Legislature(2001 - 2002)
03/22/2001 01:37 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 22, 2001
1:37 p.m.
MEMBERS PRESENT
Senator John Cowdery, Chair
Senator Robin Taylor
Senator Kim Elton
MEMBERS ABSENT
Senator Jerry Ward, Vice Chair
Senator Gary Wilken
COMMITTEE CALENDAR
SENATE BILL NO. 123
"An Act relating to legislative approval for the design and
construction of facilities of the Alaska Railroad Corporation."
MOVED CSSB 123(TRA) OUT OF COMMITTEE
SENATE BILL NO. 111
"An Act relating to financing facilities for municipal ports and
harbors; and providing for an effective date."
MOVED CSSB 111(TRA) OUT OF COMMITTEE
SENATE BILL NO. 44
"An Act establishing an Alaska Toll Bridge and Causeway Authority;
and providing for an effective date."
SCHEDULED BUT NOT HEARD
SENATE BILL NO. 45
"An Act making an appropriation for the design of the Knik Arm
crossing; and providing for an effective date."
SCHEDULED BUT NOT HEARD
PREVIOUS COMMITTEE ACTION
SB 44 - No previous Senate committee action.
SB 45 - No previous Senate committee action.
SB 111 - No previous Senate committee action.
SB 123 - No previous Senate committee action.
WITNESS REGISTER
Senator Drue Pearce
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SB 123.
Representative Andrew Halcro
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Supports SB 123.
Representative Norm Rokeberg
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Supports SB 123.
Kristy Tibbles
Aide to Senator Pearce
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Provided information about SB 123.
Johnne Binkley
Alaska Railroad Corporation
PO Box 107500
Anchorage, AK 99510-7500
POSITION STATEMENT: Supports the intent of SB 123 but prefers
that a different procedure be used.
Wendy Lindskoog
Alaska Railroad Corporation
PO Box 107500
Anchorage, AK 99510-7500
POSITION STATEMENT: Answered questions about ARRC's public
process.
Jerry McCutcheon
Box 101538
Anchorage, AK 99510
POSITION STATEMENT: Commented about ARRC's operations.
Paul Laberty
224 E. Manor Ave.
Anchorage, AK 99501
POSITION STATEMENT: Supports CSSB 123(TRA).
Linda Anderson
River's Edge Resort
Fairbanks, AK
POSITION STATEMENT: Supports CSSB 123(TRA).
Kurt Parkan
Deputy Commissioner
Department of Transportation &
Public Facilities
3132 Channel Dr.
Juneau, AK 99801-7898
POSITION STATEMENT: Answered questions about SB 111 and SB 118.
Charlie Branch
PO Box 1692
Cordova, AK
POSITION STATEMENT: Supports CSSB 111(TRA).
Ray Majeski
617 Katlian St.
Sitka, AK 99835
POSITION STATEMENT: Supports CSSB 111(TRA).
Daniel Hickman
Petersburg Harbor Board
Petersburg, AK 99833
POSITION STATEMENT: Supports CSSB 111(TRA).
Bob Prunella
City Manager
PO Box 531
Wrangell, AK 99929
POSITION STATEMENT: Supports CSSB 111(TRA).
Sandra Moller
President and CEO
Aleut Enterprise Corporation
Adak, AK
POSITION STATEMENT: Supports Adak's inclusion in SB 111.
Chris Gates
Aleut Enterprise Corporation
Adak, AK
POSITION STATEMENT: Supports Adak's inclusion in SB 111.
Matt Rowley
City of Whittier
Whittier, AK
POSITION STATEMENT: Supports CSSB 111(TRA).
John Bitney
Alaska Housing Finance Corporation
POSITION STATEMENT: Explained bond provisions of SB 111.
Mark Hickey
Aleut Enterprise Corporation
POSITION STATEMENT: Explained the status of the harbor in Adak.
ACTION NARRATIVE
TAPE 01-10, SIDE A
Number 001
CHAIRMAN JOHN COWDERY called the Senate Transportation Committee
meeting to order at 1:37 p.m. Present were Senators Taylor, Elton
and Cowdery. Senator Pearce was also present. Chairman Cowdery
announced that the order of bills would be SB 123, SB 111, SB 44
and SB 45, and that it is not his intention to move SB 44 or SB 45
at this time.
SB 123-LEGISLATIVE APPROVAL:RAILROAD FACILITIES
SENATOR DRUE PEARCE, sponsor of SB 123, noted that she represents
District F in Anchorage, which encompasses the Anchorage
international airport and the international access road to the
airport. She informed committee members that both Representative
Halcro and Representative Rokeberg represent corresponding house
districts are were present to testify.
CHAIRMAN COWDERY asked for a motion to adopt the proposed committee
substitute to SB 123 (Version C).
SENATOR TAYLOR so moved.
CHAIRMAN COWDERY announced that with no objection, CSSB 123(TRA)
was before the committee.
SENATOR PEARCE explained that SB 123, as originally introduced,
requires the Alaska Railroad Corporation (ARRC) to obtain
legislative approval for design and construction of facilities that
have an estimated cost greater than $5 million. She introduced
this legislation in response to a specific facility under
construction at the Ted Stevens International Airport - the ARRC's
rail station project. Financing for that project was received from
the federal government back in 1998. The first time the
legislature learned of the project in any form was during the 1999
session as part of a Finance Committee overview. The intent of SB
123 is not to stop that project; the money has been appropriated
and the project is underway. Her goal is to see ARRC use a more
public process for future projects that involves Alaskans from the
beginning.
SENATOR PEARCE said the rail station project has caused a lot of
consternation in her district for a number of reasons: the
correctness of the feasibility study and market analysis; and the
fact that the market analysis was done after the money for the
project was obtained - a cart before the horse.
SENATOR PEARCE stated that in getting the rail to the airport, ARRC
will need tens of millions of dollars to either elevate the
railroad through a neighborhood, perhaps requiring one of the
neighborhood's main feeder streets (Northwood) to be closed off.
Everyone of the different projects has an impact on the
neighborhoods but the residents are particularly concerned about
noise and traffic impacts. SB 123 includes the legislature in the
approval process for ARRC projects. She believes that if a public
process was required, the legislature would be willing to see the
railroad expand. The legislature wants ARRC to continue to be
financially strong and the state needs the railroad. However, the
planning process on the public side must be handled in a better
manner.
SENATOR PEARCE said the committee substitute has an additional
section (Section 7) on page 2. Section 7 says the ARRC cannot:
begin the design or construction of a new railroad line
realignment and railroad corridor project through an
existing community having an estimated total design and
construction cost greater than $10,000,000.
She noted that section speaks to a specific idea that is on the
table in the Fairbanks area to realign the railroad. Once again,
while federal dollars would be used, some of our highway dollars
are likely to be necessary to make that project feasible. She
didn't know whether a market analysis or feasibility study has been
done for that project.
Number 447
REPRESENTATIVE ANDREW HALCRO, House District 12, thanked Senator
Pearce for introducing SB 123. He said SB 123 is more about "it
can happen in your community." SB 123 is not a commentary on the
operations of ARRC, it is simply a commentary on how legislators
need to make sure they have some accountability to their
constituents. He has found it very frustrating to talk to
neighbors about this project. They look at him as though he should
have had the leverage to do something or have a greater impact. He
has to shake his head and tell them, "Well, when they asked for
public comment, I did write a letter. That basically, is the limit
to our influence over the process."
REPRESENTATIVE HALCRO stated that about a month after he was
elected in November of 1998, he had lunch with the chairman of ARRC
(Bill Sheffield). They talked for an hour about this project. He
tried to convince the chairman that the project was a $20 million
waste of taxpayers' money. The chairman assured him that an
economic feasibility study would be done and all options would be
kept open. About three or four months later, he read a Wall Street
Journal article about how rail links to airports have been a bust
in some major cities. For example, in Philadelphia, with a
population 15 times that of Anchorage, the airport rail service is
barely used because passengers have to wait 30 minutes for a train.
He sent a copy of the article to the chairman and the airport
manager, Mr. Plumb. A few months later the economic feasibility
study was done. The study raised more questions than answers. It
pointed out that the railroad has a lack of infrastructure and
other salient points that concluded that this project had a slim
chance of succeeding. He noted that several years ago the People
Mover bus service to the airport was reinstated and greeted with
fanfare. Today, that route has the lowest rider-ship in the People
Mover system, which proves that mass transit is not conducive to
the 8,000 people that work at the airport. Many of those employees
work at businesses several miles from the terminal, such as FedEx,
so a train to the terminal will not be convenient for them. He
thought the study would "put the brakes" on the project, but it did
not.
REPRESENTATIVE HALCRO said his primary concern is that discussions
have just begun about the additional $15 to $20 million that will
be needed to realign the approach tracks down International Airport
Road. Suddenly, some of these neighborhoods are faced with the
possibility that their access to some major thoroughfares will be
cut off because of the realignment. He expressed concern that the
public process has been less than adequate for this project. He
feels the legislature needs to send the message that although it
does not want to get involved in the day-to-day operations of the
railroad, it wants to be accountable to constituents whose quality
of life is being impacted by these projects.
Number 745
CHAIRMAN COWDERY said he wasn't sure whether Representative Halcro
was chair or vice-chair of the House Transportation Committee when
it held hearings on this project, but the same issues were raised
at that time and the rider-ship question was asked but never
adequately answered. He maintained that he has been approached by
some of the private transport companies and they claim this will
put them out of business. He noted, "Just because the money is
free, so to speak, it's a tough decision. I don't want to be anti-
receiving money but I think it could be better spent in maybe some
of the other areas as needed."
REPRESENTATIVE HALCRO said ARRC updated the House Transportation
Committee last year on its spill remediation process at Gold Creek.
ARRC also informed the committee of the status of the airport rail
station. Committee members asked many questions about the rider-
ship but were given no answers. He believes there really are no
answers. The project is being built because ARRC has the money.
That goes against what he hopes would be a better public policy and
better public hearing process.
SENATOR TAYLOR indicated that Senator Ward has suggested to him
that the profits of the railroad should be used to offset the
losses of the ferry.
Number 857
SENATOR PEARCE pointed out the market analysis showed that because
Anchorage is on the far northern and western coast of the United
States, most passengers leave on the "red eye" or early morning
flights so that they can connect with other flights during the day.
That means the passenger trains to the airport will have to run at
night through the neighborhoods. Airport noise is already a big
issue in Anchorage so adding trains to the mix is cause for
concern.
REPRESENTATIVE HALCRO said the market analysis projects that by the
year 2005, 80,000 local residents will utilize this service. That
equates to over 7,200 people per month. He asked ARRC where those
people will come from and received no answer. He repeated that he
questions the projections.
SENATOR TAYLOR asked if SB 123 just "closes the barn door" and
takes care of future concerns.
SENATOR PEARCE said the federal dollar spigot is open, thanks to
the Congressman and the Senator. She is concerned that money
should not be granted before a market analysis is done. It should
be the other way around. Also, ARRC projects should be integrated
with what is being done at the legislative level with federal
highway and airport funds. She said Senator Taylor's assessment is
correct and that the additional monies for the track realignment
have not actually been procured as of yet, but there is every
expectation the delegation will help with that. ARRC is an asset
that the state should protect but the legislature should be
involved in long term planning for the railroad.
Number 1071
REPRESENTATIVE NORMAN ROKEBERG, representing District 11 in
Anchorage, stated the proposed track realignment is in his
district. He is very concerned and appreciates Senator Pearce's
and Representative Halcro's comments. SB 123 speaks to the failure
of the process; it is a case of a lack of communication and
coordination between the various transportation sectors. He
stated, "And I'd say to Senator Taylor, if you want the railroad to
produce a profit, they can't be building money-losing projects like
this. The estimates are up to $18 to $20 million on the
realignment, depending on which route or style of construction
would be selected ...."
REPRESENTATIVE ROKEBERG said a real breakdown in involving the
public in this process happened during the life of this entire
project. As stated in prior testimony, the cart came before the
horse. The effect on the community is only being recognized now as
the Department of Transportation and Public Facilities (DOTPF) and
ARRC are looking at the down track realignment to be able to
properly service the airport depot. This legislature and the
affected community had no involvement in the process. The first
public meeting, to his knowledge, was held on September 13, 2000.
That meeting was about the route realignment. He notified 1,500
residents in his area of the meeting; almost 100 attended the
meeting. Most said they wouldn't have known about the meeting
without his mailing. People were aware of the depot but didn't
realize that by putting that project in, there was an assumption
made that the track would have to be realigned. He is very pleased
to see the committee substitute to SB 123 because he was going to
suggest to the sponsor that such a provision be added to the bill.
REPRESENTATIVE ROKEBERG said the track probably needs to stay
exactly where it is because about 700 families right above it will
be impacted. The location is west of the intersection of Minnesota
and International Airport Road going to Northwood, which goes north
and services the ingress and egress to the South Spenard area by
the Spenard recreation center. The various suggested lanes will
cut that ingress and egress off and funnel the traffic down Aspen
out to Spenard Road, basically turning a neighborhood street into a
major arterial. One of the other alignment routes would cut off
the Northwood ingress and egress to all of the commercial land and
the city snow dump and maintenance area as well as the ball fields.
That area consists of about 80 acres of commercial, public use and
park lands that would be cut off. All of the suggested
alternatives have significant problems associated with them. The
realignment project is further complicated by an interchange at
Jewel Lake - International Airport Road, where the rail will have
to come in.
REPRESENTATIVE ROKEBERG stated full support for CSSB 123(TRA). He
felt it is unfortunate that if there was any way the people who
live in that area could have stopped the development of the
railroad depot at the airport, they would have. He added the
Anchorage Convention and Visitors' Bureau spends probably $15 or
$20 million to entice tourists to say a day longer in the Anchorage
area. This proposal may whisk those cruise ship passengers from
Seward directly to the airport, bypassing Anchorage.
SENATOR ELTON asked what kind of a local process the ARRC goes
through when making routing decisions through urban communities.
REPRESENTATIVE ROKEBERG replied the state is subject to Title 21 of
the Anchorage Building Code, but he acknowledged that is a good
question and should be directed to ARRC.
Number 1406
SENATOR ELTON said the reason he asks is that if there are
established local processes that govern decisions that are inimical
to the interests of some of the neighborhoods in Anchorage, and
then another political layer is established where legislators of
all stripes are making those kinds of investment decisions, that
will put a heavy burden on ARRC.
SENATOR PEARCE indicated that Mr. Binkley could answer that but she
pointed out that in Anchorage, a land exchange, like the one done
last year with the ARRC, must go through the legislative process.
However, she doesn't believe the terminal facility had to go
through a local process. If someone wants to rezone a lot in her
area, all of the house sites within a certain area must be notified
of the public hearing. That process wasn't followed for the depot.
The same is true of airport projects; because they are on state
land, local zoning things do not have to happen. She noted when
the railroad was transferred to the state, the legislature made a
conscious decision to try to make the railroad as autonomous as
possible. Over the years, various communities have been angry at
the railroad at different times. Much of the legislation that has
been put forward about the railroad, because of frustrations of
various constituencies, has not met with success. Usually someone
was out there who was willing to protect the railroad - it used to
be Senator [Tim] Kelly. She thinks when this sort of project
happens with no public process and the money is procured before the
project is designed, a better process is necessary. Although ARRC
now says it will change the way it does things, she has heard that
many times.
SENATOR ELTON asked how "facility" is defined. He assumes
"facility" does not cover planting a fiber optic line along the
railroad right-of-way.
KRISTY TIBBLES, legislative assistant to Senator Pearce, said she
will check with the Division of Legal Services but she believes the
drafter told her it was the common dictionary definition.
SENATOR PEARCE said it is not her intent for right-of-ways for
other services, like the fiber optic system, to be affected by this
bill. She is referring to bricks and mortar projects. She noted
it also wasn't her original intent if the railroad, in upgrading
its rail, straightens out a curve a bit to be safer, to get into
that area. She believes that arguably there are areas in between
Anchorage and Fairbanks that need realignment, but when ARRC starts
making changes inside areas like the Fairbanks North Star Borough,
there needs to be a process that integrates all of these different
things.
REPRESENTATIVE ROKEBERG said, in response to Senator Elton's
question, that Anchorage has a problem in the way it deals with the
federal government. The realignment project is federally financed
so it may or may not go through the AMATS process. That's why he
supports this bill very strongly. It's one of those other methods
with which we can reconnect, particularly even the Anchorage
delegation, with transportation planning in the Anchorage area.
Number 1695
CHAIRMAN COWDERY asked Mr. Johnne Binkley to testify.
MR. JOHNNE BINKLEY, a former Alaska Senator, current riverboat
captain, and ARRC board member, gave the following testimony on SB
123.
He had a chance to talk with Senator Pearce prior to the
introduction of SB 123. He appreciates why Senator Pearce
introduced the bill; ARRC needs a better process when working with
the legislature on some of these projects that do impact
constituents so that they have input into that process.
When the State of Alaska purchased the railroad and it was
transferred to the state, the railroad had tremendous deficiencies
that were noted by the federal government. The federal government
promised to take care of those deficiencies, but the federal
government was never willing to come forward with those dollars
over the years until Senator Stevens became Chairman of the
Appropriations Committee. Senator Stevens was very involved in the
railroad transfer when it took place in the mid 1980s and he
distinctly recalled the commitments made by the federal government
to the State of Alaska. Senator Stevens has felt compelled over
the years to live up to that commitment and he has been very
effective in securing federal dollars apportioned for rail lines
throughout the country for ARRC. ARRC has felt very blessed to
receive a portion of those federal dollars.
Initially, when Senator Stevens was successful in securing funds,
the funds were in smaller amounts. The first amount was $10
million for the purchase of new railroad ties. The last major tie
renewal program was in the early 1950s. The ties were wearing out
and it was noted in the transfer. As ARRC began to replace the
ties, it also replaced some of the rail and improved the ballast
system under the track.
The airport rail project is a major project for ARRC that is a bit
outside of the scope ARRC is used to. That project involves a
building. ARRC has maintained its buildings but is not used to
building new buildings, especially those that impact communities.
As a result of this project, ARRC has learned a lot. Senator
Stevens was able to secure the full amount of the airport rail
appropriation ($28 million). That appropriation did not require a
match from ARRC. Those funds arrived sooner than anticipated.
When ARRC decided to pursue this project, it was because of an
opportunity to preserve a rail corridor into the international
airport for future use when the state was looking at a major
expansion of the Anchorage airport.
MR. BINKLEY repeated that ARRC has learned a lot from the airport
rail project. It made a lot of mistakes in the way it approached
this project. Hopefully ARRC has learned from those. ARRC has
other projects in the works: new depots in Denali, a new depot in
Fairbanks, a cruise ship dock facility in Seward, upgrading the
existing depot in Anchorage, and a new shop for passenger cars.
ARRC is learning how to engage the community to make sure everyone
is involved in these projects. In addition, there is a proposed
realignment project in Fairbanks to eliminate 48 at-grade crossings
where roads and rails intersect. ARRC has learned in that process
that before it just barges into a project, it has to explain what
it is doing to the community.
MR. BINKLEY said he believes ARRC has gained insight and, that the
purpose of SB 123, to formalize ARRC's process, is a good one.
However, he would like to see something short of legislation, that
requires an approval process before ARRC begins the design of any
project. He cautioned that it takes a long time to do those
things, including reconnaissance engineering and design, before
ARRC knows whether a project is even feasible. Requiring
legislative approval before ARRC starts down that road will be
difficult. He agrees that a more formal process that will allow
for legislative input is necessary. He does not have a proposal at
this time but suggested using a Legislative Budget and Audit
process or a process similar to the Statewide Transportation
Improvement Plan used by DOTPF.
MR. BINKLEY indicated that ARRC is concerned about maintaining its
autonomy, which is the key to its profitability. To do that, ARRC
has to be careful that the decisions it makes are not made for
political reasons. He hopes to have an opportunity to work with
the sponsor and Chairman on crafting a mechanism that provides for
legislative input short of introducing a bill for a specific
project.
Number 2078
CHAIRMAN COWDERY acknowledged that he has heard complaints about
how the Fairbanks realignment project will impact businesses in the
area. He asked if ARRC has followed through on public hearings in
Fairbanks for that project.
MR. BINKLEY said ARRC has just begun that process. It has just
completed the conceptual engineering to determine the costs and
whether the project is technically feasible. ARRC is now inviting
the affected neighborhoods to comment on the proposal. If ARRC
continues to proceed with that project, the process will be long
and drawn out and an environmental impact study will most likely be
done.
CHAIRMAN COWDERY referred to Mr. Binkley's comment about the
federal government's promise of deficiency upgrades when the state
purchased the railroad, and asked if ARRC considers the airport
rail extension to be a deficiency upgrade.
MR. BINKLEY said it does not.
CHAIRMAN COWDERY noted that he owns property in different areas and
whenever a zoning change is proposed, he receives a card in the
mail. He asked if the people impacted by the airport rail project
ever received such a notice from ARRC.
MR. BINKLEY asked that Wendy Lindskoog answer that question.
MS. WENDY LINDSKOOG, Director of External Affairs for ARRC, agreed
with Mr. Binkley that ARRC did not do a good job regarding public
involvement in the airport rail project. She came on board with
ARRC in October of 1999. At that point, ARRC stepped up the
project, tried to get out to community councils, and held open
houses, some of which included mailings. Unfortunately, those
activities were not held at the inception of the project. She can
support what ARRC has done since October of 1999 but prior to that
she cannot say that ARRC did an adequate job as a state-owned
entity in getting the word out to the public.
CHAIRMAN COWDERY asked if the cost of the right-of-way acquisition
will be an added expense.
MR. BINKLEY asked if Chairman Cowdery was referring to the airport
rail project.
CHAIRMAN COWDERY said he was referring to the realignment in
Senator Pearce's district.
MR. BINKLEY said he believes there are several options for that
realignment. He noted the realignment is just a proposal and that
an existing rail line goes into the airport. Initially, that
existing rail line would be used to serve the airport. If the rail
station has a huge commuter demand that interrupts the traffic
flows at the at-grade crossings, the grade will need to be
separated to minimize any impact to vehicular traffic. When this
station was opened initially, its anticipated use was for cruise
ship passengers coming from Seward. ARRC is looking at two trains
per day for those passengers; one in and one out. Its use will be
very limited and he anticipates using the existing right-of-way in
and out of the airport.
CHAIRMAN COWDERY said one concern that he has is that once ARRC is
tied into a project, it might incur added costs, yet the
legislature is not aware of the full picture. He doesn't believe
the legislature intends to micromanage ARRC. He noted AS 36.03.0800
says that any lease cost of $500,000 or more, or a $2.5 million
cost during the life of the lease, must be reported to the
legislature. He pointed out it relates to SB 123 in that the
legislature, in his opinion, only wants to know what is going on.
SENATOR PEARCE stated that she does not know what solution lies in
the middle, regarding legislative approval or at least
authorization for utilization of the monies, which is what the
legislature does for federal highway funding and airport funding.
She appreciates what Mr. Binkley is asking the legislature to do
but she is not sure what that would look like. She noted that when
she hears that the airport rail project will cost $28 million and
will have one train in and one train out per day during the summer
only, she questions whether that is the best use of $28 million to
ARRC.
TAPE 01-10, SIDE B
SENATOR PEARCE said she has no problem with keeping the railroad
corridor to the airport, but that project seems like a waste of $28
million, especially when the state has so many needs. She feels
the legislature and ARRC need to discuss these projects before ARRC
makes requests from Senator Stevens.
SENATOR ELTON asked if the solution might be to make SB 123 apply
only when the facility is going to be located in an organized
community so that ARRC doesn't have to get legislative approval for
a facility outside of an organized community.
MR. BINKLEY responded that ARRC doesn't build too many facilities.
SENATOR ELTON asked if Denali park is unorganized.
SENATOR PEARCE said it is a borough. She said she can't think of a
Senate district that doesn't already have a depot.
SENATOR ELTON asked about realignments.
MR. BINKLEY said the major alignments that ARRC is looking at are
at Wasilla, Nenana, Fairbanks, and the existing one between Wasilla
and Anchorage.
CHAIRMAN COWDERY asked if the Wasilla/Anchorage realignment has
been approved by the Legislature.
MR. BINKLEY said the land exchanges have.
SENATOR PEARCE noted that Section 7 of CSSB 123(TRA) refers to a
project in an existing community. That was specifically put in the
bill to try to get away from alignments through Healy Canyon.
Number 2248
SENATOR TAYLOR said it amazes him that all of the major
transportation infrastructure in this state, with the exception of
the ferries, was built in World War II. He finds it incredible
that ARRC is using this type of funding to upgrade for the tourist
community. It is building new terminals at a tourist park that
Alaskans have to get on a waiting list to get into. It is
upgrading facilities at the airport for tourists and facilities for
tourists going in and out of Fairbanks. He asked why ARRC is not
extending the railroad south. He commented that every highway in
this state was built in World War II and the only thing that's been
done, especially during this Administration, is make them a little
wider with better paving and put bike paths on both sides of them.
He guarantees that no one in his district would complain about the
noise from a railroad. He said he wonders how many miles of rail
the $28 million could extend south.
MR. BINKLEY said the $28 million for the airport rail project came
through the Federal Railway Administration. It was part of an
expenditure specifically for depots around the country. ARRC did
not have the opportunity to use it in a different manner. He
pointed out that the cost of constructing new rail is about $2
million per mile, if there are no major grade problems or bridges.
ARRC would love to extend the rail line. It is working closely
with Representative James to extend the line East to the Canadian
border. He is part of a Northwest transportation group that is
looking at extending the rail to the Northwest Arctic. Under the
original act by Congress, Alaska was guaranteed 1,000 miles of
rail, which has never come about. ARRC stands ready to talk to
Alaska's congressional delegation on a regular basis about dollars
to expand the rail. That would be ARRC's preference as well.
Number 2092
SENATOR TAYLOR said, regarding the question of ARRC's future
development strategy and politicizing the process, maybe it is time
to take some of the decision-making out of the Railbelt, which
dominates the entire question of expansion. He expressed support
for SB 123 and said he wouldn't want to see a procedure like the
STIP used as that is just a rubber stamp process.
MR. BINKLEY clarified that any projects that ARRC does in Anchorage
go through the AMATS process.
Number 2004
CHAIRMAN COWDERY took public testimony.
MR. JERRY McCUTCHEON, testifying from Anchorage said, with respect
to Mr. Binkley, former Governor Sheffield did not get the money for
ARRC. He attended a recent ARRC open house at which the airport
rail project was shown. He asked the engineer about taking the
parking areas and was told ARRC was paying for the parking area.
He believes the airport rail project makes no sense. That terminal
cannot be supported by tour ship passengers only. He suggested
scrapping the project right now. He pointed out the problem with
the derailments was caused by the fact that employees were paid to
not maintain the track. ARRC employees are currently being paid to
figure out design projects, no matter absurd, on which ARRC can
spend its free money. SB 123 does not address that problem. He
told legislators they need to address what is going on at the spill
sight. ARRC is still trying to pump, with suction pumps, fuel up
35 feet.
Number 1863
PAUL LABERTY, a resident of the [indisc. The government ?] hill
neighborhood, which is immediately adjacent to the rail yard in the
downtown Anchorage area, said he supports CSSB 123(TRA). Regarding
Senator Pearce's comment about the rail project market analysis
being a cart before the horse, he attended the ARRC board meeting
in the summer of 1998. Commissioner Perkins asked staff if the
feasibility study for the airport terminal had been done, because
DOTPF was looking at spending $20 million of ARRC funds at that
time. No feasibility study had been done to verify whether the
project was viable. About three or four months later, Senator
Stevens came through with money for the construction. Regarding
Senator Elton's question, ARRC basically answers to no one locally,
at least on the planning and zoning level. For example, ARRC is
proposing to mine gravel on ARRC land adjacent to his neighborhood
within a couple hundred feet of people's homes. ARRC does not
believe it needs to get a conditional use permit for the gravel
extraction. Mr. Laberty said that Mr. Binkley does not want
construction projects to become political before the legislature,
yet ARRC executives go Washington, D.C. to lobby Senator Stevens.
He urged the committee to support CSSB 123(TRA).
Number 1750
LINDA ANDERSON, representing River's Edge Resort in Fairbanks,
stated support for CSSB 123(TRA). The Resort is in the middle of
discussions and a local debate on the Fairbanks Bypass
Reconnaissance Study. Having just learned about the Anchorage
situation, she is concerned that Fairbanks is heading down that
same path. ARRC is making an effort to involve the public in that
process, but as she speaks to people in Fairbanks about the
Fairbanks realignment proposal, she has found that many people who
should be at the table are not. Waiting until the environmental
impact statement process occurs is not the answer. Many people in
the community would like to be able to work with ARRC and look at
alternatives. It appears as though ARRC has already selected one
certain route. This route is creating an entirely new rail
corridor through the community of Fairbanks down the meridian of
the Parks Highway. Of five new hotel developments in one area,
four were not notified about this process. She has spoken with Mr.
Binkley at length about this issue, but many of the other resorts
have not. To engage the legislature in this process is appropriate
and critical. ARRC has approached our congressional delegation
about funding for the Fairbanks project. It's estimated to cost
about $85 to $100 million. The bottom line is there has to be a
lot more community input. In a second class borough, such as
Fairbanks, and most of the entire Railbelt, except for Anchorage,
there is no required authority process that has to take place,
other than resolutions, for a railroad project. Once a right-of-
way is acquired, the project can proceed. Fairbanks does have an
FMATS process but ARRC is not required to be engaged in it.
CHAIRMAN COWDERY asked for questions or further testimony. There
being none, the committee took a brief at-ease.
SENATOR TAYLOR moved CSSB 123(TRA) from committee with individual
recommendations.
SENATOR ELTON objected to comment that he does not like to get
involved in local issues. He will defer for now to the people
whose communities have been most affected. He then withdrew his
objection.
CHAIRMAN COWDERY announced that CSSB 123(TRA) would be moved to the
next committee of referral.
SB 111-BONDS TO FUND PORTS AND HARBORS
SENATOR ROBIN TAYLOR, prime sponsor of SB 111, explained that last
year the legislature passed legislation that provided for upgrading
ports and harbors across the state. This was a major part of the
commitment the legislature made to the taxpayers and voters of
Alaska when it said it would begin addressing the deferred
maintenance needs in the five year plan. Because ports and harbors
do not fall within the statewide transportation improvement plan
(STIP), money was appropriated last year for specific harbors. SB
111 reflects a problem that was occasioned by an amendment made in
the Finance Committee to last year's bill. That amendment provided
that each community would have to pay for and obligate itself to a
bond and, upon accomplishing the repair, the harbor would then be
transferred to the community. None of the communities that he is
aware of wanted to do that. The final version of the bill provided
a mechanism the communities could not take advantage of without
significantly increasing the cost to themselves. The harbors would
not be transferred to the communities until DOTPF signed off on the
repairs. That process has never been used before. The harbors
were originally built with 50 percent federal money and 50 percent
state money. Unfortunately, the state never set up an account to
maintain the harbors.
SENATOR TAYLOR explained that the only difference between SB 111
and last year's bill is that SB 111 would fund harbor repairs in
the same way they have been funded in the past, through general
obligation bonds. Those bonds are backed up by a $50 million
appropriation that the state receives from the Alaska Housing
Finance Corporation. That appropriation accomplishes the purpose
of funding these projects. He hopes that additional funds will be
forthcoming from AHFC and that the legislature will hold to its
commitment made last year.
SENATOR TAYLOR recommended two amendments to the committee: one by
Senator Elton for funding to renovate the harbors in Juneau; and
one that includes the Adak small boat harbor at a cost of $500,000.
The Adak small boat harbor could play a large role in fisheries in
that area, especially small boats that deliver to the processing
plants. He pointed out SB 111 will need to be accompanied by a
companion bill that will provide for the transfer of the harbor
facilities and require the communities to be responsible for harbor
maintenance.
SENATOR TAYLOR moved to adopt CSSB 111(TRA). There being no
objection, the motion carried.
SENATOR ELTON noted that he hardly ever completely concurs with
Senator Taylor, but SB 111 is one of those instances in which he
does. He believes Senator Taylor is absolutely right. The
deferred maintenance task force and the legislature recognized the
perfect arrangement of constellations in which the state could
bring the harbors up to snuff and then step aside from the ongoing
maintenance responsibilities by turning the harbors over to the
communities. He thinks the communities welcomed that notion
because they recognize that ports and harbors are economic engines.
However, communities were reluctant to take on that responsibility
until the state brought the harbors up to code. SB 111 gets back
to the original intent of the legislature, which was based on the
deferred maintenance task force's recommendations.
SENATOR ELTON noted that the bill may need two other changes that
are technical in nature. He explained that his proposed amendment
(Amendment 1) is on page 2. On line 9, the $34,627,500 total
amount is changed to $41,746,500 and after line 23, a new line is
added that reads, "Juneau 7,119,000." On page 3, lines 22 and 25,
the $34,627,500 total amount is replaced with $41,746,500.
CHAIRMAN COWDERY asked Senator Taylor if he is agreeable to the
amendment.
SENATOR TAYLOR said he is.
SENATOR ELTON moved to adopt Amendment 1. There being no
objection, the motion carried.
CHAIRMAN COWDERY took public testimony.
MR. CHARLIE BRANCH, City of Cordova Harbor Department, stated that
last year's last minute change put the transfer of ownership of
harbors on the municipalities first and promised to reimburse for
repairs after. He is glad to see the return to the original
intent. He supports CSSB 111(TRA).
MR. RAY MAJESKI, Sitka Harbormaster, commented that he appreciates
Senator Taylor's effort. Sitka has been eager to take over the
three state-owned harbors, but it needs the money to do the
repairs. Sitka needs the harbors repaired and transferred as
quickly as possible. Any further delay will cause the harbors to
fall into more disrepair and cost more as time goes on. DOTPF's
repair estimates are already two years old. It is critical that SB
111 pass quickly with no strings attached. Obtaining permits for
repairs could take up to five years.
Number 9993
SENATOR TAYLOR asked if the City of Sitka has already initiated
some of the emergency repairs without state funding.
MR. MAJESKI said the A, B, C, and D floats at Old Thompson Harbor
were sinking so the City appropriated $156,000 to replace
floatation and do some structural repairs.
SENATOR TAYLOR commented that some of these cities are so desperate
they are having to go into their treasuries to repair state-owned
harbors.
MR. BILL McLENDON, Acting City Administrator of Sitka, said he is
encouraged about returning to the original plan of action, that
being the money up front with no strings attached.
MS. NANCY PETERSON, Assistant City Manager of Valdez, said the City
of Valdez is very supportive of CSSB 111(TRA). She agrees with Mr.
Majeski that passing the bill this year would be very beneficial.
The City of Valdez is in need of the money now and costs are
increasing on a daily basis.
The moderator from the Petersburg LIO informed Chairman Cowdery
that Daniel Hickman would like to testify and that four other
participants from Petersburg concur with Mr. Hickman's position.
Those participants are Dean Weeden, Mark Jensen, John Stromdahl and
John Deboer.
MR. DANIEL HICKMAN, a member of the Petersburg harbor board, said
he is speaking for the members of the harbor board, most of which
were present. The board supports CSSB 111(TRA). Petersburg's
harbors are in definite need of renovation and some construction.
The board recognizes that the harbors hold an important economic
position in the community. He asked whether the bill contains any
local bond requirements or responsibilities and what the intent and
timeline is to transfer the harbors to the municipalities.
SENATOR TAYLOR explained that two bills will be necessary to
accomplish this purpose. One bill will provide for the
appropriation and the second bill will provide for the substantive
change in law. The second bill will provide for the transfer of
the harbors to the communities from the state upon the completion
of the repairs. He assumes the repairs will have to be done to
both DOTPF's and the communities' satisfaction. That bill will
probably be filed by Monday.
Number 615
MR. ROBERT PRUNELLA, City Manager of Wrangell, said the City of
Wrangell concurs with CSSB 111(TRA) and would like to see it
expedited.
MS. SANDRA MOELLER, President and CEO of the Aleut Enterprise
Corporation, expressed support for CSSB 111(TRA) and the amendment
to include work on the Adak. Adak has a fish processor and is
trying to attract small boats. Adak has five to six vessels that
are less than 60 feet but port facilities are limited and were not
set up to accommodate fishing vessels. Adak contributes to the
general fund through its fish and fuel taxes.
MR. CHRIS GATES, also with the Aleut Enterprise Corporation, told
committee members that the U.S. Navy has condemned the small boat
harbor on Adak. A small boat harbor is important to attracting
businesses and families to the community.
MR. MATT ROWLEY, City of Whittier, stated full concurrence with
CSSB 111(TRA) and the amendments as presented.
MR. JOHN BITNEY, legislative liaison for the Alaska Housing Finance
Corporation (AHFC), said SB 111 is a rewrite of a piece of
legislation that passed last year that made various bond
authorizations. The projects in SB 111 are being added to a
section of last year's bill that authorized AHFC to issue general
obligation bonds whereby the repayment of those bonds was to come
from the $50 million dividend that AHFC provides to the state each
year. The bonds authorized in last year's legislation were closed
on February 7. The full $50 million was pledged as the debt
service payment for those bonds out to fiscal year 2007. At this
time, the full capacity of AHFC to issue general obligation bonds
has been completed. The package that was done completed the
capacity that was made available to the state when AHFC first
started doing this in 1998. This was the first time that a housing
authority had gone out and issued bonds backed by its own credit on
behalf of the state government. He repeated the capacity has been
completed at this time and the full amount of funds have been
obligated into the future.
SENATOR TAYLOR said he understood AHFC's fiscal note but he does
not understand how, under last year's legislation, had each of
these communities gone out and bonded themselves, that legislation
provided the mechanism for reimbursement. He asked if AHFC would
not have had any money available to reimburse those communities
until 2007.
MR. BITNEY replied,
The section in the bill that offered reimbursement to the
municipalities was an offer to these municipalities - the
reimbursement was offered from the state general fund.
The reimbursement in this case here was not intended to
come from AHFC. There were two packages of bond projects
in that bill. There were the reimbursements that I just
discussed, as well as the list of projects that were
added to here. So the projects that we're running in
here were ones that were supposed to be reimbursed from
the state general fund, not from the Alaska Housing
Finance Corporation.
SENATOR TAYLOR asked, had the municipalities gone out and bonded
themselves and rebuilt their harbors last year, the legislature
would have to come up with general funds and there would be no
bonding capacity.
MR. BITNEY said that is correct.
SENATOR TAYLOR said, "Well, I guess we got lied to two ways then,
didn't we? Thank you very much. I appreciate your comments John."
Number 24
KURT PARKAN, Deputy Commissioner of the Department of
Transportation and Public Facilities, introduced Harold Moeser,
DOTPF's harbor engineer. Mr. Parkan said DOTPF shares Senator
Taylor's concern and believes the harbors need to be repaired as
soon as possible and transferred to the communities that are
willing to take ownership of them.
TAPE 01-11, SIDE A
MR. PARKAN explained a few differences between CSSB 111(TRA) and SB
118, the Administration's bill. First, the only difference in the
list of harbors in both bills, aside from Adak and Juneau, is the
inclusion of the Yakutat harbor at a cost of $526,000 in SB 118.
Yakutat is willing to take over its harbor if it is fixed. Second,
the funding mechanism in SB 118 is via certificates of
participation. Deven Mitchell, debt manager for the state, can
speak to the details of that method. He noted SB 118 uses the
marine motor fuel tax as a revenue source and issues debt using
certificates of participation for that debt. That debt would be
issued this fall and the money would go to the communities
immediately after that. The projects could be done as early as
next summer. Using a general obligation bond approach would
require a vote of the people in the next general election in 2002
and the bonds would be sold in the following spring. Essentially,
both proposals look at addressing a need that is recognized by
communities.
SENATOR TAYLOR asked if Adak was a military facility that was
conveyed to a Native corporation and whether the state actually
owns that harbor.
MR. MOESER, Ports and Harbors engineer, DOTPF, said the state does
not own it.
SENATOR TAYLOR asked if that presents a unique question as to
ownership and bonding and the capacity of the state to go in and do
the repairs.
MR. MOESER said that is correct in the way SB 111 is written now.
The bill would take some additional language.
SENATOR TAYLOR said he would hold off on making the Adak amendment
at this time to get clarification on the additional language. He
moved a second amendment (Amendment 2) to include $526,000 for the
Yakutat harbor and to change the totals in the bill to reflect that
addition. There being no objection, the motion carried.
SENATOR TAYLOR then made a conceptual amendment (Amendment 3) to
integrate the funding mechanisms for certificates of participation
and utilization of the marine fuels tax into CSSB 111(TRA) as
opposed to the paragraph that begins, "The bond committee shall
issue ...."
SENATOR ELTON objected and asked Mr. Parkan if, in the process of
giving the money that DOTPF raises by issuing certificates of
participation, DOTPF is required to put strings on how that money
is used and whether communities can determine the priorities on the
harbor fixes that are needed.
MR. PARKAN explained that DOTPF would give the communities the
money and ownership and would lease back the facilities until the
debt was paid off, at which point the transfer would take place.
SENATOR ELTON said he is comfortable with DOTPF giving the
communities the money to fix the harbors in the way the communities
see fit. He is less comfortable if DOTPF tells the communities
which projects the money can be spent on.
MR. MOESER said it is DOTPF's intent to transfer the money with as
few strings as possible. Whatever strings the bonds put on DOTPF
will have to be put on the communities. DOTPF needs to have an
interest in the properties in order to pay off the bonds. He
repeated that DOTPF's intent is to transfer the money to the
communities so that they can implement the projects. The basis of
the estimates is on a "shell," meaning that if DOTPF was going in,
that is where they would put the money. However, DOTPF doesn't
care as long as the money goes into the harbors. He stated the
communities do need to establish their priorities and develop their
projects without any interference from DOTPF.
SENATOR ELTON removed his objection to Amendment 3, therefore it
was adopted.
SENATOR TAYLOR thanked Mr. Moeser for the work he has done in the
communities in his district. All of the harbormasters in his
district appreciate the way Mr. Moeser has assisted them.
MR. MARK HICKEY, representing the Aleut Enterprise Corporation and
the community of Adak, told Senator Taylor that the harbor in Adak
is under the control of the Adak Reeves Corporation, which is a
public non-profit corporation set up under the Base Closing Act.
The agreement has the harbor ultimately owned by the community of
Adak. The community will be voting for incorporation in about 10
days and that community is expected to be set up by July. One
other harbor project in the bill is not for a state-owned harbor,
and that is in Nome. That harbor is owned by the City of Nome. SB
118, which includes Adak and Nome, has a mechanism to accommodate
Senator Taylor's concern. Under SB 118, the state would end up
with a lease-hold interest covering the time period of payment of
the debt so that the process of using the certificates of
participation would be legitimate for both Nome and Adak. He
suggested if the committee is supportive of doing the Adak project,
it could treat Adak consistent with the way it is done in SB 118.
He pointed out the concern Senator Taylor is raising is already in
SB 111 because of Nome. Adak is a little different in that the
harbor is expected to be in the city's hands by August. SB 118
does not allow any money to be spent on Adak unless that happens.
SENATOR TAYLOR said with that thought in mind, he offers Amendment
4, and that is to include Adak at $500,000. He said he is
concerned about that number because he doesn't think Mr. Moeser has
had an opportunity to go out and see that harbor to determine the
true cost of that project. He said that number is soft at this
point but he will offer it as an amendment, as well as a conceptual
amendment (Amendment 5) to include the transitional language (from
SB 118) necessary to allow Nome and Adak to receive funds.
CHAIRMAN COWDERY announced, with no objection, Amendments 4 and 5
were adopted.
SENATOR TAYLOR moved CSSB 111(TRA) from committee with individual
recommendations. There being no objection, the motion carried.
CHAIRMAN COWDERY announced that the committee was out of time so he
would hold SB 44 and SB 45 until another hearing. He then
adjourned the meeting.
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