF has
increased its use of federal funds for minor maintenance projects.
SENATOR ELTON indicated that he has seen opportunities using this
kind of an approach to train local workers so that some of the
dollars stay in the rural community.
MR. PARKAN agreed that DOTPF is doing some training with a federal
grant, which allows for local hire.
Number 1599
SENATOR ELTON pointed out that none of the opportunities listed by
DOTPF have a connection to a dollar amount, be they local job
opportunities, job training, or deferred maintenance.
CHAIRMAN COWDERY asked what the low and high limits are for
projects that went out to competitive bid in rural Alaska. He
asked whether DOTPF competitively bids $1 million projects.
MR. PARKAN replied that projects that cost over $100,000 generally
go out to competitive bid.
CHAIRMAN COWDERY explained that he introduced this bill because
almost everyone involved in construction supports some limit. He
said he understands the St. Mary's project will cost $3.5 million
for 7 or 8 miles of road.
MR. PARKAN said the St. Mary's project cost a little over $3
million for 5 miles of road.
CHAIRMAN COWDERY said he was told that money was spent to hire
people in the community because they had a bad fishing season. He
wondered who will fish this year if everyone is working on the
road.
MR. PARKAN stated that fishing jobs are not DOTPF's responsibility
so he cannot answer that question. He does know that there is an
interest in construction jobs by rural Alaskans throughout the
state. The St. Mary's project will hire local Alaskans; about
$900,000 of that project will be spent on local hire.
CHAIRMAN COWDERY asked if the road workers will be paid Davis Bacon
wages, as they would if paid by private contractors.
MR. PARKAN replied they will be state employees and hired as Local
71 employees.
CHAIRMAN COWDERY said, as a former contractor who did several
million dollars worth of work in rural Alaska, he always looked to
hire local people. However, private contractors are always stuck
with paying Davis Bacon wages. He asked if DOTPF does not think
local workers are worth Davis Bacon wages and why those workers
will be made state employees.
MR. PARKAN said the local workers will be temporary employees.
SENATOR TAYLOR asked Mr. Parkan to address the question about Davis
Bacon wages.
MR. PARKAN said they will be hired at the state employee wage rate,
which is less than the Davis Bacon wage. He noted that most of
these projects are in rural Alaska and are contracted out and
subject to Davis Bacon wages so there are plenty of opportunities
for people to earn Davis Bacon wages. The DOTPF jobs provide an
opportunity for local hire and training. He estimated about 17
people will be hired for the St. Mary's job. He repeated that
force accounts are just one of many tools used by DOTPF and he does
not believe it is overused.
CHAIRMAN COWDERY asked what the cost of the project would be if
Davis Bacon wages are paid for this project.
MR. PARKAN said the cost of all state workers will be approximately
$34,000 per week while the cost for contracted workers will be
about $58,000.
SENATOR WILKEN commented that he appreciates the need for force
accounting but he has two concerns. He is concerned about the
growth of force accounting. From 1998 to 2000, not including the
St. Mary's project, DOTPF has increased the use of force accounting
by 50 percent. If this legislation is a reaction to what the
legislature sees as a dangerous trend, in some respect SB 83 is a
defense to limiting that growth while recognizing the need for
local participation for a follow up or a small concurrent project.
Second, Fairbanks' contractors complained to him that the St.
Mary's project was ready to go out to bid when someone stepped in
and pulled the $3 million off the table. The project is now going
to be done with state money and state workers. SB 83 is a reaction
to that type of activity.
SENATOR WILKEN referred to a letter he received from the
Association of General Contractors (AGC) that speaks to the
economic upheaval in the communities hardest hit by the crash in
the fishing industry. He said he understands and appreciates that
problem and that the state has thrown hundreds of millions of
dollars to those communities to help them recover from that crash.
At the same time, DOTPF is going to take money from the Fairbanks
contractors and train people to get their commercial drivers'
licenses to get through the summer. He questioned the logic
because those people will be fishing next summer. He felt that SB
83 is the Legislature's attempt to say, "No more St. Mary's." He
pointed out there was another group of force accounting projects
that all cost around $230,000. He suggested that may be where the
sponsor got the number.
SENATOR WILKEN questioned whether the existing force accounting
system is in the best interest of Alaskans and whether it is fair
to private industry that is battling for these projects and has
every right to expect an opportunity to bid on the projects. He
stated that he supports SB 83 although he does not know what the
cap should be set out. He thought Senator Ward was asking for
DOTPF's help to get that number.
MR. PARKAN responded that the total program has grown considerably
over the last several years so the total dollars going to force
accounts will continue to increase, but the total percent is
holding steady. Another component of that growth is that DOTPF has
been spending more money on deferred maintenance for highways.
Regarding the discussion about training people to get CDLs, DOTPF
sees that as an opportunity to develop a regionally-based
workforce. Hopefully, those workers will be able to go to another
project. Contractors will be able to hire local people and not pay
moving costs. Mr. Parkan said he appreciates the sponsor's
sensitivity to the St. Mary's project but at this time, he is in no
position to discuss caps or limits.
SENATOR WILKEN pointed out that DOTPF has gone directly to federal
agencies on its own and asked whether it can use federal monies for
preventive maintenance and repairs. The state could not do that
before, now it can. His contractors feel that force accounting is
okay to patch a few miles of highway but not to rebuild ten miles
of highway. That is the balance that needs to be reached with the
force account issue.
CHAIRMAN COWDERY asked how much money will be spent on training.
MR. MARK O'BRIEN, Chief Contracts Officer for DOTPF, told the
committee that about $20,000 has been expended to date for CDL
training in St. Mary's.
CHAIRMAN COWDERY asked if that will be the total cost for the
training.
MR. O'BRIEN said that will be strictly for the CDL training, which
is the first phase of the training. Training for other types of
heavy equipment will be given.
Number 2207
CHAIRMAN COWDERY said he didn't have a problem with DOTPF using
force accounting if it has put a project out and no one bid on it,
but when the private sector is interested, the project should go to
bid. He asked if any DOTPF has put any requests for proposals out
in rural Alaska for projects over $250,000 that have received no
interest from the private sector.
MR. PARKAN said DOTPF gets several responses to every offering. He
said, "A lot of people are working out there and yet we still have
capacity for more jobs, more projects."
CHAIRMAN COWDERY said when the St. Mary's project first surfaced,
there was also talk of doing a similar project in Emmonak. He
asked why the Emmonak project was dropped.
MR. PARKAN said his understanding is that the Emmonak project was
an airport project and that force accounting would not be suitable
for it.
CHAIRMAN COWDERY asked what the value of that project would have
been.
MR. PARKAN said it was under $10 million.
SENATOR WILKEN clarified that Mr. Parkan was correct. According to
DOTPF's budget, force accounting has increased 50 percent from 1998
through 2000 while DOTPF's total budget has increased 46 percent.
SENATOR ELTON encouraged committee members to consider that
training people in a local community to do other jobs does not
necessarily displace them from the fishing industry. The fishing
industry lasts several weeks at the most in many of these areas and
a lot of the skills those people learn through this kind of a
process can be used to keep an airport open in the winter. Senator
Elton noted that there is a lot of enthusiasm about the fortunate
placement of Congressman Young as Chairman of the House
Transportation Committee and Senator Stevens on the Appropriations
Committee and the dollars coming to Alaska through the Denali
Commission. He asked Mr. Parkan how much growth may occur in the
force accounting component of DOTPF's budget and whether that is
because it only works for certain projects.
Tape 01-8, Side B
MR. PARKAN said DOTPF expects to maintain the same level of about 3
to 4 percent in the future as the program grows. DOTPF will be
limited by its own staff constraints.
CHAIRMAN COWDERY asked if the project specifications would be the
same using a force account or a competitive bid.
MR. O'BRIEN said they would be the same. DOTPF's construction
manager will manage those projects using the same requirements as a
private sector contractor.
CHAIRMAN COWDERY asked if there is an adequate amount of aggregate
in St. Mary's.
MR. O'BRIEN said he believes there is.
CHAIRMAN COWDERY asked if the equipment to be used in St. Mary's is
in place.
MR. O'BRIEN said it is; the City of St. Mary's is in the process of
acquiring sufficient equipment to handle this project.
SENATOR TAYLOR said he is torn on this legislation because the
Davis Bacon legislation was a policy call orchestrated by special
interest groups to make sure they got paid the highest and best
wages they could for doing state projects. He said,
Now it appears that some of those folks have given a buy
or a pass to this Administration that on some smaller
projects in some areas where he wants to seek political
favor they can go out and they can do other things. It's
interesting. I don't see or sense any of those things
going on in my district. Apparently, we're not favored
with wanting to assist local employment in an area
devastated by the loss of the timber industry but if
somebody has a bad fishing run up north, all of a sudden
we thrown out all the laws and we can just change
everything and every one of our friends and special
interest groups will go along with us to do this.
I haven't heard a single thing come out of this
Administration yet from your discussion and I'd
appreciate it if I'm wrong in my interpretation but is
appears to be social engineering with a tremendous
political bent thrown in and all of it trying to be
justified on, well, we're going to get local employment
out of this process.
I haven't heard anything yet that says anything
different. You're still going to spend the same amount
of money, there's no saving there. You're still going to
build the same road, according to exactly the same specs,
but we throw out all of these processes of everything
from Davis Bacon to lowest bid. It reminds me a great of
what Bill Sheffield attempted to do with Lennie
Arsenault. You know, you've got a building for sale or
rent and, what the heck, Lennie, I'll just a deal with
you. I don't have to go through the state procurement
code and I don't have to abide by any of these rules.
I'll just do it because it's a nice thing for me to do to
help out the plumbers' union in Fairbanks. He almost got
indicted over that. I'm trying to understand where we
draw the line at any given point. Do you have to have a
bad fish run before this Administration will show up in
your community and help you out? Or do you just have to
have a road project and be somebody that they'd want to
favor?
Maybe I'm missing something here, Mr. Chairman, but I'm
having a hard time understanding it. Coming from small
communities, where we get damn little in the way of
capital projects and we have to beg DOT to ever come down
there and even resurface a road, it kind of surprises me
that they're falling all over themselves to help somebody
else up north to make sure local folks get hired.
They've never once done that with us. They never offered
to come to Wrangell and put everybody on the payroll down
there and take care of everybody in town and train them
how to operate things, let the city go buy brand new
equipment - because that's what's happening here.
Apparently the city's going to buy the equipment based on
this contract. What happens when the job's over. Does
the state own that equipment or does St. Mary's?
MR. PARKAN answered that St. Mary's owns the equipment. He
explained that, according to statute, projects that are contracted
out are subject to Davis Bacon wages. The cost of the St. Mary's
project was estimated to be 15 percent higher if it was contracted
out. DOTPF has done a force account project in Ketchikan on the
Married Man trail.
CHAIRMAN COWDERY pointed out the committee was provided with a book
about DOTPF projects that used force accounts in the past.
Number 2148
SENATOR WARD said the Governor did not want to declare the Kenai
area a disaster area when it had a disastrous fishing season, even
though the North Road is falling apart. He asked if there is
anyway to get a force account to get that road fixed.
MR. PARKAN said DOTPF is taking care of a lot of the needs in Kenai
with its programs.
SENATOR WARD said certainly not on the North Road, which has 487
potholes as of this morning.
MR. PARKAN pointed out that the state's road needs far exceed
DOTPF's ability to meet those needs.
SENATOR WARD said maybe force accounting is part of the problem.
SENATOR ELTON commented that the force accounting procedure that
has been used is not illegal - the statute gives DOTPF a great deal
of latitude in its use. He noted that if force accounting allows
DOTPF to spend less on a project, that may enable DOTPF to fix
those potholes in Kenai a little bit faster.
CHAIRMAN COWDERY said, with that thought, we could eliminate
competitive bidding and do all projects with state equipment.
SENATOR TAYLOR asked, even if force accounting were illegal, where
he would find anyone to enforce it in this Administration.
CHAIRMAN COWDERY said Senator Elton is correct in saying that DOTPF
has acted legally according to statute, but the purpose of SB 83 is
to put a limit in statute. Some people believe that the force
account system is being abused. He then took public testimony.
Number 2020
MR. BOB POE, Executive Director of the Alaska Energy Authority
(AEA), said he wanted to speak to the suggestion to extend the
concept of a cap on force account projects to other parts of the
Executive Branch.
MR. POE said three issues are at the heart of force accounting: the
economic impact of the project on the community; the overall cost
of the project; and sustainability - how do we make sure the
community has the ownership and the knowledge about the project to
help it reach its economic life. The force account system has been
the most effective approach AEA has to maximize local hire. It
leaves a lot more of the economic benefit in the community than
just the project. It provides the community members an opportunity
to earn money and to get skills. It also gives the community a
greater sense of pride and community ownership in the project.
MR. POE explained that AEA is using a slightly different model for
its force accounts. AEA recently awarded six contracts to
construction managers. It is in the process of reviewing proposals
for design and construction. The proposals were solicited through
competitive bid and contractors will use the private sector to do a
lot of things related to the projects. In the construction
management contracts, AEA also asked that the contractors submit
proposals for improving training, perhaps on a regional basis, to
develop skills in those communities. As an example, Houston
Contractors has a very real need to hire rural employees to work on
the pipeline. They are losing Native employees through attrition
or retirement. Houston is very interested in developing skills
among rural Alaskans and attracting those people to work on the
pipeline. Houston has partnered with the AFL-CIO to develop
training programs for electricians, welders, pipe fitters, plumbers
sandblasters, painters and heavy equipment operators, using
apprenticeship wages. AEA tries to use force accounts to leave
benefits in communities and to use the private sector to leverage
AEA's ability to not add a lot of state employees. AEA contracts
with each city; those employees working on a force account actually
work for the city. Using a force account typically does result in
a lower wage scale and reduces transportation and out-of-town
housing costs. Using a construction management approach has
lowered AEA's costs because of onsite quality control. The
construction managers find a foreman who then works for the city.
The design costs are lower since a complete bid package is done.
Greater consistency among projects occurs because parts and
equipment can be standardized. He said that AEA would argue that
there are real benefits to force accounts and AEA is using a model
that makes sense for both the private sector and communities.
Number 1813
CHAIRMAN COWDERY asked Mr. Poe if AEA requires any bonding.
MR. POE said he did not know the answer but he is sure that bonding
is required on the construction management contracts as part of a
normal state contract.
SENATOR WARD asked if AEA has created any state employees to do any
of the work.
MR. POE said it has not.
MR. NICK TUCKER, a resident from Emmonak representing himself, said
he is opposed to limiting any funds that will stop rural Alaska
from moving into the mainstream of the 21st Century and help
economic development and the education that rural children are
getting now. Local hire and training help the young people of
Emmonak. He is concerned that creating two classes of people,
urban and rural, with only urban citizens being qualified to work,
will be very dangerous. He is a commercial fisherman who was
extremely hurt by the two fishing disasters. He was a member of
the Raven Commission under Governor Hickel. The Emmonak region has
one of the lowest per capita incomes in the state and country. It
has no timber or major industries, only a very small scale fishery.
When that fishery is hurt, people are hurt. The opportunity for
any level of training and education is very important to the people
in the villages.
CHAIRMAN COWDERY commented that the way that DOTPF is managing
force accounts is creating a rural-urban divide because contractors
from rural Alaska could bid on such a project. The fact that the
urban contractors do not have the opportunity to bid these projects
creates a divide.
MR. TUCKER said he is awed at how creative Alaska Natives are.
They need to have the same opportunities as urban people. He noted
people in the village are very thankful to have year round jobs to
put food on the table.
CHAIRMAN COWDERY said he did a bank erosion project in Kotlik. He
hired eight urban people and about 30 local people for that project
because it was cheaper. He hired the eight urban people because he
needed qualified people to meet certification requirements.
MR. TUCKER asked the committee to keep in mind that putting any
limit on force accounts will inhibit the growth of rural
communities while the state is working very hard to get people off
of welfare.
MR. WALTON SMITH, city manager of St. Mary's, said in response to
the concern that training local residents will affect the fishing
industry, that there are more than 600 fish permit holders in that
area and each has a helper. Less than 5 percent of the fishers
will be put to work on the construction project and St. Mary's does
not expect to have a fish opening next summer anyway.
CHAIRMAN COWDERY pointed out that was the reason DOTPF gave for
using a force account to do the St. Mary's project.
MR. SMITH stated the Wade Hampton unorganized borough has one of
the highest unemployment rates; chronic unemployment is over 30
percent and with a poor fishing industry, it is worse. The St.
Mary's project has allowed 39 people to get CDL training. CDLs are
required and there is a special federal exemption for Alaska for
off road CDLs. This project has provided a great opportunity to
meet some requirements that were already in effect. He noted that
regarding the comment that these operators will not be paid Davis
Bacon wages, these operators, many of whom are unemployed, will
work a 60 hour work week with time and one-half for overtime, which
will equal between $1400 and $1650 per week. Contrasted with no
income, he does not feel they are being cheated by not earning
Davis Bacon wages. The City of St. Mary's has done millions of
dollars of force account work on water and sewer projects in the
last few years, including some money from DOTPF for some road work.
That allowed more pipe to be put in the ground and improved public
health than would have been possible had higher wages been paid.
Using the force account system allows "more bang for the buck."
Regarding welfare reform, the new federal law limits the amount of
time a person can stay on welfare. If no training and no jobs are
available, people will go hungry. He is concerned about comments
that using force accounts is a dangerous trend and that abuses are
occurring; he does not believe anything illegal is going on. One
condition for a best interest finding is the declaration of a
disaster, which occurred in St. Mary's several years ago and
continues in effect right now. The City of St. Mary's is not
buying brand new equipment for this project - it cannot afford to.
He said regarding the argument that force accounts take something
away from someone else, Anchorage has had one of its biggest years
ever for contractors with state highway funds. The City of St.
Mary's project represents less than 3 percent of DOTPF's budget.
He applauds the Governor and the Commissioner of DOTPF because they
have helped, with the decision to use force accounting on the St.
Mary's project, economic development and diversification, which is
what the residents of St. Mary's need. Passage of SB 83 will
create two classes of Alaskans.
CHAIRMAN COWDERY asked how many "belly dumps" the City of St.
Mary's owns.
MR. SMITH said it owns none, and it does not plan to acquire any.
St. Mary's has three 12 yard end dumps, which are not adequate, and
it will be purchasing three used off-road haulers.
CHAIRMAN COWDERY asked if St. Mary's has compactors, water trucks
and asphalt equipment.
MR. SMITH said that St. Mary's has no asphalt equipment. It has
compactors, a grader, three CATS, three end-dumps and two
excavators.
CHAIRMAN COWDERY asked if a contractor came in to do this job and
asked to lease equipment from St. Mary's, the city would be in a
position to do that.
MR. SMITH said right now that equipment is very valuable to St.
Mary's. In the past, contractors have rented equipment and
returned it in poor condition. St. Mary's is reluctant to lease
the equipment now but it will be in a better position to make
equipment available to a contractor when its fleet is larger.
CHAIRMAN COWDERY said when he rented equipment, there was a
standard for the normal wear and tear.
MR. SMITH noted the city has had people rent a truck to haul
equipment from the airport and although the truck can carry 6,000
pounds, 22,000 pounds of freight was carried in one trip.
SENATOR WARD asked Mr. Smith if the City of St. Mary's considered
hiring the employees instead of having them be state employees.
MR. SMITH said it did and advocated for that for over two years but
DOTPF felt that because it would be directly responsible for the
money and directly responsible to the Federal Highway
Administration (FHA), city hire would not be appropriate. The city
has hired an engineer to provide supervision over qualified
superintendents who will run the job and train workers.
SENATOR WARD asked Mr. Smith if DOTPF told him the city could not
hire city employees and if that was because the cost would be
different.
MR. SMITH said DOTPF felt, because of the FHA objections that the
money might not be appropriately used, that this mechanism would
best meet the needs of the City of St. Mary's and FHA requirements.
SENATOR WARD said he does not believe that is an FHA requirement.
He then asked how many of the 39 people who have been trained in
St. Mary's are from Anchorage.
MR. SMITH said as far as he knows, none.
SENATOR WARD asked where they are from.
MR. SMITH said as far upriver as Russian Mission and as far
downriver as Kotlik.
Number 749
SENATOR WILKEN asked how much the three 17 yard off road haulers
are worth.
MR. SMITH said by the time they are delivered to St. Mary's they
will cost under $140,000 each. They are used pieces of equipment.
SENATOR WILKEN asked if that is part of the $3 million contract.
MR. SMITH said it is not. The city is getting a rate that is close
to Blue Book. In the last five years, the city has exported gross
sales of over $500,000 in gravel. The city anticipates additional
contracts and believes the additional work it does on gravel will
pay for the equipment in a couple of years.
SENATOR WILKEN asked if the city is using city, not state, funds to
purchase the equipment.
MR. SMITH said that is correct.
SENATOR WILKEN asked if that equipment will be used as the city
sees fit to make money.
MR. SMITH said that is correct and it is being viewed as an
economic development project as it will help replace aging
equipment. He noted the city has sold over 30,000 tons of crushed
rock in the last three years.
CHAIRMAN COWDERY asked if the 5 to 8 miles of road that will be
built will be a state road and whether the city's off road vehicles
will be legal to haul on it.
MR. SMITH said as far as he knows, there should be no problem. His
only concern has to do with coatings.
CHAIRMAN COWDERY asked if Mr. Smith thinks the state will waive the
regulations to allow the city's vehicles to use the road regardless
of weight.
MR. SMITH said the state has done so for private contractors for
years.
CHAIRMAN COWDERY pointed out they haven't had a road.
MR. SMITH explained that the road has been there since 1993 -this
project will rehabilitate the road.
SENATOR TAYLOR asked if the road will be paved.
MR. SMITH said they have had some discussion about high float and
oil emulsion that is known as "a poor man's paving." Once that is
done, track vehicles will not be allowed on the road and they will
have to transport with a low boy.
SENATOR TAYLOR asked what amount of return the city anticipates
receiving off of this contract for use of the three 17 yard Volvos
it is purchasing.
MR. SMITH said, as with a contractor, it depends on how many hours
the equipment is down, how many flat tires they have, and how fast
his mechanic is.
SENATOR TAYLOR said at best it will be 50 percent, at worst maybe
25 percent. His engineer thinks the state has underestimated the
length of time the project will take.
SENATOR TAYLOR asked if, when the city went to its banker, it
contemplated a certain amount of return on this equipment from this
job.
MR. SMITH said his bank anticipates that the city should be able to
net around $150,000 per year over the next ten years.
SENATOR TAYLOR asked if a major portion of the cost of the
equipment will be amortized back to the city off of both gravel
sales and this project.
MR. SMITH said that is true and that is why it is an economic
development project. Right now the city has three 12 yard end
dumps but it could carry the same amount with one 17 yard truck in
the same amount of time so it should make the city more competitive
in gravel sales along the Yukon.
Number 428
SENATOR TAYLOR asked what the primary source of employment is in
St. Mary's.
MR. SMITH said St. Mary's has a single site school district and two
local stores. He assumes about 12 jobs are in the local stores;
those jobs pay about $5 or $6 per hour.
SENATOR TAYLOR asked what the population of St. Mary's is.
MR. SMITH said about 500 people live in St. Mary's.
SENATOR TAYLOR said he can sympathize with St. Mary's in its desire
to put more pipe in the ground and get the road project going as
there isn't a small community in the state that wants to do the
same. He expressed concern that the other communities are always
saddled with Davis Bacon wage requirements and that small
communities are treated differently.
MR. SMITH said he believes it is because of the relative poverty in
St. Mary's. The residents of St. Mary's are exceedingly poor and
the area has very limited resources. Something needs to be done to
train the local people and make them more versatile. This project
is truly a community development project.
SENATOR TAYLOR said he doesn't get much support from this
Administration for similar projects. He said he is amazed St.
Mary's is even getting a road repaved.
Number 184
CHAIRMAN COWDERY asked if St. Mary's would still sell the gravel to
the low bidder if the project was done with a competitive bid.
MR. SMITH clarified that he was speaking about gravel sales in the
future, not for this project. He said his understanding is that
the majority of the gravel for this project will come out of pits
that are being opened up by the state.
SENATOR TAYLOR asked where those pits would be located and why the
state wouldn't use the aggregate right there since the city has a
rock crusher.
MR. SMITH said a majority of the rock, which will amount to 150,000
cubic meters, will be "pit-run" material for the base course. It
will not be crushed so the state will be opening up at least two
other pits between the city and the airport at a high point so the
trucks will go uphill empty and downhill loaded. If the state used
the city pit, which is close to town, the costs would be
horrendous.
CHAIRMAN COWDERY asked Mr. Smith if he believes the state would
open up pits to furnish the aggregate necessary if the private
sector bid the job.
MR. SMITH said the pits the state will open are not owned by the
state - they are owned by Chulista. The state is negotiating for
use of those pits.
CHAIRMAN COWDERY thanked Mr. Smith for his testimony and asked Mr.
Head to testify.
MR. ROGER HEAD, RV Management Services, said that most of the work
his firm does is in rural Alaska, the majority being in the Lower
Yukon-Kuskokwim area. He is very familiar with the unemployment
situation in that area, which is at about 22 percent right now.
The unemployment rate in that area has traditionally been the
highest in the state for the last ten years.
TAPE 01-9, Side A
MR. HEAD said DOTPF has a number of mechanisms that prevent the
overuse of force accounting. The federal government has very
stringent policies on its funds. He is concerned that this
legislation will create additional restrictions that are
unnecessary and will not be in the public interest.
MR. JERRY DRAKE, from Bethel, representing himself, said he is a
member of the city council. The city council passed a resolution
in support of St. Mary's ability to operate a force account. In
his opinion, the purpose of SB 83 is to prevent the possibility of
abusing the force account system. Every dollar pumped out of the
state has checks and balances so that it won't be abused. He
stated that very few communities are able to do a force account
project because they do not have the infrastructure necessary to
support the project. That being the case, force accounts have a
built-in limit already. In his view, anytime the state allows a
community to do a force account project, everybody wins. Every
dollar spent in local wages is spent back in the community and
helps that economy.
MR. STEVE WEAVER, Alaska Native Tribal Health Consortium, said one
of the Consortium's responsibilities is the operation of sanitation
facilities and construction programs in partnership with the 220
federally recognized tribes of Alaska. Most of those projects are
funded through cooperative agreements with multiple federal and
state agencies. Some of those projects include contributions from
DOTPF for improvements, such as boardwalks and access roads. The
local governments that the Consortium works with often select force
accounts as a means of constructing these facilities. Force
accounts are an improved construction option for all of the
Consortium's funding agencies. It is one of several options
available to local governments. The Consortium recommends that
option remain available in the communities' toolboxes.
CHAIRMAN COWDERY announced that no one else wanted to testify and
that he would like to move SB 83 to its next committee of referral.
SENATOR WARD moved SB 83 and its accompanying fiscal note from
committee with individual recommendations.
SENATOR ELTON objected and said that he sees no connection at all
in controlling the use of force accounting by putting an arbitrary
cap on those accounts.
A roll call vote was taken. The motion to move SB 83 from
committee carried with Senators Ward, Taylor, Wilken, and Cowdery
voting "yea," and Senator Elton voting "nay."
CHAIRMAN COWDERY announced that SB 83 moved to the Senate Finance
Committee.
SB 100-REGULATION OF AERONAUTICS
CHAIRMAN COWDERY stated that SB 100 was before the committee and
that he did not intend to move the bill today. He asked Senator
Halford, sponsor of SB 100, to present the bill.
SENATOR RICK HALFORD explained that the state air commerce laws are
primarily based on a 1960 act that was carried from the 1927 and
1939 acts. Those laws are out-of-date. A number of provisions do
not apply and have been superceded by federal law or they are in
direct conflict with the current state policy so they have not been
enforced. DOTPF did most of the research on which provisions of
the statutes need to be repealed. DOTPF also recommended an
amendment. Both a House and Senate bill have been introduced on
the survival gear provisions. The existing provisions are not only
out-of-date, they are impossible to meet if a plane flies to
Canada. He informed committee members that the House bill is close
to passing and he suggested the contents of SB 100 be added to the
House bill.
CHAIRMAN COWDERY repeated his intention not to pass SB 100 from
committee today.
SENATOR ELTON asked for clarification of Sections 3, 4 and 5. He
noted the sponsor statement states that Section 3 specifies that an
airport must be public or if private, open, for a person to be
charged with obstructing the airport or runway. He reads those
sections to remove the provision under which an operator of an
aircraft can be charged with DWI.
SENATOR HALFORD said that is certainly not his intent.
SENATOR ELTON said he didn't think so. He also asked for
clarification of the definition of "intoxicating liquor" in section
4. He questioned whether, under Section 5, a person who is
convicted is punishable by a fine of not more than $500, which is
considerably less than the DWI provisions.
SENATOR TAYLOR noted a committee substitute had been prepared.
SENATOR ELTON acknowledged that those sections were removed from
the committee substitute.
SENATOR WARD moved to adopt CSSB 100(TRA) as the working document
of the committee (Version F). There being no objection, the motion
carried.
SENATOR ELTON clarified that the provisions he was speaking to are
now included in Sections 6, 7, and 8 of the committee substitute.
CHAIRMAN COWDERY said, to his understanding, if certain conditions
prevail, a pilot can land anyplace.
SENATOR HALFORD asked Juli Lucky to provide the committee with a
sectional analysis of the committee substitute.
MS. JULI LUCKY, staff to Senator Rick Halford, said in Section 1,
the reference to the Department of Commerce and Regional Affairs
(CRA) was changed to the Department of Transportation because it
now deals with DOT. Sections 3, 4, and 5 are new sections that
specify when a private airport must be open for a person to be
charged with obstructing an airport or runway. Section 9 adds a
few survival rations and specifies that larger planes are exempt,
which is in statute. Section 10 contains references to statutes
and penalty sections. She pointed out Section 10 speaks to Senator
Elton's question. Section 11 deals with civil liability. Section
12 contains a technical change, and Section 13 contains the
repealers.
MS. LUCKY stated that regarding Sections 6, 7, and 8, which Senator
Elton questioned, those sections were recommended by the Alaska
State Troopers. The DWI provision is covered under AS 28.35. The
troopers found that having DWI laws in two places was duplicative
and confusing. The troopers requested that the references to AS 28
regarding DWI be removed and changed to controlled substances,
which is consistent with the other statutes. She explained the
part that was in the aviation statutes will be taken care of in the
DWI statutes.
SENATOR ELTON said his concern is which provisions are applied,
especially on the penalty side. For a violation of the chapter
that is covered under Section 6, he would rather have the penalties
in AS 28.35 applied than the $500 cap.
MS. LUCKY said, to her understanding, one reason the troopers want
the DWI removed from this section of the aviation statutes is to
avoid confusion. Therefore, DWI will not covered in Title 2; the
reference will be moved to AS 28.
SENATOR ELTON offered to follow up with Ms. Lucky and the troopers
on that question before the next meeting.
Number 1038
SENATOR HALFORD said, regarding the questions that relate to
closing a public versus a non-public runway, at the time the
original acts were passed, there was a real effort to maintain
every possible runway. Since then, liability questions and private
property questions have arisen. Sections 3, 4, and 5 apply to
those questions. He felt those sections are the most substantive
in the bill; the rest of the bill consists of DOTPF
recommendations.
SENATOR TAYLOR asked Senator Halford if it would do any damage to
insert "or rotor wing" in Section 5.
SENATOR HALFORD said he didn't think so.
SENATOR TAYLOR pointed out that would cover helicopter landing
opportunities also. He said he raised the question because federal
agencies have closed off the entire national forest and wilderness
in Southeast to helicopter landings unless the pilot can prove he
or she has landed in that spot in the past.
SENATOR HALFORD did not think SB 100 would preempt the federal
government from doing that.
SENATOR TAYLOR agreed but said SB 100 will impact state lands and
private lands.
SENATOR HALFORD responded, "Well, it's navigable water and public
lands so it's not the private property and it's subject to public
safety and a basic notice requirement."
SENATOR TAYLOR asked Senator Halford to consider the inclusion of
helicopters as a proposed amendment. He referred to Section 11,
regarding civil liabilities, and said his primary concern is to
make sure the runways that section applies to are privately owned.
He does not think the bill contains a clear definition of a private
airstrip that welcomes the public and a private landing strip where
others are not welcome to land.
SENATOR HALFORD said the two questions regarding the ability to
close and where liability accrues are clearly tort questions, which
is why he asked Senator Taylor if he wanted the Judiciary Committee
to hear the bill.
SENATOR TAYLOR said he thinks the bill is a good draft but he is
concerned that commercial activity is considered to be the
triggering device. One could have a totally private landing strip
that the owner uses for a guiding business, which is commercial.
He pointed out that one of the triggers in Section 11 is whether a
fee is charged for landing but it does not address a runway owner
who leases hangar space.
SENATOR HALFORD said he is counting on Senator Taylor to figure
those answers out. He indicated he is trying to remove the
disincentive for an individual to maintain or have anything to do
with a runway because of the potential liability. The other
problem is that there are airports all over that aren't listed in
the airmen's guide because owners don't want people to know they
are there. Some are on public property adjacent to private
property. No one wants to maintain those runways.
SENATOR TAYLOR said he has asked to have some research done and
hopes to come up with some answers but he does not know that any
lawsuits have ever been filed in Alaska involving a runway.
SENATOR HALFORD pointed out that the bill contains a large repealer
section to the old Title 2. The sections in the bill that are
significant are the issues they have been discussing.
Number 1415
CHAIRMAN COWDERY asked why weapons were not included in Section 9.
He asked if that issue has been addressed in the House bill.
SENATOR HALFORD said that is addressed in the House bill. The
weapon requirement was taken out for flights to Canada only. He
pointed out that this is an area where the existing state law has
not been enforced for decades. The bill initially, at the request
of DOTPF, repealed the whole section but the Department of Public
Safety (DPS) wanted to have something in the bill. DPS wanted a
general statement so that there was some requirement they could go
after but that looked like it might lead to selective enforcement
and not be a good way to go. He then went back and tried to come
up with the simplest and shortest version of a list that was an
update from the original list. He didn't include a firearm at that
point. He pointed out that pilots who make a living flying
generally carry a lot more than what is required by the list.
CHAIRMAN COWDERY repeated that SB 100 will be held in committee.
MR. KURT PARKAN, Deputy Commissioner of DOTPF, informed the
committee that Carl Sevey (ph) is an engineer in the statewide
aviation section of DOTPF. Mr. Sevey worked with Senator Halford's
staff on SB 100; he is available for questions.
There being no further questions or comments from committee
members, CHAIRMAN COWDERY said he would wait for the House bill and
work with both bills. He then adjourned the meeting at 3:38 p.m.
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