Legislature(2009 - 2010)Anch LIO Conf Rm

09/26/2009 01:00 PM Senate TRANSPORTATION


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01:05:47 PM Start
01:06:58 PM Interaction Between the Anchorage International Airport and the Surrounding Community
03:43:10 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Teleconference 1:00 to 3:00 pm --
Location: Room 220 Anchorage LIO
Subject: Interaction of the Anchorage
International Airport and the Surrounding
Community
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE TRANSPORTATION STANDING COMMITTEE                                                                          
                         ANCHORAGE, AK                                                                                        
                       September 26, 2009                                                                                       
                           1:05 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                              
                                                                                                                                
Senator Albert Kookesh, Chair                                                                                                   
Senator Linda Menard, Vice Chair                                                                                                
Senator Bettye Davis                                                                                                            
Senator Kevin Meyer                                                                                                             
Senator Joe Paskvan via teleconference                                                                                          
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
Interaction between the Anchorage International Airport and the                                                                 
Surrounding Community                                                                                                           
     HEARD                                                                                                                      
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to report.                                                                                                   
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
CHRISTINE KLEIN, Deputy Commissioner and                                                                                        
Acting Airport Director                                                                                                         
Ted Stevens Anchorage International Airport                                                                                     
Department of Transportation and Public Facilities                                                                              
Anchorage, AK                                                                                                                   
POSITION STATEMENT:  Delivered a PowerPoint presentation on the                                                               
Alaska International Airports System and responded to questions.                                                                
                                                                                                                                
JOHN PARROT, Airport Manager                                                                                                    
Ted Stevens Anchorage International Airport                                                                                     
Anchorage, AK                                                                                                                   
POSITION STATEMENT:  Provided information and responded to                                                                    
questions about the relationship between the Ted Stevens                                                                        
Anchorage International Airport and the surrounding community.                                                                  
                                                                                                                                
LISSA WRIGHT, Board Member                                                                                                      
Country Lane Estates Homeowners Association                                                                                     
Anchorage, AK                                                                                                                   
POSITION  STATEMENT:   Asked for  cooperation  from the  Anchorage                                                            
airport to reduce future impact on the subdivision.                                                                             
                                                                                                                                
MERLE AKERS, representing himself                                                                                               
Anchorage, AK                                                                                                                   
POSITION  STATEMENT:   Described communication  problems with  the                                                            
Anchorage airport and the public.                                                                                               
                                                                                                                                
CECILIA PREZIOSE, representing herself                                                                                          
Anchorage, AK                                                                                                                   
POSITION  STATEMENT:   Questioned how  low planes  are allowed  to                                                            
fly over residential areas.                                                                                                     
                                                                                                                                
HARRIET DRUMMOND, Vice Chair                                                                                                    
Anchorage Municipal Assembly                                                                                                    
Anchorage, AK                                                                                                                   
POSITION  STATEMENT:   Described  communication  problems  between                                                            
the Anchorage airport and the public.                                                                                           
                                                                                                                                
CHRIS HABICHT, representing himself                                                                                             
Anchorage, AK                                                                                                                   
POSITION STATEMENT:   Testified  that the Anchorage  airport needs                                                            
to expand its mission statement to accommodate community goals.                                                                 
                                                                                                                                
MARK WIGGIN, Board Member                                                                                                       
Turnigan Community Council                                                                                                      
Anchorage, AK                                                                                                                   
POSITION  STATEMENT:    Questioned  the  efficacy  of  the  public                                                            
process with respect to the Anchorage airport.                                                                                  
                                                                                                                                
CATHY GLEASON, Board Member                                                                                                     
Turnigan Community Council                                                                                                      
Anchorage, AK                                                                                                                   
POSITION STATEMENT:   Highlighted  communication problems  between                                                            
the Anchorage airport and the community.                                                                                        
                                                                                                                                
DAVID MCCARGO, representing himself                                                                                             
Anchorage, AK                                                                                                                   
POSITION  STATEMENT:    Testified   about  communication  problems                                                            
between the Anchorage airport and the community.                                                                                
                                                                                                                                
TYLER ROBINSON, Planning Department                                                                                             
Municipality of Anchorage                                                                                                       
Anchorage, AK                                                                                                                   
POSITION   STATEMENT:     Testified  that   the  municipality   is                                                            
undertaking  the West  Anchorage  District Plan  to address  long-                                                              
standing issues.                                                                                                                
                                                                                                                                
RUSS SINGLETON, representing himself                                                                                            
Anchorage, AK                                                                                                                   
POSITION  STATEMENT:   Testified  that in  the past  communication                                                            
with the Anchorage airport has been poor.                                                                                       
                                                                                                                                
LINDA SWISS, representing herself                                                                                               
Anchorage, AK                                                                                                                   
POSITION   STATEMENT:     Testified   about   direct  impacts   to                                                            
homeowners related to development at the Anchorage airport.                                                                     
                                                                                                                                
KEITH DAY, Controller                                                                                                           
Alaska International Airport System                                                                                             
Department of Transportation and Public Facilities                                                                              
Anchorage, AK                                                                                                                   
POSITION  STATEMENT:  Testified  that the  facility fee  collected                                                            
by the airlines is not a true head tax.                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
1:05:47 PM                                                                                                                    
CHAIR  ALBERT KOOKESH  called the  Senate Transportation  Standing                                                            
Committee meeting  to order  at 1:05  p.m. Senators Meyer,  Davis,                                                              
Menard,  Paskvan (via  teleconference), and  Kookesh were  present                                                              
at  the call  to order.  Representatives Buch,  Doogan, and  Homes                                                              
also attended the meeting.                                                                                                      
                                                                                                                                
 ^Interaction between the Anchorage International Airport and the                                                           
                     Surrounding Community                                                                                  
                                                                                                                              
                                                                                                                                
1:06:58 PM                                                                                                                    
CHAIR KOOKESH  announced the business  before the committee  is to                                                              
hear about  how the  Ted Stevens  Anchorage International  Airport                                                              
interacts  with  the  surrounding  community.  The  administration                                                              
will   deliver   a   PowerPoint   presentation   on   the   Alaska                                                              
International  Airport  System,  legislators will  ask  questions,                                                              
and the public will comment.                                                                                                    
                                                                                                                                
1:07:48 PM                                                                                                                    
CHRISTINE   KLEIN,  Deputy   Commissioner,   and  Acting   Airport                                                              
Director,   Ted    Stevens   Anchorage   International    Airport,                                                              
Department  of Transportation  and  Public Facilities,  introduced                                                              
her team members.                                                                                                               
                                                                                                                                
MS. KLEIN  informed the  committee that  the Alaska  International                                                              
Airport   System  (AIAS)   is  an   enterprise   system.  It   was                                                              
established in  1964 and  is comprised of  both the  Fairbanks and                                                              
Anchorage  airports.  The  Anchorage airport  is  state-owned  and                                                              
operated, which  is unusual  in the  airport industry.  The system                                                              
was  established  to ensure  that  major  state assets  serve  the                                                              
regions  beyond the  community hub.  As hubs  they play  important                                                              
roles  in the  national transportation  system.  Anchorage is  the                                                              
number  one  cargo-landed-weight  airport  for North  America  and                                                              
number five in the world.                                                                                                       
                                                                                                                                
MS. KLEIN  described how  the two  airports supported  one another                                                              
and helped  to increase  international air transportation  between                                                              
the  '60s  and '80s.  Initially  most  of  the business  was  from                                                              
international passenger  travel but that stopped  abruptly in 1992                                                              
when Russian airspace  opened. Fortunately for the  airport, cargo                                                              
flights  increased  at  about  the  same  time.  That's  when  the                                                              
community  began  to  see  growth  in the  northern  part  of  the                                                              
airport.  Over  the past  15  years  cargo  traffic has  been  the                                                              
primary focus of the Anchorage airport.                                                                                         
                                                                                                                                
1:14:30 PM                                                                                                                    
MS. KLEIN displayed  two line graphs to show  the five-year trends                                                              
for the  Alaska International  Airport System  for FY06-FY10.  The                                                              
first  graph  shows  combined  passenger  and  cargo  certificated                                                              
maximum gross takeoff  weight (CMGTW). This is  where the majority                                                              
of the revenue comes  from in the system. In 2006  they started to                                                              
see  fuel  decreases,  which  is  the  first  sign  of  change  in                                                              
aircraft weight  and traffic.  Cargo flattened  and then  began to                                                              
drop  in  2007.  In 2008  there  was  a  23 percent  drop  in  the                                                              
combined  passenger and  cargo traffic,  which  was compounded  by                                                              
the recession and  high fuel costs. This was  significant. Traffic                                                              
came  to a  complete stop  in 2009  when the  volcano spewed  ash.                                                              
These trends  are alarming. The  second graph shows that  over the                                                              
same period  passenger enplanements  were relatively  stable until                                                              
May 2009 when they declined by 20 percent.                                                                                      
                                                                                                                                
FY09  saw  a  23  percent or  10  million  ton  drop  in  combined                                                              
cargo/passenger  CMGTW, which  equates to  a $2  million loss  for                                                              
March  and  April.  On average  revenue  decreased  $1.7  million.                                                              
Passenger  enplanements  were relatively  stable  largely  because                                                              
Alaska relies so heavily on aviation as a means of travel.                                                                      
                                                                                                                                
1:18:10 PM                                                                                                                    
MS. KLEIN  highlighted that United  Airlines pulled out  of Alaska                                                              
in 2008,  which resulted in  a loss of  35 jobs to  the community.                                                              
Delta and  Northwest airlines have  merged meaning  that Northwest                                                              
will  cease doing  business  in  Alaska. Delta  reduced  passenger                                                              
service to Fairbanks  altogether. This has resulted  in layoffs in                                                              
ground support  at the airport. AIAS  has had a hiring  freeze for                                                              
more  than two  years, which  prevented some  large layoffs.  Last                                                              
spring  there  were  9 layoffs  and  55  positions  are  currently                                                              
vacant. The  AIAS budget  has been reduced  by seven  percent over                                                              
the last  two years.  This situation has  been difficult  but AIAS                                                              
is doing better than most Lower 48 airports.                                                                                    
                                                                                                                                
1:20:59 PM                                                                                                                    
Bright spots for the Anchorage airport include:                                                                                 
    · Adding three new international cargo carriers: Yangtze                                                                    
      River Express, Great Wall, and Quantas.                                                                                   
    · Air carriers and their signatory board have approved                                                                      
      implementation  of the first  incentive program  to increase                                                              
      Asia  Pacific passenger  service to  Alaska. China  Airlines                                                              
      now  offers  four  weekly   flights  between  Anchorage  and                                                              
      Taipei.                                                                                                                   
    · Japan Airlines offers three more flights than in 2008.                                                                    
    · Being a top performer in concession sales.                                                                                
                                                                                                                                
1:22:23 PM                                                                                                                    
REPRESENTATIVE HOLMES asked what form the incentives take.                                                                      
                                                                                                                                
MS. KLEIN explained  that up to  $1 million in rates and  fees are                                                              
waived once an  airline has met its contractual  obligations. That                                                              
program  started in  either June  or July.  Other changes  include                                                              
adding McDonalds as  a concessionaire and opening the  new A and B                                                              
concourse on November 1.                                                                                                        
                                                                                                                                
MS.  KLEIN said  they  are  most proud  that  after  a three  year                                                              
holdover,  the   airlines  have  committed  to  a   new  operating                                                              
agreement.  It was  signed  in February  and  adds  five more  air                                                              
carriers  that are  committed  to  funding airport  operating  and                                                              
capital costs for  the next five years. The new  agreement focused                                                              
on  a  business   model  approach  where  air   carriers,  airport                                                              
tenants,  and other  users  pay  for what  they  use.  It is  more                                                              
equitable.  Also,  more  accountability  has  been  instituted  on                                                              
projects and  capital programs. There  is a commitment to  be more                                                              
competitive.  It was  a strong  show of  support for  the AIAS  to                                                              
sign the  operating agreement  at the worst  time in  the aviation                                                              
industry's history.                                                                                                             
                                                                                                                                
The capital improvement  program (CIP) for the next  five years is                                                              
a  modest $177.4  million.  Most projects  have  been deferred  or                                                              
canceled  due to a  lack of  funds and  high debt. The  priorities                                                              
are  to  maintain  the  existing   system  and  renovate  existing                                                              
runways and  facilities. A fourth  runway is not on  the five-year                                                              
horizon.                                                                                                                        
                                                                                                                                
1:26:19 PM                                                                                                                    
MS. KLEIN  pointed out that  the state operated  Anchorage airport                                                              
is  part  of   the  national  priority  system   of  international                                                              
airports. It is  located within the Municipality  of Anchorage and                                                              
is under  complex federal regulation.  Developers have  raised the                                                              
concern  that  adding  more  processes   might  drive  away  their                                                              
business.  In the  last year  and  a half  there were  no bids  on                                                              
three opportunities, but that may be due to the weak economy.                                                                   
                                                                                                                                
Marketing plans include:                                                                                                        
   · Discussions   with   a  European   carrier   for   year-round                                                              
     international  passenger  service  and  with  three  domestic                                                              
     carriers  for passenger  service.  They are  waiting for  the                                                              
     economy to improve.                                                                                                        
   · Marketing  partnerships  with  local convention  and  visitor                                                              
    bureaus, economic development corporations, and others.                                                                     
   · Participation   at   both   the   Beijing   and   Hong   Kong                                                              
     international cargo conferences and trade shows.                                                                           
                                                                                                                                
MS.  KLEIN   named  the   members  of   the  marketing   team  and                                                              
highlighted  that even though  this is  a state enterprise  system                                                              
it is also a business that is required to operate like one.                                                                     
                                                                                                                                
1:29:21 PM                                                                                                                    
MS.  KLEIN   said  the   Anchorage  airport  communications   plan                                                              
involves  keeping the  public updated  on  airport activities  and                                                              
developments. This includes:                                                                                                    
   · Developing  an airport  master plan.  This is  a huge  public                                                              
     process  that  is  usually  done  every  five  years  and  is                                                              
     ongoing for  several years. In 2002 the last  official master                                                              
     plan was  done and  it included 52  public meetings.  In 2006                                                              
     the airport  worked on  a new master  plan for 16  months; 67                                                              
     public meetings  were held  and five newsletters  were issued                                                              
     before the process was terminated last fall.                                                                               
   · Construction meetings.  These are held at least  once a year,                                                              
     but  runway   extensions  and  renovation   projects  require                                                              
     additional meetings.                                                                                                       
   · Serving  on  boards  and commissions.  She  and  the  airport                                                              
     manager regularly participate.                                                                                             
   · Holding   quarterly  stakeholder   meetings  with   community                                                              
     members. The last meeting was held two weeks ago.                                                                          
   · Meeting with community councils to give updates on projects                                                                
     that  might   impact  the   community.  The  three   adjacent                                                              
     communities  are   Turnigan,  Spenard,  and   Sand  Lake.  "I                                                              
     typically  have  someone  from  the airport  also  attend  to                                                              
     answer question or give updates and briefings."                                                                            
   · Tenant updates are required if a development is planned.                                                                   
     This is required on top of the city's building permit                                                                      
     process.                                                                                                                   
   · Environmental and noise managers actively participate and                                                                  
     monitor the airport noise hotline.                                                                                         
                                                                                                                                
1:32:04 PM                                                                                                                    
MS.  KLEIN  said  the  airport's  economic  impact  to  the  local                                                              
community  is more  than 18,000  jobs and $562  million in  direct                                                              
annual payroll. The  statewide aviation impact is one  in ten jobs                                                              
throughout  the state  and $3.5  billion or eight  percent  of the                                                              
gross state product (GSP).                                                                                                      
                                                                                                                                
The  top priority  in  planning  for the  future  is  to keep  the                                                              
current  aviation   businesses.  The   Anchorage  airport   is  an                                                              
economic  engine and  as  such it  has  to be  competitive,  which                                                              
means holding  rates and  fees stable. They've  done that  for two                                                              
years  despite the  economic downturn.  The  Fairbanks airport  is                                                              
part of  what makes  the AIAS  competitive so  traffic isn't  lost                                                              
during  another  volcano eruption.  There  is  also an  effort  to                                                              
establish  alliances with  other  airports and  to be  cooperative                                                              
and welcome to new businesses.                                                                                                  
                                                                                                                                
In closing  Ms. Klein said  the Anchorage airport  takes seriously                                                              
its  commitment  for  responsible  development.  "We  do  feel  we                                                              
operate  in  an open  and  transparent  environment with  all  the                                                              
meetings  that  we've  held. …  We  hope  and  trust that  we  can                                                              
continue  to  meet  with  our neighbors  and  keep  them  informed                                                              
despite the many cuts that we have made."                                                                                       
                                                                                                                                
1:36:38 PM                                                                                                                    
JOHN PARROT, Airport  Manager, Ted Stevens  International Airport,                                                              
Anchorage, read the following into the record:                                                                                  
                                                                                                                                
     The  question  being  asked  today  is,  'What  kind  of                                                                   
     neighbor  is  the Ted  Stevens  Anchorage  International                                                                   
     Airport?'  At  over 4,600  acres  one answer  would  be,                                                                   
     'Big.'  Despite   the  size  of  the  airport   and  the                                                                   
     potential   to  act  like   the  proverbial  800   pound                                                                   
     gorilla,   airport  management   believes   we  have   a                                                                   
     responsibility   to   manage   the   airport   and   its                                                                   
     development  in  an efficient,  effective,  sustainable,                                                                   
     and  responsible  manner.   As  a  generator  of  noise,                                                                   
     exhaust,  and  lots and  lots  of jobs,  we  continually                                                                   
     strive  to  balance  airport  development  to  meet  the                                                                   
     needs of  our tenants and  customers with the  desire to                                                                   
     minimize    negative   impact    on   the    surrounding                                                                   
     communities.                                                                                                               
                                                                                                                                
     Clearly,  if   one  takes  an  absolute   approach,  the                                                                   
     airport will  never be successful.  If we develop  blind                                                                   
     to the  wishes of the community,  we would be  at fault.                                                                   
     If  we  abdicate  control  of the  airport  to  a  vocal                                                                   
     minority that  wants to oppose development,  we would be                                                                   
     at fault  and in violation  of our understanding  of the                                                                   
     FAA grant assurances.                                                                                                      
                                                                                                                                
     What  has the  airport done  in the past  to attempt  to                                                                   
     communicate  with  the surrounding  communities?  During                                                                   
     the past  two master planning  efforts, over  100 public                                                                   
     meetings   were  held  attempting   to  solicit   public                                                                   
     opinions, public  input, and to inform them  of possible                                                                   
     future development.                                                                                                        
                                                                                                                                
     Most  significant  projects  at the  airport  require  a                                                                   
     NEPA    process    that   includes    required    public                                                                   
     involvement.  One recent  example  where  this has  been                                                                   
     very  successful,  in  our   opinion,  is  the  upcoming                                                                   
     seven-right  extension. Thanks  to active engagement  by                                                                   
     the  recreational  users  of   the  area  that  will  be                                                                   
     impacted,  compromises have been  reached that  meet the                                                                   
     needs of  the airport as  well as minimize  the negative                                                                   
     impact  to the  trail system  - and in  some areas  even                                                                   
     potentially  improved the trails.  This appears  to have                                                                   
     truly been a win-win project.                                                                                              
                                                                                                                                
     Outside of these  required efforts, the airport  hosts a                                                                   
     construction preview  for the public each  spring. While                                                                   
     the  emphasis in  the past  has been on  projects to  be                                                                   
     constructed  in  the  upcoming   summer,  we  heard  the                                                                   
     public asking  us to give  them a longer range  preview.                                                                   
     So  we have  now  begun  previewing projects  that  will                                                                   
     happen in  the next one  to two to  three years  to give                                                                   
     them   more   warning   and   heads-up.   Unfortunately,                                                                   
     attendance  at these  meetings has been  very, very  low                                                                   
     and I would  welcome suggestions as to how  to make them                                                                   
     more useful and more informative.                                                                                          
                                                                                                                                
     The  airport…staff  regularly  attends  the  Sand  Lake,                                                                   
     Turnigan,  and   Spenard  community  council   meetings.                                                                   
     While  we  do  not attempt  to  attend  each  and  every                                                                   
     meeting,  we do  ask to  be put  on the  agenda when  we                                                                   
     feel there is  some activity at the airport  that should                                                                   
     be  explained or  if there  are  questions and  concerns                                                                   
     from the  community council  members. We also  use email                                                                   
     to communicate  with the community  councils as  well as                                                                   
     individual community members whenever we are queried.                                                                      
                                                                                                                                
     A  year or  so  ago, at  the request  of  the Sand  Lake                                                                   
     Community  Council  president,   we  participated  in  a                                                                   
     focus  group   to  drill  down  deeper   into  improving                                                                   
     communications  with that  community  council. That  has                                                                   
     since been terminated.  We have offered to  continue the                                                                   
     effort  but  the current  Sand  Lake  Community  Council                                                                   
     president   has  informed  us   he  doesn't  feel   it's                                                                   
     necessary.                                                                                                                 
                                                                                                                                
     This  summer  we met  with  city leaders  and  discussed                                                                   
     communication   with   the    surrounding   communities.                                                                   
     Assemblyman Claman  proposed another attempt  at a focus                                                                   
     group  involving all  three  of the  community  councils                                                                   
     surrounding  the  airport.  We  gladly  agreed  and  the                                                                   
     first meeting  of that group  was held on September  23,                                                                   
     this week.                                                                                                                 
                                                                                                                                
     Finally, as  we examine the  role of the airport  in the                                                                   
     community  I would ask  that you  not only consider  the                                                                   
     impact  of the airport  on the  Sand Lake, Spenard,  and                                                                   
     Turnigan   communities,  but   also  on  the   Hillside,                                                                   
     Fairview,  and Mount  View  - and  other communities  in                                                                   
     Anchorage  where  residents  live who  depend  on  their                                                                   
     jobs  at  the  airport.  That   job  impact  extends  to                                                                   
     Girdwood,  Wasilla,  and  Palmer.   The  impact  of  the                                                                   
     airport  doesn't stop  there.  By providing  the  needed                                                                   
     infrastructure, the  airport allows goods and  people to                                                                   
     access  rural  Alaska. The  impact  of this  airport  is                                                                   
     felt  in Bethel,  Aniak, and  Emmonak  - and  throughout                                                                   
     Alaska.  The  needs of  those  Alaskans should  also  be                                                                   
     considered   when   it   comes   to   possible   airport                                                                   
     development.                                                                                                               
                                                                                                                                
     In  conclusion, the  airport  fully  recognizes that  we                                                                   
     have  a  responsibility  to  take  the  input  from  and                                                                   
     seriously consider  needs and desires of  the community.                                                                   
     We ask the  community to consider that the  airport also                                                                   
     has other  responsibilities and work  with us to  try to                                                                   
     reach  solutions  that are  acceptable  to all  even  if                                                                   
     they  don't satisfy  anyone. Sadly,  that is the  nature                                                                   
     of compromise.  If anyone has any suggestions  as to how                                                                   
     we  can better  engage the  community,  I would  welcome                                                                   
     them. Or  if you have any  question I would be  happy to                                                                   
     try to answer them.                                                                                                        
                                                                                                                                
1:41:14 PM                                                                                                                    
CHAIR  KOOKESH   recognized  that  Representative   Gruenberg  had                                                              
joined the meeting.                                                                                                             
                                                                                                                                
SENATOR MEYER,  noting that the  airport receives lots  of federal                                                              
money, asked  how much influence  the federal government  has over                                                              
airport  operations. He  also asked  if the  airport was  eligible                                                              
for any stimulus funds.                                                                                                         
                                                                                                                                
MS. KLEIN  replied the  federal government  is involved  in nearly                                                              
all airport  projects. The FAA has  to approve the  airport master                                                              
plan  and  any  planned  development  at the  airport  has  to  be                                                              
approved through  that process.  Once a project  is in  the master                                                              
plan,  it  can  receive  funding  if  it  qualifies.  The  current                                                              
formula  has about  95 percent federal  funding  with a 5  percent                                                              
state match  for international. If  it's a qualifying  project the                                                              
5 percent is paid for by the airlines.                                                                                          
                                                                                                                                
Under the  stimulus program, projects  had to be  shovel-ready and                                                              
you couldn't have  applied or been in the process  of applying for                                                              
other federal grants.  Another early criterion was  that a project                                                              
had  to be  in an  economically  disadvantaged community.  Neither                                                              
Anchorage  nor Fairbanks  was considered  disadvantaged, but  they                                                              
did qualify for  two projects. In Anchorage that was  a $3 million                                                              
repaving project.                                                                                                               
                                                                                                                                
SENATOR MEYER  said his reason for  asking is that the  airport is                                                              
in  a tough  spot because  it  has to  appease  local, state,  and                                                              
federal   concerns.  He   noted  that   he  represents   southeast                                                              
Anchorage and  there aren't  too many  complaints unless  the east                                                              
west runway  is used. He asked if  the airport will take  over the                                                              
area vacated when Kulis Air National Guard pulls out.                                                                           
                                                                                                                                
MR. PARROT  explained that when  Kulis Air National  Guard vacates                                                              
the  base at  the  end  of FY11  under  the base  realignment  and                                                              
closure  (BRAC),  the Department  of  Defense will  terminate  its                                                              
lease with the state  and about 135 acres will come  back into the                                                              
airport  inventory. The  airport  is currently  initiating a  mini                                                              
master plan to  determine the needs for that  property. Responding                                                              
to a question  about involving community councils  in the process,                                                              
he said  there is a  significant public  process in the  study and                                                              
in implementing the recommendations for use of the property.                                                                    
                                                                                                                                
SENATOR MEYER  said he represented  the Spenard community  when he                                                              
served on the  Anchorage assembly and the airport  was always good                                                              
about keeping everyone informed.                                                                                                
                                                                                                                                
1:46:09 PM                                                                                                                    
REPRESENTATIVE BUCH  said he noticed that in this  last budget the                                                              
airport received "the  biggest chunk of change." He  asked if most                                                              
of  the  money   was  used  for  capital  projects   such  as  the                                                              
improvements  that were  mentioned. He  noted that  Ms. Klein  has                                                              
been  available and  tried to  accommodate communication  requests                                                              
and he appreciates this cooperation.                                                                                            
                                                                                                                                
MS. KLEIN  explained that  in the  last legislative session  there                                                              
were two  changes in the AIAS  program. On the capital  side there                                                              
was  authorization for  the airport  to accept  federal money  for                                                              
the  runway  rehabilitation.   The  majority  of   the  money  was                                                              
federal.  The second  item was a  $3.1 million  line reduction  in                                                              
the  operating  budget. That  was  done  as  a commitment  to  the                                                              
airlines  to be  more cost  effective. This  wouldn't normally  be                                                              
done through the  legislative process but it was done  that way to                                                              
show transparency  and to demonstrate that the  airport took their                                                              
comments  seriously.  She added  that  this  is not  general  fund                                                              
money.  The  airport is  run  on  private  money coming  from  the                                                              
airlines through rates  and fees. "There is no  general fund money                                                              
in this operation."                                                                                                             
                                                                                                                                
1:49:23 PM                                                                                                                    
REPRESENTATIVE  BUCH   noted  that  the  last  20-year   plan  was                                                              
completed  in 2002  so  the airport  is  several  years behind  in                                                              
doing a  5-year revision. He  asked for  a progress report  on the                                                              
20-year plan and  said he wants to be part of the  new focus group                                                              
so he can keep his constituency updated.                                                                                        
                                                                                                                                
MS.  KLEIN explained  that the  master  plan that  was started  in                                                              
2006  was very  controversial  on  one issue  and  she had  little                                                              
option but to  terminate the process. That effort  was turned into                                                              
a report.  As the economy turns  around, they hope to  restart the                                                              
process and  get better data  on growth projections  and capacity.                                                              
Many  of   the  questions   related  to   whether  or   not  those                                                              
calculations   were   credible   and  reflected   changing   world                                                              
conditions.  This is a  cooling off  period before restarting  the                                                              
process. Master  plans are time  consuming and costly and  lots of                                                              
different  groups  want  to  take part.  "That  is  typically  why                                                              
master plans  in this community  for this airport have  taken much                                                              
longer  than  the 5-year  period."  Until  this last  one,  master                                                              
plans for  this airport have  historically taken from  6-10 years.                                                              
That tells  us that there shouldn't  be too many surprises  in the                                                              
future master  plan. FAA is  supportive of restarting  the process                                                              
but agrees that it's a good idea to wait.                                                                                       
                                                                                                                                
1:54:05 PM                                                                                                                    
REPRESENTATIVE  BUCH  said  he's   looking  for  a  timeframe  for                                                              
starting.                                                                                                                       
                                                                                                                                
MS. KLEIN said they  committed in the operating agreement  to do a                                                              
system plan before  restarting the master plan.  The airlines said                                                              
that the  capacity and  growth capacity  of the Fairbanks  airport                                                              
hadn't  been  considered   so  they  will  look   at  that  before                                                              
restarting  calculations.  She  estimated  that probably  will  be                                                              
within two years.                                                                                                               
                                                                                                                                
REPRESENTATIVE BUCH  asked if he  can tell the community  that the                                                              
airport is  looking to  "rebuild, restructure,  and recommit  to a                                                              
communications  plan  that  will   also  involve  the  surrounding                                                              
communities within two years."                                                                                                  
                                                                                                                                
1:56:32 PM                                                                                                                    
MR.  PARROT  said the  airport  has  always  been committed  to  a                                                              
communications plan. He continued to say:                                                                                       
                                                                                                                                
     These communication  efforts take  place on a  number of                                                                   
     different  levels.  There  will  be  a  master  planning                                                                   
     public  involvement process  initiated within two  years                                                                   
     as part  of the master plan  effort. We fully  intend to                                                                   
     continue attending  the community council  meetings when                                                                   
     requested  or when  we believe  we have  a need. And  we                                                                   
     will  continue having  public  informative meetings  and                                                                   
     public  input meetings  on specific  projects along  the                                                                   
     way. I  wouldn't want  the impression  to be that  we're                                                                   
     not  going  to  do anything  until  we  start  the  next                                                                   
     master  plan. We intend  to continue  to try to  improve                                                                   
     communications  consistently  up  to  and  through  that                                                                   
     process.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  BUCH said  he  wants to  make  sure that  Director                                                              
Klein can wear all  the hats she's undertaken to  wear in order to                                                              
promote  the industry.  If  you need  more  help and  that can  be                                                              
substantiated fiscally, I want to support that, he said.                                                                        
                                                                                                                                
MS. KLEIN said  she appreciates his concern and  she undertook the                                                              
job because  of the  support and  encouragement she has  received.                                                              
Also,  she has  a top  notch and  very committed  team that  works                                                              
long hours with  great passion. "I think that we  can carry on and                                                              
meet our core mission." In the long run it's well worth it.                                                                     
                                                                                                                                
1:59:52 PM                                                                                                                    
SENATOR MENARD  asked if  there had  been any conversations  about                                                              
increasing  traffic  to and  from  the  Palmer airport.  She  also                                                              
asked if  realtors have been  invited to  weigh in on  the airport                                                              
master plan.                                                                                                                    
                                                                                                                                
MS.  KLEIN  pointed  out  that  neither  of  the  two  Palmer-area                                                              
airports  is state  operated, but  she does try  to help  whenever                                                              
possible.  She can't  speak  to  whether the  airport  would be  a                                                              
destination or hub  because that's an airline decision,  but it is                                                              
conceivable if  there is enough  traffic. She noted that  a couple                                                              
of  cargo air  carriers oriented  to  the Bush  left Anchorage  to                                                              
operate out of Palmer.                                                                                                          
                                                                                                                                
SENATOR  MENARD  asked if  the  state  has considered  buying  the                                                              
Palmer airport.                                                                                                                 
                                                                                                                                
MS.  KLEIN replied  she usually  tries  to give  airports back  to                                                              
communities.  Ketchikan is  an example  of  a state-owned  airport                                                              
that  is operated  by the  City of  Ketchikan. Typically  airports                                                              
aren't  profitable  and communities  usually  don't  want to  take                                                              
them  on  unless there  is  a  lot  of traffic.  Responding  to  a                                                              
statement that  they do  provide jobs,  she said some  communities                                                              
try to get airports for just that reason.                                                                                       
                                                                                                                                
2:04:58 PM                                                                                                                    
SENATOR  MENARD asked  if Boeing  737s  land at  the Dutch  Harbor                                                              
airport.  She surmised  that the  runway  is about  4,000 feet  in                                                              
length.                                                                                                                         
                                                                                                                                
MS. KLEIN said jet  aircraft at one time landed there  so it would                                                              
have  to be at  least 4,000  feet. She  offered to  meet with  the                                                              
Palmer airport manager.                                                                                                         
                                                                                                                                
SENATOR  DAVIS  asked  her  to go  over  the  agreement  with  the                                                              
signatory airlines  because she is  unclear about the  process for                                                              
the public to know what is going on.                                                                                            
                                                                                                                                
MS. KLEIN explained  that airports are public facilities  that are                                                              
funded  entirely by  the rates and  fees charged  to the  airlines                                                              
that use  the airport.  It is a  unique enterprise business  where                                                              
the airlines  sign an operating  agreement that lays out  how they                                                              
will  be  charged  from year-to-year.  By  federal  law,  airports                                                              
aren't  allowed  to  make  a  profit;   all  the  funds  that  are                                                              
generated  have  to  go into  airport  operations.  The  operating                                                              
agreement  is what  guarantees  the airport  is  able to  operate.                                                              
Without that agreement  airports can go significantly  in the red.                                                              
When that  happens,  state or local  government  has to bail  them                                                              
out or they  lose the service.  The enterprise here has  been very                                                              
self  sufficient   and  growing.  26  airlines  have   signed  the                                                              
operating  agreement to  pay airport  costs for  a five-year  term                                                              
under certain conditions.                                                                                                       
                                                                                                                                
SENATOR DAVIS  asked what nine positions  were cut and  the impact                                                              
those cuts have  had on airport operations. She also  asked if the                                                              
decision  to cut the  positions  was based totally  on input  from                                                              
the airlines.                                                                                                                   
                                                                                                                                
MS.  KLEIN  said no;  the  cuts  were  based  on last  year's  $22                                                              
million  deficit  that  had  to  be balanced  by  year  end.  When                                                              
traffic  changes,  revenue drops  and  the airport  is  challenged                                                              
with balancing  the deficit  without causing  rates to  skyrocket.                                                              
When  rates  go up  too  fast  it  drives aircraft  away.  It's  a                                                              
dynamic process  of looking  at rates and  fees, the  traffic, the                                                              
cargo,  the number  of enplanements,  and revenue  coming in  from                                                              
concessions.  She and  the  controller rebalance  and  recalculate                                                              
every  week.  Although  there's opportunity  to  make  adjustments                                                              
several  times a year,  doing so  creates upset  to businesses  if                                                              
they  haven't  been  informed.  I think  we've  created  a  stable                                                              
business  environment because  we haven't  seen severe drops,  she                                                              
said. We've  followed the  trend except  during the Mount  Redoubt                                                              
eruption. The  ash lasted a week  but it took six weeks  for cargo                                                              
to return  to the  airport. That's  not a  good sign since  that's                                                              
where a majority of the revenue comes from.                                                                                     
                                                                                                                                
2:14:20 PM                                                                                                                    
SENATOR  DAVIS recalled  reading that  Anchorage has  some of  the                                                              
lowest landing fees of any airport.                                                                                             
                                                                                                                                
MR.  PARROT said  the  airport markets  itself  in  a good  light.                                                              
There  was a  recent report  that  said that  per passenger  mile,                                                              
tickets  in  and out  of  Anchorage  are  the lowest  among  major                                                              
cities.  "Obviously with  the distance  of the  flights, per  mile                                                              
our tickets are fairly cheap," he added.                                                                                        
                                                                                                                                
REPRESENTATIVE  GRUENBERG  asked if  the 7R/25L  runway  extension                                                              
and  rehabilitation would  encroach to  the east  on Conner's  Bog                                                              
and the dog park.                                                                                                               
                                                                                                                                
UNIDENTIFIED SPEAKER  said the southern  east-west runway  will be                                                              
resurfaced  over  two construction  seasons  and  (indecipherable)                                                              
end will be extended 1,500 feet.                                                                                                
                                                                                                                                
REPRESENTATIVE  GRUENBERG referenced a  letter from  John Fletcher                                                              
related  to the  expansion  at  Lake Hood  and  asked  if that  is                                                              
within the purview of the discussion today.                                                                                     
                                                                                                                                
MR.   PARROT  summarized   that   Mr.  Fletcher   recommended   an                                                              
additional  4,000 foot  paved runway  for the  Lake Hood  seaplane                                                              
base complex  during the  Lake Hood  master planning effort.  That                                                              
was discussed  at length  in technical  meetings,  but it  did not                                                              
make  the list  of  recommended  improvements  to Lake  Hood.  Mr.                                                              
Fletcher continues  to advocate  for that  as an important  safety                                                              
improvement.                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GRUENBERG  said  he  would  follow  up  after  the                                                              
meeting.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  HOLMES mentioned  Lake Hood  and Lake Spenard  and                                                              
noted that  the Anchorage airport  property includes  probably the                                                              
busiest seaplane  lake in  the world. She  asked what  the airport                                                              
sees  as the  opportunities  and challenges  of  having those  two                                                              
lakes in their inventory.                                                                                                       
                                                                                                                                
2:18:49 PM                                                                                                                    
MR. PARROT  said it's a challenge  and an opportunity to  have the                                                              
busiest seaplane basin  in the world in the center  of the largest                                                              
city in the state.  This is an outstanding opportunity  for people                                                              
to fly in and  out of Anchorage on floats, wheels,  or skis. If an                                                              
instrument approach  is needed  on wheels Anchorage  international                                                              
airport  is available.  There is  a connecting  taxiway. Also,  it                                                              
provides  an incredible  recreational opportunity  to walk  around                                                              
and look  at all the  airplanes. Finding a  way for this  to occur                                                              
in a safe and responsible manner is an ongoing process.                                                                         
                                                                                                                                
SENATOR PASKVAN  asked if  there is a  projection within  the next                                                              
five years  to return to previous  cargo tonnage levels.  He noted                                                              
that the  current levels  have had a  significant impact  upon the                                                              
railroad  with respect  to transportation  of jet  fuel. Also,  he                                                              
understands that  Anchorage airport is purchasing jet  fuel out of                                                              
Singapore  and questions  how that  compares  to a  gallon of  jet                                                              
fuel from Alaska.                                                                                                               
                                                                                                                                
2:21:16 PM                                                                                                                    
MS.   KLEIN  replied   maintaining   air   traffic  is   important                                                              
particularly  in   the  current  downturn.  The   airport  has  an                                                              
operating agreement  and it has  kept rates and fees  competitive.                                                              
Now the airport  is trying to ensure that carriers  and their sub-                                                              
businesses  feel welcome.  They are  also working  to ensure  that                                                              
the  Fairbanks airport  has the  infrastructure  to better  handle                                                              
cargo. To  that end three hard  stands were constructed  last fall                                                              
to  accommodate   cargo  aircraft  when  they  divert   [from  the                                                              
Anchorage airport].  [During the volcano eruption]  some FedEx and                                                              
UPS  flights  diverted  to  Fairbanks   but  one  of  the  largest                                                              
airlines  didn't realize  that Fairbanks  was  an alternate.  They                                                              
lost  most of  their profit  when  they diverted  to Seattle.  The                                                              
vice-president  of that  international  carrier  has since  toured                                                              
both  airports  and  understands   that  aircraft  can  divert  to                                                              
Fairbanks  when there  is a problem  with Anchorage.  In the  past                                                              
the airport  hasn't formed alliances  with other  airports looking                                                              
at  transloading  capabilities.  Now  they  are  trying  to  match                                                              
international  and domestic carriers  to increase their  networks.                                                              
In the last  two months passenger  and cargo traffic in  China has                                                              
increased  16  percent. That  is  a  positive sign  and  hopefully                                                              
their recovery will affect Alaska.                                                                                              
                                                                                                                                
MS. KLEIN said she  can't speak to the fueling  issue because it's                                                              
the  airlines that  purchase fuel.  They do  that in  a number  of                                                              
ways including; a  consortium, Flint Hills, Tesoro,  and Valdez in                                                              
the past.  She suggested  that an  airline could  better speak  to                                                              
that issue.                                                                                                                     
                                                                                                                                
2:24:44 PM                                                                                                                    
CHAIR KOOKESH opened public testimony.                                                                                          
                                                                                                                                
LISSA  WRIGHT,  Board  Member,  Country  Lane  Estates  Homeowners                                                              
Association,  Anchorage, on  behalf of  the 44  homeowners in  the                                                              
subdivision,  asked  the airport  work  with the  neighborhood  to                                                              
design  future   development  to   minimize  additional   negative                                                              
impacts  on  the  neighborhood.   This  will  mean  some  economic                                                              
sacrifice.  For example,  if  the airport  does  not develop  lots                                                              
right  up  to the  Raspberry  Road  fence  in the  proposed  south                                                              
airpark access  road and  lot development,  it would maintain  the                                                              
character of the  road and provide the neighborhood  a much needed                                                              
sound, and visual buffer.                                                                                                       
                                                                                                                                
2:27:37 PM                                                                                                                    
MERLE AKERS, representing  himself, Anchorage, said  he apparently                                                              
is not  a stakeholder  even though  he lives  next to  the airport                                                              
and has had a  plane there for 50 years. The  primary problem with                                                              
the airport  is that there is no  forum for the general  public to                                                              
sit  in the  airport  meetings and  learn  what's  going on.  He's                                                              
never  allowed to  testify. The  question that  hasn't been  asked                                                              
today is who  participated in the negotiations  for the consortium                                                              
contract. "You  need to know  who those  folks are," he  said. The                                                              
consortium  airlines will  demand that the  airport system  change                                                              
the rates  and other things  that affect  the people that  use not                                                              
only the  Anchorage international airport  but also the  other 200                                                              
and  some  airports   in  the  state.  He  recommended   that  the                                                              
Legislature  establish   an  airport  board  to   oversee  airport                                                              
operations. He cited  examples of contracts at Lake  Hood and Lake                                                              
Spenard to demonstrate  that the airport doesn't  pay attention to                                                              
public input.  Finally, he said  the state frequently  closes Lake                                                              
Hood, which  affects control of  the tower and makes  it difficult                                                              
to get  clearance to  land or take  off. Merrill  Field is  run by                                                              
the  city of  Anchorage  and  it hasn't  closed  in  30 years.  To                                                              
resolve  the problems  you'll hear  about  today, the  Legislature                                                              
needs to  take control  and ensure  that there's  a forum  for the                                                              
public   to   participate.   Responding   to   a   question   from                                                              
Representative  Buch, he pinpointed  his property  on the  map and                                                              
noted   that   he   is   represented   by   Senator   French   and                                                              
Representative Holmes.                                                                                                          
                                                                                                                                
2:40:19 PM                                                                                                                    
CECILIA  PREZIOSE,  representing  herself,  said  she has  been  a                                                              
homeowner in  the Windermere  subdivision for  about 18  years and                                                              
has noticed a change  in flight patterns. Now the  jets fly so low                                                              
that she  can recognize the people  on board. There's a  noise and                                                              
safety issue  here, she  said. "The days  of Anchorage  and Alaska                                                              
being 'Yahoo,  Wild West.' are gone."  Flights from Lake  Hood are                                                              
more numerous  than the jumbo jets  and they need to fly  at least                                                              
1,000   feet  above   homes.  Responding   to   a  question   from                                                              
Representative  Doogan, she  agreed that  they live  at about  the                                                              
same latitude.                                                                                                                  
                                                                                                                                
2:45:50 PM                                                                                                                    
HARRIET DRUMMOND,  Vice Chair, Anchorage Municipal  Assembly, said                                                              
she  represents roughly  50,000  west Anchorage  citizens. It's  a                                                              
huge district.  She said the  Anchorage international  airport has                                                              
nearly a permanent  spot on the agendas of Sand  Lake and Turnigan                                                              
community  councils and  often is  on  the agenda  of the  Spenard                                                              
Community Council. It's  such an issue in the Sand  Lake area that                                                              
that  community council  created a  separate committee  to get  to                                                              
keep  the airport  from  occupying  every meeting.  The  Anchorage                                                              
international  airport impacts  a huge portion  of west  Anchorage                                                              
and the residents are clearly frustrated.                                                                                       
                                                                                                                                
Most  people understand  that the  airport  operates from  revenue                                                              
generated  by the industry  and everyone  who travels  appreciates                                                              
the convenience  of having a  modern airport in  the neighborhood.                                                              
There is  no question that the  airport is an important  driver in                                                              
the Anchorage economy.  However, the airport is a  neighbor and as                                                              
it  expands to  its boundaries,  it's  increasingly important  for                                                              
all the  neighbors to work  together. The airport  occupies center                                                              
stage in the  west Anchorage district plan that  is underway. Once                                                              
that is complete,  zoning and development issues  can be addressed                                                              
and  clarified  in   the  new  land  use  regulations   that  will                                                              
implement  the Anchorage  2020 Comprehensive  Plan. However,  it's                                                              
been  virtually  impossible  for  airport neighbors  to  have  any                                                              
input on  the airport development  plans. Airport  representatives                                                              
visit  community councils  and announce  their intentions  without                                                              
really  asking  for  input. Everyone  recalls  the  disaster  that                                                              
method  of  public   communication  became  last   year  with  the                                                              
announcement of  a new north-south runway. The  signatory airlines                                                              
refused to  support the runway  and the previous  airport director                                                              
subsequently departed.                                                                                                          
                                                                                                                                
Everyone is  well aware of the  current economic downturn  and the                                                              
impact of  nature's power.  It's a quieter  period at  the airport                                                              
and  she  sees  it as  an  opportunity  to  improve  communication                                                              
between the  airport and its  neighbors. To this  end, Assemblyman                                                              
Claman  has suggested  quarterly  communication  meetings for  the                                                              
airport  and  the neighboring  community  councils.  Ms.  Drummond                                                              
clarified  that  these  would  not   be  focus  groups.  They  are                                                              
intended  to   facilitate  the  communication  process   but  it's                                                              
difficult  to do  that without  help.  She advised  that the  west                                                              
Anchorage district  planners will  hold an initial  public meeting                                                              
on  October 8.  They  will present  the  issues and  opportunities                                                              
regarding  the airport  and west  Anchorage as  well as issues  of                                                              
housing,  town  centers,  circulation,  and  transit.  The  public                                                              
review  draft  of the  plan  will  be out  by  year end  and  will                                                              
include a  summary of  the neighborhood  and airport conflicts.  I                                                              
hope  the   planning  process  leads   to  more  open   and  early                                                              
communication with the airport, she said.                                                                                       
                                                                                                                                
MS. DRUMMOND  added that she was  shocked to hear there  has never                                                              
been a system  plan for the Anchorage and Fairbanks  airports. The                                                              
previous  airport  director  told   her  that  Anchorage  revenues                                                              
support the Fairbanks  airport. If that is the  case, then perhaps                                                              
some of the cargo should go to the Fairbanks airport.                                                                           
                                                                                                                                
2:52:26 PM                                                                                                                    
CHRIS HABICHT,  representing himself, said  he is a member  of the                                                              
Turnigan  Community  Council and  has  lived in  the  area for  17                                                              
years. He said the  airport has done a great job  in following its                                                              
mission statement. He stated it as follows:                                                                                     
                                                                                                                                
     The  mission of  the Ted  Stevens International  Airport                                                                   
     is  to  safely,  effectively,  efficiently  operate  and                                                                   
     maintain   the    airport   consistent    with   federal                                                                   
     regulatory    requirements,   high   customer    service                                                                   
     standards, sensitivity  to user needs, and  awareness of                                                                   
     community goals.                                                                                                           
                                                                                                                                
MR.  HABICHT  emphasized  the  phrase,   "awareness  of  community                                                              
goals"  and highlighted  the  fact  that there  is  no mention  of                                                              
incorporating community  goals into  plans unless it  doesn't cost                                                              
anything. For example,  when the north-south runway  expansion was                                                              
proposed  the  airport  provided  lots of  outreach  and  took  in                                                              
comments from  the public.  In early 2000  the tonnage in  and out                                                              
of the  airport was  projected to  increase, but  by the  time the                                                              
runway  project  was  moving  forward   the  economy  had  slowed.                                                              
Someone  asked if  the projections  had been  reevaluated and  the                                                              
airport never  provided a satisfactory  answer. As it  turned out,                                                              
the  air carriers  also felt  that  the airport  needed to  adjust                                                              
their projections  and didn't support  the runway  expansion. This                                                              
shows that the  community provided input, but it  didn't appear to                                                              
be  utilized by  the  airport. "My  feeling  is  that the  mission                                                              
statement for  the airport really  needs to change to  include the                                                              
community  goals in the  decision-making  process, not just  being                                                              
aware," he said.                                                                                                                
                                                                                                                                
2:56:10 PM                                                                                                                    
MARK WIGGIN,  Board Member,  Turnigan Community  Council,  said he                                                              
has lived in  the Turnigan neighborhood for eight  years. He hopes                                                              
to shed light  on one of the  most critical issue  facing Turnigan                                                              
residents,  which  is the  efficacy  of  the public  process.  The                                                              
airport does  seem to  engage in  some sort  of a public  process,                                                              
but the issue is  what happens to the information.  As a member of                                                              
the advisory committee  on the cancelled fourth  runway project he                                                              
was  initially excited  to  be part  of  the  process. Within  six                                                              
months or a  year he realized he  was wasting his time  and didn't                                                              
attend  the last  meetings.  The previous  airport  administration                                                              
rolled out  the fourth runway project  amid great fanfare  only to                                                              
have the  airlines read a letter  opposing the project.  There was                                                              
a  lot  of  time, effort,  and  money  spent  needlessly  on  that                                                              
project.  He   expressed  hope  that  this   hearing,  legislative                                                              
engagement,  and  work  by the  new  airport  administration  will                                                              
result in  never again  spending so  much money  on such  a flawed                                                              
and damaged  process.  It's an excellent  example  of what  not to                                                              
do.                                                                                                                             
                                                                                                                                
3:00:31 PM                                                                                                                    
CATHY  GLEASON, Board  Member,  Turnigan  Community Council,  said                                                              
she  has lived  in the  Turnigan and  west Anchorage  area for  27                                                              
years.  She expressed  the  hope  that this  hearing  is just  the                                                              
first step  in the dialog  with the Legislature  regarding airport                                                              
and community  matters. One of the  most important points  she and                                                              
others  want to  make is  that there  are flaws  with the  current                                                              
public participation  process.  To their  credit, the airport  has                                                              
improved  communication  with the  public  over the  last  several                                                              
years.  They  have  not  hesitated  to  attend  community  council                                                              
meetings to  present development  plans or  give updates.  That is                                                              
appreciated.  The issue  is not  that the  airport doesn't  follow                                                              
public  process  requirements.  The  issue  is  that  the  airport                                                              
handles public input  very inadequately and that  there is nothing                                                              
that   requires  it   to  objectively   evaluate  or   incorporate                                                              
meaningful  public  input. What  typically  happens  is that  they                                                              
tell the public  what they intend  to do and, as a  formality, ask                                                              
for  input. Once  the public  provides input,  the airport  spends                                                              
time and money  defending their original position  and plan rather                                                              
than listening to and being responsive to the feedback.                                                                         
                                                                                                                                
MS. GLEASON said  an example of the airport  ignoring overwhelming                                                              
public  opposition  was when  it  applied  to  the Army  Corps  of                                                              
Engineers  for a  10-year wetland  permit  to fill  more than  240                                                              
acres  in  Turnigan   and  Postmark  bogs.   Despite  overwhelming                                                              
opposition due  to environmental  and subsequent high  development                                                              
impacts, the  airport moved forward  and the permit  was approved.                                                              
The permit was revoked  only after a lawsuit was  filed and it was                                                              
discovered   that  the   airport   underestimated  air   pollution                                                              
emission  levels in  the  application. A  more  recent example  is                                                              
when the airport  proceeded with plans to build  the second north-                                                              
south runway  despite continuing  public opposition  and questions                                                              
of  economic viability  and necessity  by  airport tenants.  Among                                                              
other impacts, that  project would have destroyed a  190 acre park                                                              
west of  the airport  and put an  enormous amount  of fill  in the                                                              
tidal area at  the northern end of the Anchorage  Coastal Wildlife                                                              
Refuge. It  was only the economic  downturn and fear  of increased                                                              
user fees by signatory  airlines that put a stop  to that project.                                                              
All  public input  was ignored.  Over  the years  the council  has                                                              
provided  input on  the long-running  impacts  to the  residential                                                              
area and  nearby recreational  facilities.  Rarely has this  input                                                              
resulted in adequate resolution of problems.                                                                                    
                                                                                                                                
MS.  GLEASON  asked  the  Legislature  to  become  more  involved,                                                              
provide  more oversight,  and if  necessary  intervene in  airport                                                              
operations  and  development  because the  current  process  isn't                                                              
working.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  DOOGAN asked  if  problems with  the airport  have                                                              
improved since the previous airport director was replaced.                                                                      
                                                                                                                                
MS. GLEASON  mentioned the continued  air and ground noise  at her                                                              
house and  said the impacts  are and have  been so high  that even                                                              
though traffic is  reported to have dropped, there  is no tangible                                                              
evidence  that  issues have  been  resolved.  She added  that  the                                                              
master  planning  process  has   stopped,  the  economy  is  in  a                                                              
downturn,  and the  airport isn't  proceeding  with major  capital                                                              
projects so  it is a quieter  time. She agreed  with Assemblywoman                                                              
Drummond  that  now   is  the  time  to  address   some  of  these                                                              
longstanding  issues  because  they  still  exist.  Responding  to                                                              
further  questions, she  said it's  too early  to tell how  things                                                              
will go with the new administration.                                                                                            
                                                                                                                                
REPRESENTATIVE  DOOGAN   explained  that  he's  trying   to  judge                                                              
whether  things are  getting better,  are about  the same,  or are                                                              
getting worse since the airport administration changed.                                                                         
                                                                                                                                
3:11:11 PM                                                                                                                    
DAVID  MCCARGO,  representing himself,  said  he's  had  a lot  of                                                              
interface  with the  airport in  the 30  years he's  lived in  the                                                              
airport neighborhood.  Today he  is addressing the  traffic issue.                                                              
It  is  just  as important  as  noise.  The  traffic  patterns  on                                                              
International  Boulevard have  become a dangerous  issue  and from                                                              
his  subdivision  there is  almost  no  safe egress.  It's  almost                                                              
impossible to find resolution on this type of issue.                                                                            
                                                                                                                                
Another  issue that  is  rarely addressed  is  the pollution  that                                                              
comes from  the airport  because it is  basically exempt  from the                                                              
Clean  Air  Act.  It's  well  and fine  that  the  airport  is  an                                                              
economic engine  for Anchorage, but it  won't do a lot  of good if                                                              
people are  dead because of increased  air pollution, he  said. He                                                              
showed a  sample of  a one-month accumulation  of what  he scraped                                                              
from  his car  windshield when  it  was parked  near the  airport.                                                              
Statistically  this  is  meaningless,  but  this is  what  we,  as                                                              
airport neighbors, face, he said.                                                                                               
                                                                                                                                
3:16:16 PM                                                                                                                    
TYLER ROBINSON,  Planning Department,  Municipality of  Anchorage,                                                              
said   the  municipality   is  currently   undertaking  the   West                                                              
Anchorage  District  Plan  to address  long-standing  issues.  The                                                              
airport staff  is participating  and has been very  accommodating.                                                              
The  district  plan will  look  at  land-use  issues and  use  FAA                                                              
planning  materials  to  see how  other  jurisdictions  deal  with                                                              
airports  that  are in  close  proximity  to residential  and  non                                                              
industrial  areas. The  idea  is to  find tools  to  use to  allow                                                              
continued  airport  development   and  also  respect  and  protect                                                              
neighborhoods. The  municipality is aware  of what's going  on and                                                              
views  itself as  a partner  with  the community,  the state,  the                                                              
Legislature and the airport, he said.                                                                                           
                                                                                                                                
REPRESENTATIVE DOOGAN asked the boundaries of the planning area.                                                                
                                                                                                                                
MR. ROBINSON  replied, "Roughly  [it] goes  down towards  Diamond,                                                              
basically  works  its  way  back   up  Minnesota  on  the  eastern                                                              
boundary, follows Spenard  Road up to Chester Creek."  The area is                                                              
fairly large  and although the airport  is a central focus  of the                                                              
plan, other issues are at play as well.                                                                                         
                                                                                                                                
3:19:04 PM                                                                                                                    
RUSS  SINGLETON,  representing  himself,  said  he  lives  in  the                                                              
Turnigan area  and he wants  to go on  record supporting  what the                                                              
Turnigan Council  has said. Communication was extremely  bad prior                                                              
to Ms. Klein's tenure.  Noise has always been an  issue and in the                                                              
past small  plane traffic was not  factored in. Those  engines are                                                              
the very  noisiest when they're  climbing and it's  deafening when                                                              
they fly over the  house. The lack of communication  has been most                                                              
annoying and  if we can  improve that perhaps  we can  find better                                                              
results, he said.                                                                                                               
                                                                                                                                
3:20:47 PM                                                                                                                    
LINDA SWISS,  representing herself,  said she lives  off Raspberry                                                              
Road and is  directly impacted by airport development.  She became                                                              
concerned  when  she  saw  that  the  south  airpark  access  road                                                              
development  was  moving  forward   without  incorporating  proper                                                              
public  review.  She  noted  that   she  has  never  received  any                                                              
communication from  the community council so there  is obviously a                                                              
communication  gap  with the  council  itself. She  mentioned  the                                                              
discontinued  master  plan  and  said it  doesn't  make  sense  to                                                              
piecemeal airport  development. She  believes: the airport  should                                                              
assess  what will go  into the  airport inventory  when Kulis  Air                                                              
Force  Base closes  before proposing  additional development;  the                                                              
West Anchorage District  Plan should be developed  in concert with                                                              
the master  plan, not  separately; the  south airpark  access road                                                              
should be delayed  until a better public process is  defined and a                                                              
comprehensive development  plan is written; and the  community and                                                              
all user  groups should be included  in a meaningful  way ensuring                                                              
that they receive correct and timely information.                                                                               
                                                                                                                                
CHAIR KOOKESH asked Ms. Klein to provide closing comments.                                                                      
                                                                                                                                
3:24:48 PM                                                                                                                    
MS. KLEIN  thanked the committee  for holding the meeting  and for                                                              
inviting  House members;  it is  much  more efficient  for her  to                                                              
meet with both at  the same time. She said she  noticed that a lot                                                              
of  the issues  were  about  past  projects. She  appreciates  the                                                              
comments and  would note  that public  comments are important  and                                                              
they  sometimes  have changed  projects.  Everyone  might not  get                                                              
what  they  want  but  the  airport does  at  times  try  to  find                                                              
compromise.  "And we will  hopefully do  a better  job of  that in                                                              
the future."  Environmental issues  were raised  and she  wants to                                                              
remind   everyone  that   the  Anchorage   airport  has   national                                                              
environmental and  operational awards for being proactive  in some                                                              
areas.                                                                                                                          
                                                                                                                                
Finally,  there might be  some misunderstanding  about the  master                                                              
plan  process  and how  it  works.  She  explained that  the  2002                                                              
master  plan   is  the  official   FAA  recognized   and  accepted                                                              
document. That is  what the airport is using and  will continue to                                                              
use until  there is  a new  plan. She  mentioned the forth  runway                                                              
issue  and  said  that  was  one  of  several  alternatives  under                                                              
consideration.  That's what a  master plan is  about; it  looks at                                                              
various alternatives  as  possibilities. "I  don't want people  to                                                              
lose perspective  of that. It  is off the  table but I do  want to                                                              
recognize that and  that the master plan is the best  place to get                                                              
those  comments documented  so we  can  look at  changes that  are                                                              
most compatible with  our airport and community."  We look forward                                                              
to that continuing dialog, she said.                                                                                            
                                                                                                                                
SENATOR DAVIS  asked if she intends  to address the  comments that                                                              
were made regarding small planes.                                                                                               
                                                                                                                                
MS. KLEIN  said Lake Hood and  Lake Spenard are an  important part                                                              
of the  airport that  doesn't really  pay for  itself or  help the                                                              
larger operation.  For that reason there are  mixed feelings about                                                              
whether or  not Lake Hood  should even be  at the airport.  It's a                                                              
controversial  issue for  some administrations.  Her view  is that                                                              
it's  an  important  part  of the  airport  history  and  it's  an                                                              
important tie  to the  rest of Alaska.  We shouldn't  forget about                                                              
it or send  it to other parts  of the state. We're trying  to make                                                              
it work,  but it's  a challenge. Lake  Spenard has homeowners  and                                                              
there's  a history  of people walking  around  and using the  lake                                                              
recreationally.  "We're trying  to  also enable  that to  continue                                                              
rather  than just fencing  it off  like Merrill  Airfield  and not                                                              
allowing the people  to use it." We have to recognize  that nobody                                                              
will  be perfectly  happy but  we'll  try to  find middle  ground.                                                              
That's what we've done for the last 22 months, she said.                                                                        
                                                                                                                                
SENATOR  MEYER  noted  that  passenger  enplanements  are  down  4                                                              
percent for  the year  while tourism says  business is  down 20-30                                                              
percent. He  asked if you  could conclude  from that that  most of                                                              
the passengers are  business or family travel rather  than tourist                                                              
travel.                                                                                                                         
                                                                                                                                
MS. KLEIN  said not necessarily;  Alaska probably hasn't  seen the                                                              
decreases that  other states have  seen because of  its dependence                                                              
on aircraft.                                                                                                                    
                                                                                                                                
SENATOR MEYER asked  if you could conclude that  the 20-30 percent                                                              
drop in hotel business  reflects a drop in cruise  ship travel and                                                              
not so much a drop in air travel.                                                                                               
                                                                                                                                
MS. KLEIN  said  the four percent  drop  is for FY09  and this  is                                                              
FY10.  Passenger enplanements  have  been  down significantly  the                                                              
last several months and have been linked to the drop in tourism.                                                                
                                                                                                                                
SENATOR MENARD asked  Ms. Klein to take a look  at Point McKinsey.                                                              
It has the same capacity as the Denver airport at 16,000 feet.                                                                  
                                                                                                                                
MS. KLEIN  said there  are developers who  are interested  in that                                                              
and she is too; it would have a drastic affect on Anchorage.                                                                    
                                                                                                                                
REPRESENTATIVE   GRUENBERG   asked  if   Anchorage   international                                                              
airport puts a head tax or fee on passengers.                                                                                   
                                                                                                                                
MS. KLEIN  replied there  is a passenger  facility charge  at both                                                              
the Anchorage  and Fairbanks  airports. It's  allowed through  the                                                              
FAA and the airport is reimbursed.                                                                                              
                                                                                                                                
REPRESENTATIVE  GRUENBERG asked  if it's a  federal or  state tax.                                                              
He added  that his reason for  asking is that the  House judiciary                                                              
committee  is currently looking  at the  constitutionality  of the                                                              
state head tax on cruise line passengers.                                                                                       
                                                                                                                                
MS. KLEIN deferred to Mr. Day.                                                                                                  
                                                                                                                                
3:34:44 PM                                                                                                                    
KEITH  DAY,  Controller,  Alaska   International  Airport  System,                                                              
Department of Transportation  and Public Facilities  (DOTPF), said                                                              
it's  a  federal law  that  allows  the  implementation of  a  per                                                              
passenger facility  charge that is collected by  the airlines when                                                              
a ticket  is sold.  It is neither  a federal tax  nor a  true head                                                              
tax but it works as such.                                                                                                       
                                                                                                                                
REPRESENTATIVE  GRUENBERG  described  it  as a  state  tax  that's                                                              
permissible under federal law.                                                                                                  
                                                                                                                                
MR. DAY  replied he  would not call  it a  state tax because  it's                                                              
per  airport.  Within   the  system  each  airport   submitted  an                                                              
application  to  the  FAA. Those  applications  are  for  specific                                                              
purposes and proceeds  can only be used for the  specific purposes                                                              
outlined in the application.                                                                                                    
                                                                                                                                
REPRESENTATIVE GRUENBERG  called it a  facility fee and  asked how                                                              
much it is.                                                                                                                     
                                                                                                                                
MR.  DAY said  the fee  is $4.50  per passenger  at Fairbanks  and                                                              
$3.00 per passenger at Anchorage.                                                                                               
                                                                                                                                
REPRESENTATIVE  GRUENBERG  asked  if  it  applies  separately  for                                                              
enplaning and deplaning or just one or the other.                                                                               
                                                                                                                                
MR. DAY replied the  charge is per leg with up to  three legs in a                                                              
trip and it is collected at enplanement.                                                                                        
                                                                                                                                
3:37:03 PM                                                                                                                    
REPRESENTATIVE GRUENBERG  commented that  a lot of  the complaints                                                              
are the result  of a lack of  communication. He asked  what she is                                                              
going to do about that.                                                                                                         
                                                                                                                                
MS. KLEIN  mentioned  the 67-70  meetings on  the master plan  and                                                              
said she  would probably follow  a similar process in  the future.                                                              
She added  that she  recognizes that  it might  be helpful  to let                                                              
people know  how their  input was used  on projects.  Getting back                                                              
to people on that would be a good place to start.                                                                               
                                                                                                                                
REPRESENTATIVE BUCH  said it's not  a matter of whether  there has                                                              
been  communication;  it's  a  matter   of  the  efficacy  of  the                                                              
communication  that's at  issue. It's  a question  of whether  the                                                              
input  will   be  taken  into  account   and  become  part   of  a                                                              
development.                                                                                                                    
                                                                                                                                
Responding  to   Senator  Menard's  request  [to   look  at  Point                                                              
McKinsey], he related  that the 2002 master plan  looked at moving                                                              
the airport  across  Cook Inlet.  It didn't pencil  out despite  a                                                              
huge community  wide  effort. He  then said that  with respect  to                                                              
the  comments about  aircraft flight  patterns  and noise,  people                                                              
must  keep in  mind  that it's  the  pilots at  the  international                                                              
airport who have  the final say if they are given  a choice on the                                                              
distance they  will taxi  and takeoff  direction. The  air traffic                                                              
controllers can make recommendations, but they can't insist.                                                                    
                                                                                                                                
3:43:10 PM                                                                                                                    
CHAIR KOOKESH thanked the participants and adjourned the Senate                                                                 
Transportation Standing Committee meeting at 3:43 p.m.                                                                          
                                                                                                                                

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