Legislature(2011 - 2012)BARNES 124
02/01/2011 01:00 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| Presentation(s): Knik Arm Bridge & Toll Authority | |
| Presentation(s): Alaska Mobility Coalition | |
| Presentation(s): Port Mackenzie Rail Extension | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
JOINT MEETING
HOUSE TRANSPORTATION STANDING COMMITTEE
SENATE TRANSPORTATION STANDING COMMITTEE
February 1, 2011
1:01 p.m.
MEMBERS PRESENT
HOUSE TRANSPORTATION
Representative Peggy Wilson, Chair
Representative Lance Pruitt, Vice Chair
Representative Eric Feige
Representative Cathy Engstrom Munoz
Representative Max Gruenberg
Representative Pete Petersen
SENATE TRANSPORTATION
Senator Albert Kookesh, Chair
Senator Joe Thomas, Vice Chair
Senator Dennis Egan
Senator Linda Menard
Senator Charlie Huggins
MEMBERS ABSENT
HOUSE TRANSPORTATION
Representative Craig Johnson
COMMITTEE CALENDAR
PRESENTATIONS(S): KNIK ARM BRIDGE & TOLL AUTHORITY
- HEARD
ALASKA MOBILITY COALITION
- HEARD
PORT MACKENZIE RAIL EXTENSION
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
MICHAEL FOSTER, P.E., Chair
Knik Arm Bridge & Toll Authority (KABATA)
Anchorage, Alaska
POSITION STATEMENT: Presented an overview of the Knik Arm
Bridge & Toll Authority (KABATA).
KEVIN HEMENWAY, Chief Financial Officer
Knik Arm Bridge & Toll Authority (KABATA)
Anchorage, Alaska
POSITION STATEMENT: Presented and answered questions during an
overview of the Knik Arm Bridge & Toll Authority (KABATA).
DAVID LEVY, Executive Director
Alaska Mobility Coalition
Anchorage, Alaska
POSITION STATEMENT: Presented a PowerPoint Overview of the
Alaska Mobility Coalition (AMC).
JENNIFER BECKMANN, President, Alaska Mobility Coalition;
Executive Director, Central Area Rural Transit
Soldotna, Alaska
POSITION STATEMENT: Testified during the Alaska Mobility
Coalition's presentation.
BILL HERMAN, Senior Trust Program Officer
Alaska Mental Health Trust Authority (AMHTA);
Member, Governor's Coordinated Transportation Task Force (GCTTF)
Anchorage, Alaska
POSITION STATEMENT: Testified during the Alaska Mobility
Coalition's presentation.
MILLIE RYAN, Executive Director
Governor's Council on Disabilities and Special Education
Anchorage, Alaska
POSITION STATEMENT: Testified during the Alaska Mobility
Coalition's presentation.
JEFF OTTESEN, Chair
Governor's Coordinated Transportation Task Force (GCTTF);
Director, Division of Program Development
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions during the
Alaska Mobility Coalition's presentation.
ELIZABETH GRAY, Acting Borough Manager
Matanuska-Susitna Borough (MSB)
Palmer, Alaska
POSITION STATEMENT: Testified during the presentation on the
Port MacKenzie Rail Extension (PMRE).
RICK MYSTROM, Economic Development Advisor
Matanuska-Susitna Borough (MSB)
Anchorage, Alaska
POSITION STATEMENT: Testified during the presentation on the
Port MacKenzie Rail Extension (PMRE).
JOE PERKINS, Executive Project Manager
Port MacKenzie Rail Extension (PMRE)
Juneau, Alaska
POSITION STATEMENT: Testified during the presentation on the
Port MacKenzie Rail Extension (PMRE).
ACTION NARRATIVE
1:01:37 PM
CHAIR PEGGY WILSON called the joint meeting of the House and
Senate Transportation Standing Committees to order at 1:01 p.m.
Present at the call to order from the Senate were Senators
Kookesh, Huggins, Menard, Thomas, and Egan. Present at the call
to order from the House Transportation Standing Committee were
Representatives P. Wilson and Feige. Representative Petersen,
Gruenberg, Munoz and Pruitt arrived as the meeting was in
progress.
^PRESENTATION(S): KNIK ARM BRIDGE & TOLL AUTHORITY
PRESENTATION(S): KNIK ARM BRIDGE & TOLL AUTHORITY
1:01:48 PM
CHAIR P. WILSON announced that the first order of business would
be a presentation by the Knik Arm Bridge & Toll Authority
(KABATA).
1:04:09 PM
MICHAEL FOSTER, P.E., Chair, Knik Arm Bridge & Toll Authority
(KABATA), began by introducing the Knik Arm Bridge & Toll
Authority's (KABATA) Chief Financial Officer, Kevin P. Hemenway.
He remarked on two milestone events, which were a no jeopardy
determination related to the impacts of this project on the
Beluga whales; and the record of decision from the Federal
Highway Administration (FHWA) in mid-December with a build
alternative. He characterized the record of decision as
basically the authority to proceed with the project.
1:05:38 PM
MR. FOSTER turned to his presentation on the Knik Arm Toll
Bridge. He asked why the Knik Arm toll bridge is good for
Alaska [slide 2]. He answered that this bridge would connect
Alaska's infrastructure, supports resource development, provide
jobs and support economic growth, and create an alternative
corridor for safety. Currently, the Glenn Highway is the only
traffic corridor north of Anchorage and this would provide a
second corridor. Additionally, the toll bridge would help fund
future statewide transportation needs since toll revenue could
be used for any Title 23 project, ranging from Ketchikan to
marine highway needs or for airports.
1:06:24 PM
MR. FOSTER described the immediate benefits [slide 3], which he
characterized as a true economic stimulus. This is a
public/private partnership, he stated. The capital will be "put
up" by a private party investor, resulting in a partnership
between the state and this investor, with the construction funds
supplied by the private sector. He related that the project
represents about $700 million in infrastructure and would result
in 5,000 construction-related jobs. It will take about three to
four years to complete the project and about 10,000 people can
rely on this project for their jobs, he added. The public
benefits include $326 million in cost savings on lower cost of
freight shipped from the Port of Anchorage to the Interior in
the next ten years. This figure represents labor and fuel
savings, but not capitalization of assets so the total savings
could be larger. He also estimated savings of $303 million to
commuters in fuel and time savings. He related fuel savings
alone are estimated at $150,000.
1:08:17 PM
MR. FOSTER pointed out that the state's new correctional
facility is located approximately 75 miles from the court
facility in Anchorage, but once the bridge is in place the total
trip mileage would be reduced to 12 miles. He projected an
overall reduction of 1,900,000 fewer metric tons of carbon
emissions. He also projected $30 million savings associated
with the Goose Creek Correctional Center for staff and vendor
supplier's transportation, but the savings noted does not
include visitor transportation costs. Additionally, as
previously stated, the bridge would provide an alternative to
Glenn Highway for safety, pointed out current routine monthly
closures and weekly delays are encountered. The project would
connect the Port of Anchorage and Port MacKenzie to better serve
the state and also would tie together the state's transportation
network.
MR. FOSTER referred to the base case traffic forecast, which he
said was derived from several sources, including consulting with
a third party consultant, the DOT&PF's traffic review, and the
FHWA's oversight. He related the forecast assumes bridge
completion in 2015 and the toll opening [slide 4].
1:09:33 PM
MR. FOSTER characterized the model as a fair representation. He
explained the red portion of the graph represents the commercial
use, while the blue portion represents commuters. He pointed
out the flat portion indicates when the bridge would reach
maximum capacity. He said that while additional traffic volumes
could be accommodated adding additional traffic volumes risk
overloading the system. He indicated when that happens, as it
has occurred on the Glenn Highway and other highways, the extra
traffic "just chokes it."
1:10:15 PM
MR. FOSTER estimated the projected toll authority [slide 5]. He
related toll gross revenue earnings are anticipated at $12.1
billion over a 60-year time period, based on the projected 2015
opening of the toll road.
1:11:04 PM
MR. FOSTER detailed the toll facility revenue as a "waterfall"
flow of funds [slide 6]. He explained that the private/public
partnership is based on an availability fee payment structure.
His analogy was that it was like building a high-rise building.
In the initial year, the lease payment and availability payments
would be made while the gross revenue would pay the private
partner, followed by KABATA recovering operating costs, reserve,
replenishment, project improvements, other transportation needs.
He explained reserve replenishment is revenue that rolls back
into the state and can be used for Title 23 services. He
anticipated that by approximately 10 years into the project, the
Ingra/Gambell connection would be built from project funds. The
bridge is a four-lane structure, but the initial deck would
consist of two lanes and as traffic demands the deck would be
expanded to a four-lane structure, which is why embankments and
other components are being built to accommodate four lanes.
1:12:54 PM
MR. FOSTER discussed the projected net revenue [slide 7]. The
blue on the graph represents the operating cost, the green
represents toll net revenue, or profit, and red represents the
availability payment. The chart figures are based on a 35 year
private/public partnership model. The blue represents the
operating cost of the facility after the post-concession
contractual arrangement is completed. While the contractual
arrangement could continue, the model is based on the first 35
years, he said. The revenue, depicted in green, indicates $8
billion in net revenue over 60 years, which would be available
to use for other transportation needs. The blue represents the
funds for operation and maintenance improvements, as well as for
any expansions required.
1:13:49 PM
MR. FOSTER turned to a photo of the proposed crossing [slide 7]
and explained that questions have been raised about the location
of the crossing. He characterized the selected crossing spot as
the ideal location due to air space constraints at Elmendorf Air
Force Base. The crossing also represents a good location
geologically, noting that the bridge structure would be set on
consolidated till and not on clay or mud.
MR. FOSTER explained the bathymetry and tides [slide 9]. He
then played an animated slide which discussed the view. The
crossing would span 14,000 feet, with the proposed bridge
comprised of 8,200 feet, and embankments would total 6,000 feet
of embankment, including both sides of the span.
1:15:30 PM
MR. FOSTER provided a view of the project during the late season
1 [slide 10]. He explained that the U.S. Coast Guard requires
bridge clearance at high tide to equal 50 feet of clearance. He
remarked that the clearance at low tide ranges from 75 to 80
feet depending on tides.
MR. FOSTER discussed the oscillated drilled shaft operation
[slide 11]. He described the operation, relating its low impact
compared to the driven pile method. He remarked that the state
recently used this system on the Tanana River crossing on the
Tok Highway.
MR. FOSTER showed a photo slide which showed the proposed
project late in season 2, and he pointed out some of the piles
and caps mid-span [slide 12].
1:16:39 PM
MR. FOSTER showed an animated photo slide that depicted the
foundation wrap up for season 2. He related that the foundation
is shown in place in this slide but is awaiting the deck
placement. The proposed plan also includes pedestrian and
bicycle lanes [slide 13].
MR. FOSTER reiterated the final bride is planned as a 14,000
foot crossing. He played an animated slide that depicted the
future, four-lane Knik Arm Crossing [slide 14]. He described
the property and alignment of the port expansion.
1:18:45 PM
REPRESENTATIVE PETERSEN asked for projected toll amount and for
the number of years before the project would "break even."
MR. FOSTER answered that the initial toll is based on a fee
amount of $5 each way per passenger, while the semi-tractor fee
would be based on the number of axles or weight. He projected
that by year three the toll revenue would exceed the toll
revenue requirements. He anticipated that the requested reserve
fund request would cover costs during the initial years.
REPRESENTATIVE PETERSEN asked how KABATA plans to convince
Government Hill residents to allow the plan to move forward. He
recalled public comments were largely in opposition to the
project.
MR. FOSTER responded that initially the port project included
plans for an open cut, but the plan was changed to add "a lid"
with a greenbelt on top. He elaborated that the Government Hill
portion requires three properties in order to proceed. He
offered his belief that at the end of the project, although he
was uncertain what residents will think, the impacts are
significantly minimized, and would include a cut with buried
tunnel and a greenbelt on top of it.
SENATOR MENARD recalled the engineering work Mr. Foster did at
Red Dog Mine, which she said is the largest zinc mine in the
world. She commended his lead engineering work. She mentioned
that the KABATA is currently working on a bill which will
contain the reserve fund request.
1:21:35 PM
MR. FOSTER acknowledged that Senator Menard and Representative
Neuman will introduce the bill for the reserve fund. He said
that if the reserve fund bill passes, the project would have
funding for the initial years for the availability payments.
Additional funds would not be necessary for the first five or
six years. He explained that the toll revenue would repay the
fund at about year three. Within the first five or six years,
and money taken from the fund would be completely repaid and
excess revenue, as previously stated, would be deposited into
the fund for Title 23 services statewide. He stressed that the
reserve fund is required in order for KABATA's private partner
to demonstrate the ability to make availability payments, when
"things are tight."
1:23:32 PM
KEVIN HEMENWAY, Chief Financial Officer, Knik Arm Bridge & Toll
Authority (KABATA), explained the main purpose of the reserve
fund is to enhance the credit for the project, which would allow
the private sector to make a lower availability payment bid.
The bids will be the lowest availability payment between the
competing parties. The objective is to obtain the most value
for the public and citizens of Alaska from the transaction. He
related his background includes a 30-year career in the private
sector in public accountancy as well as having served as the
chief financial officer of two publicly traded corporations,
including Alaska Communications Systems. He related that in
1999 he came to Alaska and has since completed several billion
dollars in transactions. He offered his belief that the project
is necessary in Alaska and he would like his children to come
back and have the same opportunities afforded him.
1:24:43 PM
CHAIR P. WILSON asked whether the figure for the fund is known,
or if ongoing financial requests will be necessary.
MR. HEMENWAY explained the importance to demonstrate to the
private sector that funds have been appropriated. He described
the other piece is that if the fund drops below certain level,
determined by contractual procurement, it would be necessary to
replenish the fund with additional appropriations. He further
explained this represents a standard backstop credit
enhancement. He described the advantage, referring back to the
graphics that showed the availability payments, and the lower
level of operating costs once the state takes it over. Using the
reserve fund means the state can get the transaction at a lower
cost of capital and could take full ownership at year 35 instead
of 50 to 60 years out, which is how long it would probably take
without some type of credit enhancement. Otherwise, the private
sector would have a higher cost of capital, a higher borrowing
rate, and higher equity expectation, he said.
1:26:18 PM
REPRESENTATIVE FEIGE referred back to the slide of the planned
project and inquired as to whether the engineers have considered
the depositional characteristics, given the tremendous tidal
flow in the area. He pointed out the two abutments on either
end of the bridge would project out into the water flow of Knik
Arm. He expressed concern that given the high sediment flow
that deposition would occur. He further wondered how this might
affect the dredging requirements at Port MacKenzie and the
ability of ships to maneuver. He pointed out that the shoal is
already encroaching on the Port of Anchorage, which he surmised
may have been affected by the construction of Port MacKenzie.
MR. HEMENWAY responded that the U.S. Corps of Engineers has
developed a model of Cook Inlet. He advised members that
KABATA's staff has been studying effects on this structure due
to the expansion at both ports. He speculated the possibility
that the total bridge span may increase to minimize deposition,
but stated KABATA is still in the process of modeling and fine
tuning with respect to engineering. He reported the model
KABATA ran three months ago showed that the bridge would not
have an impact on either port. He commented that the
Municipality of Anchorage (MOA) and the Matanuska-Susitna
Borough (MSB) have also expressed concern whether this project
would require additional dredging needs. The National Marine
Fisheries Service (NMFS) requested KABATA also consider possible
expansion of the bridge structure and reducing the overall fill.
Currently the KABATA has been weighing all parameters, from an
engineering perspective to optimize design to mitigate impacts
to Beluga whales and sediment deposits or additional dredging
concerns, he said.
1:28:49 PM
SENATOR THOMAS asked for clarification on how the public/private
partnership would work. He related his understanding of the
necessity for up-front funding. He said he does not object to
the state taking a lead in funding. He related that in his
experience, costs are usually underestimated and benefits are
overestimated. He expressed interest in knowing how any overrun
costs would affect the partnership and who would cover those
costs. Additionally, he asked for the reason for increased
traffic flow and whether it would be due to people become more
interested in the crossing or if projections are based on
population estimates over a 25-year period.
1:30:40 PM
MR. HEMENWAY explained how the public/private partnership would
operate. He highlighted that the state would retain ownership
of toll revenue, which would be used to make availability
payments to the private partner. The procurement is the minimum
availability payment in an otherwise compliant proposal, he
related. The project functions that the private partner would
carry out would be to design, build, finance, and maintain the
facility over the term of the concession to certain performance
standards, which would be contractually set. One performance
standard criteria used was the requirement to build to technical
specifications and includes operating and maintenance costs for
the structures. The vast majority of the construction related
risk would be "laid off" contractually to the private partner,
he said. The constructability reviews indicate a three to four
year construction phase. However, penalty provisions would be
imposed on the availability payment if the project were to be
delayed or the roadway was not built to standards. The bid
proposal is based on the maximum availability payment, assuming
the partner meets its contractual obligations. At the end of
the term, provisions will include "hand back" requirements,
which outline the requirements for the condition of the
facility. These provisions are typically anticipated at an 80
percent for a new, well maintained-level facility, he stated.
Additionally, since the partner will be motivated by profit, the
partner will work to be very efficient, he stated. The
contractual performance standards set the construction standards
and indicate how the facility will be operated and maintained.
Certain kinds of risk are not "laid off" such as archaeo paleo
costs, but typically cost overrun with respect to the partner's
subcontractor are "laid" onto the private partner, unless it is
caused by KABATA or the state.
1:32:59 PM
MR. HEMENWAY offered that a number of components comprise the
traffic and revenue study. The KABATA hired Wilbur Smith
Associates, which was selected because it is one of the best
firms in the industry. Of the 20 "green" field or start-up toll
roads completed in the last 10 years, this firm has averaged 96
percent of the "base case" traffic. He remarked the company has
been highly accurate. He noted only one of its projects fell
below 75 percent of the "base case" traffic. Wilbur Smith
Associates has conducted an investment grade traffic and toll
revenue study, which rating agencies on Wall Street use to
determine whether to invest in a project. He characterized this
study as a high quality, high level traffic and revenue study.
The study is also updated periodically for population growth. A
number of population studies also indicate the region will have
a population growth of 150,000 to 250,000 over the next 20
years. The main public policy case for this project is to
accommodate population growth in the region as well as the
movement of freight and to open up economic opportunities in the
state.
1:34:42 PM
REPRESENTATIVE PETERSEN recalled that KABATA was created with
federal funds. He asked how much funding remains.
MR. FOSTER answered that approximately $65 million remains of
the roughly $200 million in federal appropriations made to
KABATA. He reported that Governor Murkowski reappropriated
about $100 million to other projects. He anticipated the
remaining funds should be "more than enough" to pay for the
final permits, solicitation for a public/private partner, and
for KABATA's operating costs. The reserve fund's purpose is to
provide availability and not for KABATA's operating costs.
1:35:40 PM
MR. FOSTER, in response to Chair P. Wilson, stated that KABATA
has requested $150 million from the legislature.
1:36:07 PM
The committee took an at-ease from 1:36 p.m. to 1:37 p.m.
^PRESENTATION(S): ALASKA MOBILITY COALITION
PRESENTATION(S): ALASKA MOBILITY COALITION
1:37:45 PM
CHAIR P. WILSON announced that the next order of business would
be a presentation by the Alaska Mobility Coalition.
1:38:00 PM
DAVID LEVY, Executive Director, Alaska Mobility Coalition (AMC),
began by introducing Jennifer Beckmann as the AMC Board of
Director's president and the executive director of Central Area
Rural Transit.
MR. LEVY related he would speak about the AMC, including its
public awareness campaign, its statewide issues, and its two
legislative priorities [slide 2].
1:40:03 PM
MR. LEVY reviewed the AMC's mission statement, which he stated
as achieving mobility through community appropriate
transportation services. Since 2002, the AMC has been a private
not-for-profit membership organization that represents and
advocates for public and community transportation statewide
[slide 3]. The AMC provides weekly updates, a monthly
newsletter, an annual report as well as maintaining the AMC's
website and its Facebook page [slide 4].
MR. LEVY referred to the list of AMC's membership, relating that
it has nearly 100 member organizations in the state [slides 5-
6].
1:41:25 PM
MR. LEVY reported on the AMC's public awareness campaign, which
began last year [slide 7]. One of its goals has been to put a
human face to public and community transportation in Alaska.
This slide depicts newspaper advertisements that it ran in
Anchorage, Fairbanks and the Kenai Peninsula. The
transportation system provides seven million rides statewide.
He characterized each ride as a story. He described several
"stories" of reasons passengers use public transportation
including an isolated senior who wants to go to the senior
center to play bingo, a newly employed person who needs to ride
to work, or a mom who needs to transport her kids to daycare.
He identified the website address as www.goodgoingalaska.com for
members to find additional information about AMC. He mentioned
the bus advertisements (ads) the AMC has placed in buses stress
the importance of public transportation and show how public
transportation helps people live independently [slide 8].
MR. LEVY also mentioned the series of radio advertising AMC ran,
which used local people to talk about their stories and
highlighted reasons people have for using buses, including to
attend local events and commute to and from the Matanuska-
Susitna Valley to Anchorage [slide 9].
1:43:59 PM
MR. LEVY highlighted the two legislative priorities the AMC
supports [slides 10-11]. He reported that HB 131 was introduced
last week, which would create the Alaska Community and Public
Advisory Board to provide a specific role for the state with
respect to public transportation. He noted the photo in slide
11 is of the new Juneau Transit Center. He commended the City
and Borough of Juneau (CBJ) in its efforts to better provide and
coordinate transportation. He stressed the importance of public
and community transportation. The second bill would create a
State Partnership in Public Transportation in Alaska, and he
thanked Senator Kookesh for his efforts taken on this bill.
Alaska is one of three states that does not provide operating
funds for public transportation so the burden has fallen on
local communities to do so, ranging from local government to
tribal investments, but not the state of Alaska. He related his
understanding this bill would be introduced shortly and urged
members to support it.
1:47:37 PM
JENNIFER BECKMANN, President, Alaska Mobility Coalition; and
Executive Director, Central Area Rural Transit, echoed Mr.
Levy's sentiments on transportation needs. She asked to speak
primarily on behalf of the Central Area Rural Transit (CART),
which provides 60,000 public transportation rides per year
serving the central Kenai Peninsula. The majority of its
passengers travel to work or medical appointments or other
support services or for shopping or recreational needs and
activities. She concurred with Mr. Levy, stressing the
organization would also like the state play an active role since
the services are needed ones, that CART serves clients have no
other options to rely on for a ride. She urged members to
invest in public transportation.
1:49:03 PM
The committee took an at-ease from 1:49 p.m. to 1:50 p.m.
1:50:15 PM
BILL HERMAN, Senior Trust Program Officer, Alaska Mental Health
Trust Authority (AMHTA); and Member, Governor's Coordinated
Transportation Task Force (GCTTF), stated that the Alaska Mental
Health Trust Authority (AMHTA) has been working on coordinated
transportation needs since the trust was formulated in 1985.
Each year the AMHTA has advocacy summits and the two topics as
prime topics to coalesce groups that represent the beneficiaries
was MEDICAID issue and the other is the coordination of
transportation issues, which remains one of the AMHTA's high
priorities. He commented that he also serves as the trust
designee on the Governor's Coordinated Transportation Task Force
(GCTTF). He expressed his excitement the governor is interested
in finding efficiencies that coordination of services provides.
Since 1996, the AMHTA has been working to coordinate
transportation services for a wide variety of agencies in
various communities that offer transportation to clients. The
AMHTA helps providers coalesce around coordinated system and
pool vans to provide better and efficient use. He characterized
this as a "win-win" situation. In 2009, the AMC surveyed
Alaskans and found 94 percent supported pooling transportation
services. He offered his belief that the GCTTF can examine
state government transportation funding streams to find
efficiencies for combined rides and funding sources.
1:53:02 PM
MR. HERMAN reported that AMHTA beneficiaries represent five to
eight percent of Alaskans, including the mentally ill, the
developmentally disabled, those suffering from Alzheimer's
disease and related dementia, and chronic alcoholism. He said
that public transportation has been the key means this group
uses to get to work, to travel to meet their health care needs,
and to provide hope in their lives. He estimated, in
conjunction with Department of Transportation & Public
Facilities (DOT&PF)'s assistance, trust beneficiaries represent
approximately 46 percent of the ridership in all transportation
systems. In the past 15 years, the AMHTA has provided $5
million in capital funding, which has been matched with some
state general fund. He pointed out the AMHTA works to use its
funds as a catalyst for change rather than to achieve base
operating budget costs. Often, AMHTA funds are used to match
federal transit dollars. Finally, he estimated that the 46
percent mobility users represent about seven million rides,
which benefits a large number of residents statewide. He
further estimated trust beneficiaries take 3.2 million rides
alone. He strongly supported the operating subsidy currently
being considered.
1:55:06 PM
MILLIE RYAN, Executive Director, Governor's Council on
Disabilities and Special Education, Anchorage, Alaska, related
she is one of the founding members of the Alaska Mobility
Coalition (AMC). She stated she serves as its executive
director and offered reasons the Governor's Council on
Disabilities and Special Education is interested in public
transportation. She related when the council has conducted
surveys or during its public comment period, that people have
reported they find it hard to get to work, to medical
appointments, and become part of the community. Many people end
up lonely and isolated she said. She reported that the 2010
Harris poll, which is conducted annually, found huge gaps
between people with disabilities and people without
disabilities, including transportation. Additionally, the
Transportation Equity Network conducted a study, which indicates
that transportation is an economic driver, since it not only
provides a means for people to get to work, but affords them
opportunities to get to other places such as to stores for
shopping. She reported that studies show approximately $6 in
economic benefit is returned for every dollar spent on public
transportation. She offered the Governor's Council on
Disabilities and Special Education support for the creation of a
sustainable state transportation trust fund. She thanked
Senator Thomas and Representative P. Wilson for introducing
bills to accomplish this. She concluded that the council
believes this will offer a sustainable source of funds for
operation. She reported that a number of different sources are
available for capital outlay for transportation needs, but a
source of funds to operate the vehicles is also necessary.
1:57:14 PM
JEFF OTTESEN, Chair, Governor's Coordinated Transportation Task
Force (GCTTF); Director, Division of Program Development,
Department of Transportation & Public Facilities (DOT&PF),
stated that he was speaking today as the Chair of the Governor's
Coordinated Transportation Task Force (GCTTF). The rural transit
program that Department of Transportation & Public Facilities
(DOT&PF) administers for the state is under his purview. He
said that today he is "wearing a separate hat." He reported
that last February he presented the GCTTF's findings to this
committee. Last July, Governor Parnell reappointed the GCTTF,
added additional task force members, and assigned the GCTTF
additional tasks. He reported that currently the GCTTF is
comprised of a 12-member task force, with an additional four
members serving as ex officio non-voting members. He introduced
some of the GCTTF's staff; Marsha Bracke, the GCTTF's
facilitator, and J. Eric Taylor of his staff. Additionally, he
mentioned members, Bill Herman and Jennifer Beckmann, who
previously testified, and Camille Ferguson, who represents the
Sitka Tribe of Alaska.
1:59:18 PM
MR. OTTESEN commented that various not-for-profit organizations
and other organizations that provide transit service should work
in unison and in concert to reduce the number of vans on
highways carrying a fraction of people who need transportation.
Currently, seniors are not authorized to ride in vans for the
disabled, which is one policy that needs to be changed. He
reported that former President George W. Bush signed an
executive order requiring coordination among federal agencies.
He mentioned that 60 different types of transportation funding
support the federal agencies. He pointed out that some of this
funding has been transferred to state government, which is
tasked with coordination of services. The GCTTF's goal is to
provide services more efficiently. He related a scenario, which
described an instance describing issues that affect some
disabled rural Alaskans who arrive in Alaska's cities and cannot
acquire transportation to accommodate wheelchairs. Sometimes
the disabled person has had to use an ambulance to get to a
medical appointment. He remarked that the cost to use emergency
vehicles is alarming. He commented that Alaska has one of the
fastest growing senior populations in the nation. Many people
arrived here in the 1970s and are now reaching senior citizen
ages. Additionally, Alaska has one of the highest per capita of
veteran's in its population, many of whom have medical needs as
a result of injuries acquired during their military service. He
reiterated the multiple funding sources and the need to ensure
coordination and consolidation of transportation services.
2:01:55 PM
MR. OTTESEN reported that the GCTTF is currently gathering data,
relating that last year, the GCTTF had difficulty in identifying
and quantifying the number of people who need transportation
services since overlap exists. He clarified that a person may
be a senior who is also disabled. The GCTTF is also assessing
the types of needs. He reviewed the schedule of GCTTF's
upcoming meetings: February 2 in Juneau, May 3 in Fairbanks,
July 28 in Kodiak, and October 24 in Anchorage. The GCTTF will
report to the legislature next year with its findings. In
further response to Chair P. Wilson, he repeated the proposed
meeting dates, and explained the federal transit monies flow to
the Departments of Labor (DOL), Military & Veterans Affairs
(DMVA), and the DOT&PF.
2:04:01 PM
SENATOR THOMAS asked whether the GCTTF has a protocol for the
study for the demand or need.
MR. OTTESEN answered that it has a scope of work along with an
outline of tasks set out in the governor's proclamation. In
further response to Senator Thomas, Mr. Ottesen answered that
GCTTF is to report back to the governor by January 2012 with its
findings.
2:04:42 PM
REPRESENTATIVE FEIGE related his understanding that the goal
seems to be coordinating transportation largely between
governmental agencies.
MR. OTTESEN answered that the GCTTF's role is to work at the
local level with all parties who provide transportation, ranging
from not-for-profit organizations providing senior services to a
local transit authority and encourage them to work together.
Thus far, DOT&PF has had some success, noting some organizations
share dispatch services, maintenance costs, or vehicle
ownership.
REPRESENTATIVE FEIGE asked whether private vehicles, such as
taxis or limousines could also be used. He recalled the
problems mentioned earlier in which rural residents were
compelled to use an ambulance to transport them to medical
appointments. He said it seemed that if handicapped vans were
available they could be coordinated to reduce costs.
MR. OTTESEN agreed. He elaborated that Representative Feige has
identified exactly the type of issue the GCTTF has discussed.
He remarked that taxi cab companies often complain of additional
costs a lot to equip a van to accommodate wheelchairs. The
companies report that they do not usually have sufficient demand
to justify the additional cost. He offered his belief that the
challenge is to find a way to make the specially equipped van
available when it is needed.
2:06:22 PM
The committee took an at-ease from 2:06 p.m. to 2:08 p.m.
^PRESENTATION(S): PORT MACKENZIE RAIL EXTENSION
PRESENTATION(S): PORT MACKENZIE RAIL EXTENSION
2:08:49 PM
CHAIR P. WILSON announced that the final order of business would
be a presentation on the Port MacKenzie Rail Extension.
2:09:13 PM
ELIZABETH GRAY, Acting Borough Manager, Matanuska-Susitna
Borough (MSB), began by stating the Port MacKenzie Rail
Extension project is MSB's number one priority. She introduced
Alaska Railroad Corporation's (ARRC) members present, as well as
former DOT&PF Commissioner Perkins and former Anchorage Mayor
Rick Mystrom. She reported that last year the legislature
appropriated $35 million to the Port MacKenzie project.
2:10:21 PM
RICK MYSTROM, Economic Development Advisor, Matanuska-Susitna
Borough (MSB), stated that he is a former mayor of Anchorage and
has been working as an advisor to the Matanuska-Susitna Borough
(MSB). He offered to show a five-minute video highlighting the
Port MacKenzie Rail Extension project.
2:11:10 PM
MR. MYSTROM narrated the five-minute video, which illustrates
the 100-car rail loop that connects Anchorage to Port MacKenzie,
explaining the progress on the proposed Port MacKenzie Rail
Extension Project. He then offered to summarize the project by
presenting a PowerPoint presentation titled, "Rail Extension
Project, Economic Benefits to the Alaska Economy." He referred
members to the printed PowerPoint overview in member's packets.
2:16:11 PM
MR. MYSTROM highlighted what the Port Mackenzie Rail Extension
(PMRE) project means to Alaska's economy [slides 1-2]. He
explained the project would open up Interior Alaska to resource
development, create a development corridor along the Railbelt
for exploration and mineral extraction, and help facilitate the
development of a world-class limestone deposit between Livengood
and Fairbanks. The project could also help facilitate the
development of a cement production facility in or near
Fairbanks, dramatically improve the world competitiveness of
Alaska's coal, significantly reduce transportation and staging
costs for the proposed Alaska Natural Gas Pipeline, and help to
increase employment in the MSB, the Denali Borough, the
Fairbanks North Star Borough (FNSB), and Anchorage. He related
that Port MacKenzie and the PMRE project would work together
[slide 3]. He reported that Port Mackenzie is a bulk
commodities port primarily for the export of minerals, cement,
and coal. It also provides for the import, storage, and staging
of bulk fuel and pipe. However, it is not a consumer goods or
container port like the Port of Anchorage, he said.
2:19:14 PM
MR. MYSTROM related that 14 square miles of industrial land lies
adjacent to Port MacKenzie, which represents more room to
construct a project than any other location in Alaska. He
pointed out that space is not available in Anchorage [slide 4].
MR. MYSTROM outlined the advantages of the PMRE project [slide
5]. He explained that the PMRE project would provide a shorter
rail distance to tidewater for mineral exports and that it is
147 miles closer than any other opportunity to tidewater access.
It is the only Alaska port with 100-rail car loop. It would
provide efficient product transfer from train to ship, and would
avoid the most congested portion of the Alaska Railroad
Corporation (ARRC) mainline. Additionally, Port Mackenzie
offers a deep draft port that operates year round. He
reiterated the advantages, including the 14 square miles of
industrial area, that it would make Alaska's minerals more
competitive on the world market, and the PMRE project would
provide a great opportunity to grow our export economy.
2:21:08 PM
MR. MYSTROM highlighted Alaska's total exports [slide 7]. He
reviewed the statistics, relating that in 2007 Alaska's total
exports were at $4 billion, noting the subsequent downturn is
due to the downturn in the world economy. He reported that the
2010 exports are rising and once again projected at $4 billion.
He offered his belief Alaska has the potential to "grow that
dramatically."
MR. MYSTROM pointed out a pie chart which describes Alaska's
exports by type [slide 8]. Seafood represents Alaska's biggest
export at 50 percent and minerals represent 26 percent of the
export market. He offered his belief that Alaska's mineral
exports represent the greatest opportunity and potential for
growth. He reported Alaska's current exports to Japan for
seafood, minerals, energy, and forest products total $981
million. He pointed out that Japan is a resource poor country
and it needs Alaska's exports. Therefore, the current 14
percent in mineral exports could increase dramatically.
2:22:13 PM
MR. MYSTROM reported that in 2009, Alaska's exports to China
totaled $586 million [slide 10]. He remarked that 72 percent of
Alaska's seafood exports are destined for China. Although
current only 15 percent of Alaska's mineral exports are destined
for China, it is cheaper for China to purchase Alaska's minerals
since it does not have infrastructure in place.
MR. MYSTROM reported that in 2009, Alaska's exports to Korea
total $458 million, of which 35 percent are minerals, largely
from coal. He predicted Alaska's mineral exports to Korea will
continue to increase.
MR. MYSTROM provided estimates of the number of jobs created by
the PMRE project, as reported from the Institute of Social and
Economic Research at the University of Alaska Anchorage (ISER)
and HDR, an employee-owned architecture, engineering and
consulting firm [slide 12]. The ISER and HDR estimate 3,000
direct jobs. More importantly, the ISER and HDR estimates
indirect construction and private development jobs will be
created, including 4,000 ongoing, continuous private sector jobs
over the next 17 years, as well as 3,500 jobs from the
industrial development at Port Mackenzie [slide 13].
2:23:40 PM
MR. MYSTROM outlined funding needs [slide 14]. He explained
that the PMRE's funding request is for $55 million, including
$10 million for completion of the environmental impact study
(EIS) scheduled for Fall 2010; $18 million for constitutional of
the truck route and rail loop, and $35 million to begin
construction of the rail extension, scheduled for 2010-2011.
This year the governor included $20 million in his proposed
budget, whereas last year none was proposed. The legislature
appropriated $57 million, and although the governor vetoed $22
million, $35 million in funding remained. He advised that this
year an additional $55 million is requested for the PMRE to stay
under budget.
2:24:39 PM
JOE PERKINS, Executive Project Manager, Port MacKenzie Rail
Extension project (PMRE), began by elaborating on the three
legislative appropriations [slide 14]. He explained that the
first appropriation made approximately four years ago was $10
million for completion of the EIS. The final EIS should be
completed by March 2011, he said. The EIS is funded by the
PMRE, but is being conducted by the federal Surface
Transportation Board (STB) in Washington D.C. He also advised
members that the $10 million should be adequate to cover the EIS
costs.
2:25:49 PM
MR. PERKINS elaborated on $17 million appropriation for
construction of the rail loop. Currently, the rail loop is 70
percent constructed, he said. The PMRE has contracted out $10
million in construction contracts, of which the last contract
will be completed this summer. The remaining funds will be used
for design, environmental, and other activities. Last year, the
PMRE received $35 million from the legislature, which will fund
the first construction contracts for the embankment on the main
rail extension line. The main rail extension design has been
completed. He anticipated that the $22 to $23 million in funds
would cover 5 to 6 miles of the rail line. He further
anticipated that the PMRE is within a month of settling the
final rights-of-way necessary for the project. He anticipated
that the PMRE will award the first contract as soon as the final
EIS is completed. He commented that the final EIS will
determine which of the three routes under consideration by the
STB will be selected.
MR. PERKINS summarized that the total state appropriations to
date for the project is currently at $62 million. The PMRE will
need an additional $55 million in funds in order to stay on
schedule, of that amount $50 million is designated for
construction contracts for embankments.
2:28:11 PM
MS. GRAY referred members to the three-ring binder in members'
packets. She offered her belief that full funding makes sense
[page 1]. The project would add up to 4,000 permanent mining
and logistics jobs to the Alaska economy. Currently, the market
for Alaska's minerals exists. The PMRE project could provide
most of the construction materials for the proposed Susitna Dam
via Port Mackenzie. Additionally, the proposed natural gas
pipeline project could save a projected $100 million by shipping
heavy materials via Port Mackenzie as compared to projected
costs by using other ports. Further, bids are coming in lower
due to the downturn in the U.S. economy, so it makes "perfect"
sense to fund the project now, she said.
2:29:03 PM
SENATOR THOMAS stated he realized the study was not prepared by
PMRE but he offered his belief that the schedule of mines and
employment seems "pretty ambitious." He asked for a list of the
proposed mines during the PMRE's project timeframe.
MS. GRAY answered that she would be happy to provide the list.
She recalled that the Usibelli Coal Mine, Inc. has expressed
interest in transporting coal, as well as some interest from
copper mines. She reiterated her willingness to provide a list
of mines that have expressed interest, noting some entities may
request confidentiality, she said.
SENATOR THOMAS clarified that having access to the details will
be important to convince people of the project's viability. He
related his understanding of the confidential nature of some
entities, but he said he has grown weary of the term
"proprietary." He asked for clarification of the difference in
mileage that entities would have using Port Mackenzie as
compared to using Seward.
MR. MYSTROM responded that Port Mackenzie is 147 miles shorter
route as compared to the Seward destination. He recalled a
seminar recently he heard a quote, which is: "Mineral export is
transportation. Transportation is mineral export."
2:31:15 PM
SENATOR THOMAS asked for the reason that this project would not
divert coal destined for Seward, especially given the coal dust
issues at the Seward port due to the wind at that location.
MR. MYSTROM responded he would defer to the Usibelli Coal Mine,
Inc., but held numerous conversations and was given assurances
that the mine would continue to transport the same amount of
coal through Seward. He said he was uncertain of their reasons,
which might be due to its commitments to Seward or due to its
infrastructure investments in Seward.
2:32:07 PM
SENATOR THOMAS asked for clarification on the last page of the
PowerPoint overview, which listed three cost projections
totaling $156 million. He asked whether those costs represent
the final costs or if other costs would be incurred and an
additional appropriation would be requested at a later date.
MS. GRAY answered that the figures represent an estimated cost
of the final projected costs to complete the PMRE project to
connect to the Alaska Railroad Corporation's (ARRC) mainline.
MR. MYSTROM recalled an earlier comment related to projects
coming in over budget. He stressed the PMRE is one project that
is coming in under budget. He reported that the PMRE project
was initially proposed at $290 million dollar project and is now
projected at $218 million, which is down about $70 million, he
said.
SENATOR THOMAS recalled proposed spurs from Fairbanks to Delta
Junction and to Livengood. He asked whether the project success
is contingent on the completion of these spurs.
MR. MYSTROM answered that it is not. He explained that the
Delta Junction proposed spur was added as the federal government
funded the project, but he acknowledged some challenges have
arisen related to river projects. With respect to the Fairbanks
to Livengood spur, that project is not included in the PMRE
project but he suggested the Livengood spur would probably be
triggered by the proposed Susitna Dam project if the project is
built. He reiterated that the proposed spur from Fairbanks to
Livengood is not included in this budget.
SENATOR THOMAS remarked he thought the ARRC will be happy to
hear that the spur at Delta has been funded by the federal
government.
2:34:35 PM
SENATOR HUGGINS stressed that the PMRE is a statewide project,
not a Matanuska-Susitna Borough (MSB) project. He commented
that the PMRE project would be "connecting the dots" to a piece
of the railroad. He acknowledged that while some constituents
are not happy about disruptions this project causes, the overall
project is important to the state. Thus he supports the PMRE
project, he said. He recalled the MSB has received support from
other communities and asked the MSB to mention the support for
the project, thus far.
MS. GRAY referred members to Tab 4 of the binders in members'
packets for a list of support for the PMRE project and to copies
of the resolutions the MSB has received thus far. She commented
that resolutions of support were received from the Denali
Borough, the Alaska Railroad Corporation, the Alaska Miners
Association, Inc., the Greater Fairbanks Chamber of Commerce,
the Matanuska-Susitna Borough, the Greater Wasilla Chamber of
Commerce, the City of Palmer, and the Alaska State Chamber of
Commerce, which lists it as its top infrastructure priority.
2:37:10 PM
ADJOURNMENT
There being no further business before the committees, the joint
meeting between the House Transportation Standing Committee and
the Senate Transportation Standing Committee meeting was
adjourned at 2:37 p.m.
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