Legislature(2003 - 2004)
05/06/2003 01:25 PM Senate TRA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE TRANSPORTATION COMMITTEE
May 6, 2003
1:25 p.m.
MEMBERS PRESENT
Senator John Cowdery, Chair
Senator Thomas Wagoner, Vice Chair
Senator Gene Therriault
Senator Georgianna Lincoln
Senator Donny Olson
MEMBERS ABSENT
COMMITTEE CALENDAR
SENATE BILL NO. 213
"An Act establishing the Knik Arm Bridge and Toll Authority and
relating to that authority; and providing for an effective date."
MOVED SB 213 OUT OF COMMITTEE
HOUSE BILL NO. 97 am
"An Act authorizing a long-term lease of certain Alaska Railroad
Corporation land at Anchorage that is the subject of Alaska
Railroad Contract No. 8371; and providing for an effective date."
MOVED HB 97 am OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
SB 213 - No previous action to record.
HB 97 - No previous action to record.
WITNESS REGISTER
Mike Barton
Commissioner, Department of Transportation &
Public Facilities
3132 Channel Dr.
Juneau, AK 99801-7898
POSITION STATEMENT: Introduced SB 213
John Bitney
Alaska Housing Finance Corporation
P.O. Box 101020
Anchorage, AK 99510-1020
POSITION STATEMENT: Testified on SB 213
Jerry Ward
No address provided
POSITION STATEMENT: Testified on SB 213
Wendy Lindskoog
Alaska Railroad Corporation
PO Box 107500
Anchorage, AK 99510-7500
POSITION STATEMENT: Testified on SB 213
Representative Vic Kohring
Alaska State Capitol
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor HB 97
Mark Marlow
Coordinator, Alaska Franchise Facilities
No address provided
POSITION STATEMENT: Testified on HB 97
ACTION NARRATIVE
TAPE 02-03-18, SIDE A
CHAIRMAN JOHN COWDERY called the Senate Transportation Committee
meeting to order at 1:25 pm. Present were Senators Gene
Therriault, Georgianna Lincoln, Donny Olson and Chair John
Cowdery. Senator Thomas Wagoner arrived shortly. The first order
of business to come before the committee was SB 213.
SB 213-KNIK ARM BRIDGE AND TOLL AUTHORITY
MIKE BARTON, Commissioner of the Department of Transportation and
Public Facilities (DOTPF), said SB 213 establishes an authority
for the Knik Arm Bridge and Toll Authority. It would be a public
corporation and similar in structure to the Alaska Housing and
Financing Corporation. It would have a three person board
consisting of the commissioners of revenue and transportation and
a public member appointed by the governor to a five year term.
The bill primarily relates to the authority's ability to issue
revenue bonds and establish tolls to finance and build the toll
bridge. The Knik Arm Bridge is an investment in the future of
Alaska and will open residential and industrial land for
development and provide for economic opportunity.
CHAIR JOHN COWDERY advised he hadn't had much time to read and
absorb the bill. He then asked if the public board member would
be confirmed by the Legislature.
COMMISSIONER BARTON advised the bill doesn't require
confirmation.
CHAIR COWDERY asked if there was a requirement for legislative
approval of bonds. He referred to page 10, lines 5-8 and said it
appears that the bonds would have to stand on their own.
COMMISSIONER BARTON said that's correct. The bonds would be
revenue bonds, not general obligation bonds. The toll from the
bridge would be pledged as collateral.
CHAIR COWDERY read from page 9, line 20, "The bonds issued by the
authority do not constitute an indebtedness or other liability of
the state or of a political subdivision of the state other than
the authority," and from line 24 then asked if the Alaska Housing
Authority representative would comment.
SENATOR GENE THERRIAULT asked whether the Legislature had to
grant authorization.
COMMISSIONER BARTON said he didn't believe so, but he needed to
get additional explanation.
SENATOR THERRIAULT said the Legislature periodically increases
the authorization for the Alaska Industrial Development & Export
Authority (AIDEA) and he wasn't sure whether that was the case
for Alaska Housing Finance Corporation (AHFC), but both are an
entity of the state.
COMMISSIONER BARTON said AIDEA needed authorization for certain
types of bonds.
JOHN BITNEY, AHFC liaison, explained the statutes identify AHFC
as a separate legal authority, which is the same as that proposed
in SB 213. The corporation's operating and capital budgets are
subject to legislative approval in the budget process, but the
bonds are issued at the discretion of the board of directors with
the key provision that they are a debt of the corporation and not
of the state.
He noted the bill has a provision that no other authorities have
that he is aware of; the bonds would be subject to review and
approval by the state bond committee. He didn't know whether that
provided a state link or not.
CHAIR COWDERY said the bonds must be scrutinized to ensure
they're a prudent investment whether the state stands behind them
or not. Although he hadn't had time to thoroughly analyze the
bill, he didn't believe there was any intent to obligate the
state.
COMMISSIONER BARTON said the intent was not to obligate the
state.
SENATOR DONNY OLSON asked Mr. Bitney if he saw any need for
increased legislative oversight.
MR. BITNEY replied care should be taken so it is understood that
the authority is selling bonds on its behalf. It's a balance
between oversight and separation and the purpose is to make sure
the authority isn't pledging any debt or obligation on the part
of the state when the bonds are issued. They must be clearly
structured and represented to the bond buyer that they aren't
state obligations.
SENATOR OLSON asked if he meant there wasn't a need for the
Legislature to be overly involved.
MR. BITNEY said, "Not on the approval of the bonds."
COMMISSIONER BARTON said bonds are usually insured so if there
were a default, the bondholders would have recourse to the
insurance company rather than the state.
CHAIR COWDERY asked what other state entities had bonding
authority.
SENATOR THERRIAULT named the Aerospace Development Corporation
and the Alaska Railroad and said some entities have limited
bonding authority.
CHAIR COWDERY noted the bill hadn't had a lot of background work
done, but would move to the Finance Committee.
SENATOR GEORGIANNA LINCOLN expressed the hope that the bill
wouldn't move from committee that day.
CHAIR COWDERY advised he did intend to move the bill that day.
SENATOR LINCOLN said she received the twelve page bill even more
recently than the Chair and because this was the only committee,
other than finance, in which it would be heard, she didn't feel
it was in the public's best interest to move the bill without
taking adequate time to review the provisions and implications.
At this point, she wasn't even sure that all her questions had
been formulated.
With regard to the DOT fiscal note, she asked where the money for
the more than $.5 million 2004 expenditure would come from.
CHAIR COWDERY replied, "Whatever it costs, the seed money is to
try to get the federal money. That's behind all this...."
COMMISSIONER BARTON added this is one of the governor's highest
priorities for Congressman Young to earmark federal funds for and
he feels confidant federal funds will be forthcoming.
CHAIR COWDERY said he has been working on the Knik Arm Crossing
project for several years and is very enthusiastic.
SENATOR THERRIAULT noted the fund source for the $523,700 was
listed as "Other (CIP Receipts)" and he questioned why that is if
federal money is anticipated.
COMMISSIONER BARTON replied "Other (CIP Receipts)" includes
federal monies, but he would get clarification for that.
SENATOR THERRIAULT asked if it was correct that he did not expect
any general fund dollars being used for operation of the bridge.
COMMISSIONER BARTON explained that Congressman Young was working
to earmark the funds in the reauthorization of the highway bill.
CHAIR COWDERY opined the Transportation Committee was charged
with approving the concept of establishing the authority and
financial questions were not their purview.
SENATOR THERRIAULT asked if the bridge would start at the Port of
Anchorage as indicated by a photo in his packet.
COMMISSIONER BARTON said they were a long way from deciding the
specifics, but the concept they have been working with shows the
crossing to be farther up the arm where the water is not as deep.
A long span bridge going from shore to shore and a short span
bridge with a causeway on each shore were both under
consideration. There is a large cost differential between the
13,000 foot long-span concept and the 9,500 foot short-span
concept.
CHAIR COWDERY advised he included the photo and map for
conceptual purposes only; they weren't intended to be specific.
COMMISSIONER BARTON advised they were a long way from identifying
the crossing site or the structure itself. Considerable geo-
technical work would be done before deciding on the location and
type of foundation.
CHAIR COWDERY said they are currently modeling a Corp of
Engineers project in Mississippi to check on tides and current
and determine what affect a causeway to Fire Island might have.
SB 213 simply establishes the authority to work out the
specifics.
COMMISSIONER BARTON agreed.
SENATOR LINCOLN said she had a number of questions and asked if
it was correct that SB 213 asked for the authority to put
together a board of three members and staff.
COMMISSIONER BARTON said it authorizes the staffing and gives
power to the authority to bond and collect tolls and revenues.
SENATOR LINCOLN whether an EIS [Environmental Impact Statement]
had been completed.
COMMISSIONER BARTON advised it is ongoing and part of the
process.
CHAIR COWDERY remarked an EIS was completed in 1984 and it is
being updated.
COMMISSIONER BARTON stated an EIS from 1984 has credibility
difficulties and a full EIS would be completed on the project.
SENATOR LINCOLN commented it appeared as though the cart was
before the horse. Prior to completion of the EIS, the bill
allocates over $500,000 to establish a board to oversee the
project. She questioned the point at which the Legislature would
receive a status report.
COMMISSIONER BARTON said the bill provides for an annual report
from the authority and there would certainly be a report when the
EIS was completed.
SENATOR LINCOLN referred to a November 27, 2002 article in which
a Mat-Su planner expressed skepticism for the project and asked
for the Commissioner's response and whether the Mat-Su Borough
had taken a position on the project.
COMMISSIONER BARTON understood the Mat-Su Borough had passed a
resolution in support of the project. Not knowing the root of the
planer's skepticism he was unable to respond to that. Certainly
there were challenges associated with the project, but he thought
it would was a long-term investment in Alaska's future.
SENATOR LINCOLN asked whether the Anchorage Assembly added a Knik
Arm Crossing study to their long-range transportation plans.
COMMISSIONER BARTON replied he didn't know, but the authority
would be expected to gather various independent studies in an
effort to cut down on duplication and provide a coordinated
effort.
SENATOR LINCOLN asked whether the Anchorage Assembly supported
the project.
CHAIR COWDERY said they were in strong support.
SENATOR LINCOLN asked if she could get copies of supporting
letters.
SENATOR OLSON asked when construction might begin since
approximately $500,000 was budgeted for planning for each of the
next six years.
COMMISSIONER BARTON said the design work would be extensive due
to the size of the project, but possibly as early as 2006 or
2007.
CHAIR COWDERY said Senator Jerry Ward wanted to give testimony as
an interested party.
SENATOR JERRY WARD testified via teleconference in support of SB
213. He said the first meeting he attended on the Knik Arm
Crossing was in 1956 and he applauded Governor Murkowski and
Congressman Young on their efforts. He gave a brief history of
the concept and expressed the view that the climate for starting
the project was the best he had seen to date.
CHAIR COWDERY advised he would get the resolution from the
Anchorage Assembly as Senator Lincoln requested. He said the
military had expressed concern for an arch bridge to accommodate
their height needs and that the bridge not conflict with the
runway and create lighting confusion for both operations.
Ultimately he envisions a twin city concept and that tax revenues
from across Knik Arm might be shared with Anchorage.
SENATOR THOMAS WAGONER asked if there was a cost analysis on the
entire project and how long it might take to pay off the revenue
bonds by running a toll bridge.
COMMISSIONER BARTON said no such analysis had been done; it would
be a function of the proposed authority to do so. He agreed that
it would take a long time to pay off the bonds, but there is
renewed interest in toll roads and it is understood that they are
large expenditures that take a long time to pay off. However,
once they are paid off they tend to be quite lucrative.
SENATOR THERRIAULT referred to page 12, lines 1 through 5 and
noted the activity would be exempt from local regulation. He
asked what interaction would be required with local government.
COMMISSIONER BARTON said he asked that the legislation include a
provision that consultation with the mayors of both Anchorage and
the Mat-Su Borough be incorporated.
CHAIR COWDERY advised both mayors have been very supportive of
the concept.
COMMISSIONER BARTON added the crossing would benefit the Alaska
Railroad assuming the bridge was built to include rails.
SENATOR THERRIAULT noted page 5, lines 18 to 20 refers to
coordination with the mayors of the Municipality of Anchorage and
the Matanuska-Susitna Borough, but the last page says they
wouldn't be able to use their local planning and zoning powers to
obstruct the project.
SENATOR LINCOLN said there were recent [February 2003] articles
in which Senator Ted Stevens spoke about operating a ferry and
that he would secure funding. She asked where that idea lay
within the overall concept of a bridge.
COMMISSIONER BARTON replied Senator Stevens is very supportive of
the Knik Arm Crossing. He wasn't sure what happened to the ferry
concept.
2:20 pm
SENATOR LINCOLN said she recalled discussion regarding commuter
rail service to the Mat-Su and wondered if the railroad saw a
downside to having the bridge or was this part of their plan.
COMMISSIONER BARTON replied the crossing concept did not begin at
the railroad level and the bridge could be built to support the
railroad or strictly as a highway structure. He couldn't say how
the crossing would impact their operation even though he sits on
their board and knows they want to make the most efficient use of
their staff and be able to deliver goods to and from Anchorage as
quickly as possible. He thought the railroad was generally
supportive of the bridge and didn't believe it would affect their
commuter service from the Mat-Su area.
SENATOR LINCOLN asked if it was unusual that the board would be
comprised of governor appointees in the form of two commissioners
and one public member.
COMMISSIONER BARTON replied the Alaska Railroad and AIDEA Boards
are appointed.
SENATOR LINCOLN pointed out those commissioners didn't comprise a
controlling interest as they would in the proposed board.
CHAIR COWDERY said the board was not a fulltime board and once it
was established, an executive director would be added to run the
operation.
SENATOR LINCOLN stated for the record a board sets policy and the
executive director works for the board.
SENATOR OLSON asked if there was any plan to redirect the
railroad in that direction once the bridge is built.
CHAIR COWDERY said there is a study of the area from Palmer to
Fort Mackenzie.
WENDY LINDSKOOG, director of external affairs for the Alaska
Railroad Corporation, stated there are several studies she could
cite: the City of Wasilla studied relocating the railroad around
the city and the Mat-Su Borough is looking at bringing the
railroad from the Houston area and tying into Port Mackenzie.
Neither study was sponsored by the railroad, but they have been
lending technical support.
If they were to tie into the Knik Arm Crossing they still believe
there would be a need for the current line. Much of the gravel
they haul comes from Palmer and they would continue to use that
line. If the communities of Mat-Su Borough and Anchorage decided
they wanted commuter rail service that would be another use for
the current line.
She addressed Senator Lincoln's question to say they do support
the crossing, but feel that if the bridge is built without rail
the vision is short sighted in terms of making a most efficient
railroad. Tying the railroad in with the crossing would enable
them to get to Fairbanks in twelve hours meaning no crew shift
would be required. The current practice of trading crews in Healy
is a huge expense.
CHAIR COWDERY noted Mr. Gamble had been to all meetings on the
subject and was very supportive. He asked for the name of the
commission on which he served.
MS. LINDSKOOG said it was the Regional Transportation Planning
Organization and was a combination of members from the Mat-Su
Borough and the municipality of Anchorage. She thought the Knik
Arm Crossing was one of its highest priority projects.
2:30 pm
SENATOR LINCOLN asked how the infrastructure would be paid for
and how that would impact general fund dollars.
COMMISSIONER BARTON said they anticipate most of the project to
be financed with federal highway monies.
SENATOR LINCOLN asked about remarks made about opening up an area
for an expanded community. Because this would entail building
roads and water and sewer systems and schools and an entire
infrastructure, she asked what that general fund impact would be
and when the expenditures might start.
COMMISSIONER BARTON replied that sort of infrastructure expansion
would evolve just as it has elsewhere. There would be additional
demands, but the increased tax base would likely help meet the
demand.
CHAIR COWDERY stated Anchorage developers put in sewer and water
systems, pave the streets, and hope for reimbursement as a
development goes forward.
SENATOR WAGONER noted the bill mentioned revenue bonds several
times and he wondered whether they would be sold to come up with
the state match for the federal funds Congressman Young was
seeking.
COMMISSIONER BARTON replied they could be used for that purpose.
SENATOR WAGONER asked what kind of impact this project would have
on the statewide highway program.
COMMISSIONER BARTON anticipated the crossing itself would result
from earmarked federal funds. The approach roads may have some
impact on the highway program, but they hope to keep it to a
minimum. He added there is $8 billion in identified need in the
state and progress is slow.
SENATOR THERRIAULT made a motion to move SB 213 and attached
fiscal note to the Finance Committee.
SENATOR LINCOLN objected to the motion. She restated her position
that this is a major piece of legislation and she objected to the
committee pushing it through so quickly. There wasn't adequate
time taken to evaluate the impacts and the public didn't have
enough opportunity to comment.
CHAIR COWDERY called for a roll call. The motion passed with
Senators Wagoner, Therriault, Olson and Chair Cowdery voting aye
and Senator Lincoln voting nay.
HB 97-LONG-TERM LEASES OF ALASKA RR LAND
VIC KOHRING, bill sponsor, explained the bill extends the lease
of a piece of railroad leased land on Government Hill in
Anchorage from 55 to 75 years. An Anchorage developer wants to
build senior housing on the land and needs to have a 75 year
lease to receive federal grant money. The railroad is only able
to give him a 55 year lease, but HB 97 would provide legislative
approval for the 20 year extension. It would authorize the
railroad board to offer the extension at their discretion. He
added there would be no state funds involved; HUD 202 grant money
would be used.
CHAIR COWDERY said he understands the railroad couldn't extend
the lease without legislative approval.
REPRESENTATIVE KOHRING agreed and added the developer must have
the application in by June 13, 2003.
MARK MARLOW, contractor and facilitator for Alaska Franchise
Facilities, testified via teleconference to say the lease on the
property began in September 2002.
CHAIR COWDERY asked how much money the project would inject into
the Anchorage economy.
MR. MARLOW said there would be a $3.7 million grant for 20 units.
CHAIR COWDERY asked if it was true that the railroad could stop
the project even if the Legislature granted them the authority to
extend the lease.
MR. MARLOW said that was correct. The railroad board considered a
resolution at the last meeting and authorized the extension of
the lease subject to passage of HB 97 and the acquisition of the
grant.
SENATOR GEORGIANNA LINCOLN remarked the committee heard the same
legislation in SB 153 and asked if there was anything other than
a title change and the upward limit that was different.
REPRESENTATIVE KOHRING said he didn't believe so.
SENATOR LINCOLN asked what the title meant when it referred to
Alaska Railroad Contract No. 8371.
WENDY LINDSKOOG, director of external affairs for the Alaska
Railroad Corporation, explained contract 8371 refers very
specifically to the current lease the railroad has with Mr.
Marlow and eliminates the need to list the legal description.
SENATOR THOMAS WAGONER asked what would happen to Mr. Marlow's
lease if he weren't successful and is his lease predicated on the
extension of time on the lease and this specific project.
MS. LINDSKOOG replied Mr. Marlow currently has a 55 year lease
with the railroad and he would continue to have that lease
whether the HUD financing comes through or not. The current lease
document says multi-family housing units would be built so it
would be that or senior housing.
SENATOR WAGONER said he remembers previous public complaint
regarding the quality of housing. $3.7 million for 20 units
translates to $185,000 per unit so you would expect the units to
be quite nice.
SENATOR LINCOLN noted the committee heard from the Government
Hill Community Council previously and they objected to the
project. She asked if there was continuing objection now that
changes had been made.
REPRESENTATIVE KOHRING replied there probably was continuing
objection. He isn't sure what their objections are specifically,
but if the developer doesn't get his federal grant he'll use the
55 year lease to build a different facility. That would likely
result in a more dense type facility.
He noted the House passed a letter of intent to encourage the
parties to work together.
SENATOR LINCOLN applauded Representative Kohring for being one of
the sponsors of the letter of intent.
SENATOR WAGONER motioned to move HB 97 am version \H.A from
committee with individual recommendations. There being no
objection, it was so ordered.
There being no further business to come before the committee,
Chair Cowdery adjourned the meeting at 2:45 pm.
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