Legislature(2021 - 2022)BELTZ 105 (TSBldg)
03/02/2021 01:30 PM Senate TRANSPORTATION
Note: the audio ![]()
and video ![]()
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
| Audio | Topic |
|---|---|
| Start | |
| SB74 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 74 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE TRANSPORTATION STANDING COMMITTEE
March 2, 2021
1:32 p.m.
MEMBERS PRESENT
Senator Robert Myers, Chair
Senator Mike Shower, Vice Chair
Senator Click Bishop
Senator Peter Micciche
Senator Jesse Kiehl
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
SENATE BILL NO. 74
"An Act providing for and relating to the issuance of general
obligation bonds for the purpose of paying the cost of state
infrastructure projects, including construction, communications,
major maintenance, public safety, and transportation projects;
and providing for an effective date."
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 74
SHORT TITLE: G.O. BONDS: STATE INFRASTRUCTURE PROJECTS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
02/05/21 (S) READ THE FIRST TIME - REFERRALS
02/05/21 (S) TRA, FIN
02/25/21 (S) TRA AT 1:30 PM BELTZ 105 (TSBldg)
02/25/21 (S) -- MEETING CANCELED --
03/02/21 (S) TRA AT 1:30 PM BELTZ 105 (TSBldg)
WITNESS REGISTER
NEIL STEININGER, Director
Office of Management and Budget
Office of the Governor
Juneau, Alaska
POSITION STATEMENT: Presented a PowerPoint on SB 74, General
Obligation (GO) Bonds: State Infrastructure Projects on behalf
of the administration.
ALAN WEITZNER, Executive Director
Alaska Industrial Development and Export Authority (AIDEA)
Department of Commerce, Community and Economic Development
Anchorage, Alaska
POSITION STATEMENT: Answered questions on the GO Bond Projects
for AIDEA in SB 74.
HEIDI TESHNER, Director
Finance and Support Services Division
Department of Education and Early Development (DEED)
Juneau, Alaska
POSITION STATEMENT: Answered questions on GO Bond Projects for
DEED projects in SB 74.
STEPHANIE RICHARD, Director
Division of Administrative Services
Department of Military & Veterans Affairs (DMVA)
Anchorage, Alaska
POSITION STATEMENT: Answered questions on GO Bond Projects for
DMVA in SB 74.
STEVE MASTERMAN, Director
Division of Geological and Geophysical Surveys (DGGS)
Department of Natural Resources (DNR)
Fairbanks, Alaska
POSITION STATEMENT: Answered questions on GO Bond Projects for
DNR in SB 74.
JEFF BRUNO, Large Project Coordinator
Office of Project Management and Permitting
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions on GO Bond Projects in SB
74.
RICKY GEASE, Director
Division of Parks and Outdoor Recreation
Department of Natural Resources (DNR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions on GO Bond Projects for
DNR in SB 74.
NORM MCDONALD, Program Manager; Chief
Wildland Fire and Aviation Program
Division of Forestry
Department of Natural Resources (DNR)
Palmer, Alaska
POSITION STATEMENT: Answered questions on GO Bond projects for
DNR in SB 74.
ACTION NARRATIVE
1:32:20 PM
CHAIR ROBERT MYERS called the Senate Transportation Standing
Committee meeting to order at 1:32 p.m. Present at the call to
order were Senators Kiehl, Micciche, Shower, and Chair Myers.
Senator Bishop arrived shortly thereafter.
SB 74-G.O. BONDS: STATE INFRASTRUCTURE PROJECTS
1:32:57 PM
CHAIR MYERS announced the consideration of SENATE BILL NO. 74
"An Act providing for and relating to the issuance of general
obligation bonds for the purpose of paying the cost of state
infrastructure projects, including construction, communications,
major maintenance, public safety, and transportation projects;
and providing for an effective date."
1:33:40 PM
NEIL STEININGER, Director, Office of Management and Budget,
Office of the Governor, Juneau, Alaska, on behalf of the
governor, began a PowerPoint on SB 74, General Obligation (GO)
Bonds: State Infrastructure Projects on slide 1. He said he
would briefly review GO Bonds and explain why the administration
chose to put forth a GO Bond proposal. The proposed bond
issuance is for $354.6 million in projects and it COSTS$1.8
million in costs to issue the bonds. Once the GO Bonds were
issued, he anticipated the state's operating budget would
reflect $22.8 million in annual debt service. The state
estimated its savings would earn approximately 6.25 percent
annually. However, bond interest is historically low at below 2
percent, which is the reason that bonds are advantageous now, he
said.
MR. STEININGER directed attention to the graph to illustrate the
savings to the state by financing the projects rather than using
the CBR [Constitutional Budget Reserve] since the state will
earn the higher interest rate resulting in a favorable net
outcome. Financing these projects results in $273 million in
additional interest earnings compared to paying cash up-front.
MR. STEININGER advised members that bonding would require a
statewide special election within 120 days of adjournment. The
cost to hold a special election is about $2 million, he said.
1:36:19 PM
SENATOR MICCICHE referred to the line graph. He asked if the
$400 million shown in [20]47 was net, such that it included the
cost of the debt as a differential to the earnings at 6.25
percent.
MR. STEININGER clarified that the blue line represented the
trajectory of the state paying for the projects at $354.6
million. The orange line included all those other costs, such as
the debt service.
1:36:56 PM
SENATOR SHOWER asked if the administration had considered using
some of the $850 million in [The Coronavirus Response and Relief
Supplemental Appropriations Act of 2021] (CRRSA) Act funding.
MR. STEININGER acknowledged that the $850 million designated for
Alaska was in the current U.S. House bill. He pointed out that
was still under consideration by the U.S. Senate. While it
appeared likely that that the funding will pass, it's unknown at
this point. Once the state receives the funding the state can
consider how to spend it and if it will be directed to capital
infrastructure investment backfilling state revenues lost via
COVID-19, he said. He agreed that incurring debt for the long
term was an important policy decision for this body and the
executive branch to consider. He argued that CRRSA funding would
not really change due to the benefits to the state to use the GO
bonds, especially given the current interest rates at less than
2 percent.
1:38:44 PM
SENATOR BISHOP joined the meeting.
1:39:31 PM
SENATOR SHOWER asked if the administration had considered using
the CRSSA to offset some of the GO Bonds. He characterized it as
a philosophical alternative.
MR. STEININGER said some of the projects on the list might be
eligible for current CARES Act or CRSSA funding or from another
funding source.
1:40:51 PM
SENATOR KIEHL pointed out that the majority of the projects in
SB 74 were [Federal Highway Administration] FHWA projects. He
characterized the approach [taken in SB 74] as borrowing two
years of federal match up front and spreading it over two years
of capital budgets. He related his understanding that this would
not accelerate the inflow of federal funding but would replace
the annual match with GO bonds.
MR. STEININGER responded that this gets to the heart of how the
administration compiled its list of projects. One goal was to
help provide certainty to the construction industry by
identifying projects for the next two years. This could help the
construction industry make hiring decisions, he said. Another
goal was to identify the immediacy of need and geographic
distribution of projects that could get on the street as soon as
the GO bonds are issued. He indicated that the future obligation
of FHWA funding was one of the key areas to create certainty.
This would commit future STIP awards so it is a replacement of
general funds in future capital budgets, which means there's
less general fund need in those two years, he said.
1:42:55 PM
SENATOR KIEHL reiterated that most of the projects are not
additional projects but are ones that would be funded by general
funds for state match. Under this proposal the state would
borrow it instead, he said.
1:43:21 PM
CHAIR MYERS stated that Senator Bishop joined the meeting.
CHAIR MYERS anticipated the special election would occur in July
or August. He asked if most of the project work would be done in
2022.
MR. STEININGER said the timing will depend on when the bill
passes, voter approval occurs and the bonds are issued and sold.
Once voter approval is obtained, some projects could be started.
Contractors could begin by making hiring decisions and not wait
until summer to do so.
1:44:50 PM
SENATOR SHOWER remarked that nothing was free and unintended
consequences often occur. He asked Mr. Steininger to identify
any downsides to this approach.
1:45:29 PM
SENATOR MICCICHE remarked that many of these projects were not
match projects.
1:45:53 PM
MR. STEININGER responded to Senator Shower that he would try to
highlight areas. He acknowledged that one consideration was that
the interest would be paid on the $354 million over time. He
highlighted that there is an opportunity cost on earnings on the
funds but over time it pencils out as a net benefit.
1:47:01 PM
SENATOR MICCICHE reiterated that some projects were not federal
match and he would like to see those projects identified. He
suggested it was important to understand the stimulus value and
to expedite the projects based on the number of private versus
public sector projects and the number of Alaskan jobs for
projects that are biddable to the private sector. He asked if
the administration had considered other intrinsic values besides
the low interest rates.
MR. STEININGER acknowledged that only the STIP replacement
projects leverage federal funds. In terms of weighing the
stimulus effect of some of the projects, he suggested that the
testifiers could indicate whether the work would be contracted
out or would be done in-house. He surmised that much of the work
would be contracted out since many are larger projects but DOTPF
could address how it made those decisions.
1:49:21 PM
MR. STEININGER turned to slide 2 and highlighted the bond
projects by department which were listed on a spreadsheet in
members' packets titled, "GO Bond Project Listing updated
2/4/2021." These projects were ones the administration selected
from prior capital project requests including deferred
maintenance, from the Surface Transportation Improvement
Projects (STIP) or legacy projects. A large portion of the GO
Bonds designated to the Department of Transportation and Public
Facilities (DOTPF) were STIP and Aviation Improvement Projects
(AIP).
1:51:02 PM
SENATOR KIEHL asked him to address the single subject rule. The
courts have previously ruled that a capital projects is not a
single subject, he said.
MR. STEININGER said the Department of Law found similar bills
with a wider scope. The administration believes the GO Bond
proposal in SB 74 is allowable under the single subject rule
with the single subject being bonding for capital projects, he
said. He acknowledged that prior bond proposals have often been
split into multiple proposals but the administration does not
see a true legal issue with this proposal.
SENATOR KIEHL indicated he may wish to provide a Legislative
Legal opinion that states otherwise.
1:52:08 PM
CHAIR MYERS stated his intent was to go through the projects. He
turned to item 1 [reference number 56220], West Susitna Road
Access. He asked for the rationale. He pointed out that AIDEA
[Alaska Industrial Development and Export Authority] could bond
on its own so why would the state bond for AIDEA.
MR. STEININGER deferred to Mr. Weitzner.
1:53:08 PM
ALAN WEITZNER, Executive Director, Alaska Industrial Development
and Export Authority (AIDEA), Department of Commerce, Community
and Economic Development (DCCED), Anchorage, Alaska, reviewed
the GO Bond Projects in SB 74 on behalf of the governor. He
stated the $8.5 million for the West Susitna Access Project was
to support the early-stage environmental applications and
cultural resource activities that are necessary to get to a NEPA
permit and the Environmental Impact Statement (EIS) for the road
development. This appropriation is in line with what was
required for prior projects such as the Delong Mountain
Transportation System and the Ambler Access Road Project, he
said. Both projects were funded with initial appropriations to
undertake that type of work. The specific limitation for AIDEA,
per AIDEA's statutes is that any bonding would be subject to the
underlying financing plan, the project itself, and having the
ability to repay the bonding that AIDEA undertakes for it, he
said. That early stage undertakes activities to get to the EIS
review under NEPA [National Environmental Policy Act] and
ultimately arriving at a record of decision and bring it to a
funding stage for AIDEA, he said.
1:55:20 PM
SENATOR MICCICHE related his understanding that this project has
received $173 million in funding since 2008. He asked if the
$8.5 million was included in the plan.
MR. WEITZNER answered that the $8.5 million was for expansion of
road development and access development west of the Susitna
River reaching to the Yentna Mining District. He offered his
belief that the funding Senator Micciche referred to related to
the earlier allocations made for development within the Mat-Su
Borough (MSB) to the Little Susitna River.
1:56:02 PM
SENATOR KIEHL said it appeared that this project was not shovel
ready, such that this funding would relate to activities prior
to applying for permits.
MR. WEITZNER said this work is necessary to get the West Susitna
Access Project to a full access project. He explained that the
funding was similar to funding for the DeLong Mountain
Transportation System and the Ambler Access Projects. This
funding would be used to conduct field work and wetlands studies
under the NEPA permitting process to arrive at the Record of
Decision which would define the route. The Ambler Access Project
led to a Record of Decision and is in the final feasibility
phase, he said.
1:57:18 PM
SENATOR KIEHL related his understanding that these GO Bond
projects were ones that could be built right away or within 18
months. He asked him to explain the process that gets the
project to a pre-permitting process in lieu of a shovel ready
project or one that could begin within 18 months.
1:57:42 PM
MR. STEININGER acknowledged that most of this package was
directed towards shovel ready projects. The West Susitna Road
Access project was added as an effort to move the project
forward due to its long-term economic potential.
SENATOR KIEHL related his understanding that if the state is not
left with an asset, it would not have a capital project as
defined by the Alaska Supreme Court.
1:58:37 PM
CHAIR MYERS asked what feedback AIDEA has received from
residents.
MR. WEITZNER responded that the public comment showed concern
about the access, environmental impacts from the road project.
However, public comment indicated support due to the economic
benefits of the project. He related that AIDEA was in
partnership with the Mat-Su Borough for a phased feasibility
analysis of the West Susitna Access, which was initiated with
the early Roads to Resources (R2R). The Mat-Su Borough (MSB)
recognized the benefits of getting to the construction process.
This included an estimated 1,000 direct jobs during construction
along the access corridor, a greater utilization of Port
Mackenzie for enhanced natural resource exports, and ultimately
accessing the Yentna Mining District. This project would
increase access within the Mat-Su Borough to over 65,000 acres
of agricultural land and over 6 million acres of recreational
opportunities. The MSB has defined the West Susitna Access Road
as a public access road. Thus, the MSB would benefit from
opening the area west of the Susitna River. The state and MSB
would ultimately benefit from mining royalties, lease payments
and port fees generated once mining activities are fully
operational in the Yentna Mining District and the other
resources along the route. This has been the basis of the
discussions with the Mat-Su Borough. The stakeholders within the
MSB have articulated their concerns and AIDEA has begun to
address them.
2:01:12 PM
SENATOR SHOWER pointed out that sentiment on this project tended
to shake out as "environmentalists against development" or
"those favorable to resource development seeking responsible
resource development." As the Mat-Su Valley continues to grow,
many of its 110,000 residents tend to be generally positive
about resource development, especially since this project will
provide land, he said.
2:02:32 PM
CHAIR MYERS turned to page 2 [reference number 63272], Houston
Middle School Replacement Major Maintenance Grant Fund, then
turned to page 3, Major Maintenance Grant Fund for School Major
Maintenance [reference number 45658]. He said this funding is
for major maintenance for schools. He asked why this was funded
via grant funds rather than funding specific projects.
MR. STEININGER explained that this project was included in the
Major Maintenance [Grant] Fund (MMGF) rather than as an
individual project off the list. The MMGF funds capital projects
put forward by districts to the Department of Education and
Early Development (DEED). DEED has a robust process for ranking
and selecting projects on that list based on numerous factors.
The reason the administration did not apply the first $25
million to projects on DEED's list is because changes could
occur from the final list preparation and securing the funding.
For example, project costs may come in under budget and if so,
the funds could flow via the MMGF to the next project on the
list.
2:04:50 PM
SENATOR MICCICHE referred to the cut sheet which indicates the
maintenance list could be viewed on the education website
[https://education.alaska.gov/Facilities/initial/FY22Maintenance
InitialList.pdf]. He asked if the priority order would be
maintained per this list.
MR. STEININGER answered yes. He explained that DEED has
integrity in its process to rank projects which the
administration would respect.
2:05:44 PM
SENATOR KIEHL offered his support for the ranking process. He
referred to the [MMGF ranked list]. He related his understanding
that the 7th project on the list would total an aggregate of
$26.2 million. He asked how the administration arrived at $25
million.
MR. STEININGER explained that $25 million came from a baseline
of prior capital projects requested by the department. In prior
years, the funding has not been available or has fallen short.
The administration decided to use the baseline $25 million the
department has requested every year rather than to target the
aggregate amount.
SENATOR KIEHL remarked that this would mean the legislature must
then find general fund monies for the difference.
2:07:02 PM
CHAIR MYERS referred to page 4, Mt. Edgecumbe High School
Repairs [reference number 58544] for $7,882,000.
2:07:31 PM
SENATOR MICCICHE asked how many students attend Mt. Edgecumbe
High School.
MR. STEININGER deferred to DEED to answer.
2:08:04 PM
HEIDI TESHNER, Director, Finance and Support Services Division,
Department of Education and Early Development (DEED), Juneau,
Alaska, stated that this school year 374 students were enrolled,
but the average enrollment usually ranged from 400 to 425
students.
2:08:30 PM
SENATOR MICCICHE asked for details on the school's repairs. He
pointed out that the average replacement in the Mat-Su or
Houston was $9 million so he would like to learn more about the
$7.8 million in repairs.
MS. TESHNER agreed to do so. She elaborated that the $9 million
for the Houston Middle School was additional funding to complete
the $34 million total costs of the project.
2:09:28 PM
SENATOR BISHOP related his understanding that that DEED owns Mt.
Edgecumbe. He recalled that the boys' dormitory was an old WWII
barracks. Further, most students receive room and board at the
school and other students house with a host family, he said.
2:10:11 PM
CHAIR MYERS brought up pages 5-12, the Fairbanks Pioneer Home
roof and Flooring Replacement [reference number 45518],
Fairbanks Youth Facility [reference number 45505], Palmer Alaska
Veterans and Pioneers Home Roof Replacement [reference number
63262], Alaska Vocational Technical Center (AvTec) [reference
number 48821], Alaska Public Safety Communication Services
System Upgrade [reference number 54931] and there were no
questions.
CHAIR MYERS turned to page 13, Alcantra Armory and Arc-Flash
Improvements [reference number 63232] for $1.675 million.
2:11:17 PM
SENATOR KIEHL said he reviewed the detail sheets. He asked if
this request was for major maintenance.
MR. STEININGER indicated the department brought this project
forward several times.
2:12:06 PM
SENATOR SHOWER indicated this project was in his district. He
indicated it is a secondary command and control center. He said
he has toured the building and the ceiling tiles are falling
down. It was used during the recent earthquake but it was a
nightmare to make it work. The Department of Military & Veterans
Affairs (DMVA) has requested these upgrades for a number of
years. He indicated a much larger future project would create a
new complex. He highlighted that the Alcantra Armory has issues.
2:13:19 PM
STEPHANIE RICHARD, Director, Division of Administrative
Services, Department of Military & Veterans Affairs (DMVA),
Anchorage, Alaska, said the Alcantra Armory is used as a
secondary command and control center for DMVA, as the National
Guard Joint Operation Center, and as the State's Emergency
Operations Center. This funding request would help bring the
facility up to state, federal, and National Guard Bureau codes.
She said a big portion of the funding is for electronic
upgrades, sleeping facilities, and preventative maintenance. The
safety aspect is for the Arc-Flash improvements to protect the
occupants working on electrical and electronic systems. She
summarized that the funding was to bring this facility up to
date to serve as a Secondary Command and Control Center.
SENATOR KIEHL said he was not questioning the need for the
project, but merely pointing out that routine maintenance is not
eligible for GO Bonding as per the attorney general's ruling in
the 1990s. He suggested that the funding may need to come from
some other source.
2:15:24 PM
CHAIR MYERS turned to the Heney Range Shelter Replacement
[reference number 63229] on page 15, then the Statewide Tower
Lighting System Replacement [reference number 63230 on page 16,
the Summit Lake Foundation Repairs [reference number 63231] on
page 18 and noted no questions. He turned to the Arctic
Strategic Transportation and Resource Project Survey, Coastal
Hazard Assessment, and Petroleum Geology Fieldwork [reference
number 62649] on page 19.
2:16:35 PM
SENATOR KIEHL said the backup outlines surveying and field work
but he does not see a tangible asset outcome for the state.
MR. STEININGER deferred to Mr. Masterman.
2:17:14 PM
STEVE MASTERMAN, Director, Division of Geological and
Geophysical Surveys (DGGS), Department of Natural Resources
(DNR), Fairbanks, Alaska, explained that the project consisted
of sand and gravel survey resulting in an enhanced understanding
of the sand and gravel resources across the North Slope. This
information will be public information that will be helpful for
communities and resource developers for community roads and
airports, he said. The Coastal Hazards relates to data
collection on erosion rates and flooding. It would identify
areas near North Slope coastal communities that are vulnerable
to flooding and coastal erosion. This data could help the
coastal communities protect against erosion and flooding.
Petroleum geology field work will provide publicly available
geological information on oil and gas resources on state land
between the National Petroleum Reserve in Alaska (NPRA) and ANWR
[Arctic National Wildlife Refuge]. He explained that this was
included as a capital project because DGGS's small operating
budget does not have resources allocated for this work.
2:19:28 PM
SENATOR MICCICHE pointed out that in 2017, the legislature
appropriated $7.3 million for the initial field work on ASTAR
[Arctic Strategic Transportation and Resources]. The legislature
voted in support of the ASTAR project as a whole. He asked if
the 2017 funding was insufficient since it does not seem like
this funding was for a new phase.
MR. MASTERMAN explained that part of the work in Phase 1 was to
identify data gaps. Phase 2 was the next step to fill in the
data gaps that were identified in Phase 1, including sand and
gravel work, flood and erosion, and petroleum geology work.
2:21:28 PM
JEFF BRUNO, Large Project Coordinator, Office of Project
Management and Permitting, Department of Natural Resources
(DNR), Anchorage, Alaska, acknowledged this funding was for the
next phase of the project. Initially, Phase 1 provided funds for
stakeholder engagement in communities in the North Slope
Borough, which resulted in numerous reports. This funding will
identify the data gaps. He reported that gravel was an important
consideration since it was expensive to transport. Identifying
local locations of quality sand and gravel could help
communities move closer to achieving priority infrastructure
projects.
2:22:35 PM
SENATOR MICCICHE said the summary talks about facilitating oil
and gas leasing and complementary planning efforts. He related
his understanding that the $7 million was not used since the
department already has an oil and gas division that works on
leasing.
MR. BRUNO explained ASTAR's focus was on federal lands and to
help communities interact and move community projects forward.
He acknowledged that the oil and gas leasing sometimes overlap
with ASTAR but phase 2 has a different focus.
2:24:03 PM
SENATOR BISHOP asked for the total cost of the project to get to
a final investment decision. He asked them to get back to the
committee. He further asked for an assessment on community
outreach along the route.
MR. BRUNO replied that the goal was to give communities
significant control over projects, including adding and
subtracting projects. The communities need significant
infrastructure, especially on projects that do not open access
to the public. He indicated significant community support for
ASTAR which has been one of the big successes of this program.
He highlighted that this was in partnership with the North Slope
Borough, including borough funding for the project.
2:26:03 PM
CHAIR MYERS recalled he mentioned that the projects were
primarily on federal lands. He said it seems like the state is
doing the federal government's capital project.
MR. BRUNO acknowledged that the state coordinates with the
federal government and partners on projects. He stated that the
state considers extending infrastructure to places with resource
development potential. The state enjoys a number of benefits
from the projects, he said.
2:26:56 PM
CHAIR MYERS asked if the federal government would also provide
funding for the program later.
MR. BRUNO responded that it depends on the program. The Bureau
of Land Management [BLM] and the North Slope Borough helped fund
the gravel survey. DNR also looked at the gravel survey in the
east region of the NPRA near the Colville River and towards the
community of Utqiagvik. He offered his view that the federal
government tends to partner with the state rather than locate
the gravel resources but it has been successful.
2:28:05 PM
MR. MASTERMAN added that each of the three components have
leveraged federal funds to assist DNR with its efforts. He
stated that the Coastal and Hazards portion has leveraged funds
from the Denali Commission, and ANTHC [Alaska Native Tribal
Health Consortium] just finalized a $1.1 million grant to DNR.
DNR anticipates receiving over $1 million for the petroleum
geology and is leveraging funds on all phases of this project,
he said. He characterized the project as having good
participation.
2:28:58 PM
CHAIR MYERS turned to the Fairbanks to Seward Multi-Use
Recreation Trail [reference number 63332] on page 22. He asked
for an estimated completion date for the trail.
MR. STEININGER answered that the $13.2 million was for planning
and construction activity, including campgrounds, trail
connections, restrooms, and signage.
2:30:17 PM
RICKY GEASE, Director, Division of Parks and Outdoor Recreation,
Department of Natural Resources (DNR), Anchorage, Alaska
characterized the Fairbanks to Seward Multi-Use Recreation Trail
as a worthy group of projects. He indicated that most of the
funds would be used for construction projects listed, including
reroutes in Chugach State Park, constructing the Mat-Su
Convention and Visitors Bureau Gateway Visitors Center,
constructing a series of huts in Denali State Park Hut, trail
expansion in Denali State Park from Curry Ridge Trail to Kesugi
Ridge and connecting trails in the Equinox Marathon Travel
Completion project throughout central Fairbanks. This funding
would primarily be focused on the trail work. He pointed out
that the organization Alaska Trails has put forth additional
effort on this project, which adds to components of the Alaska
Long Trail Project [also known as the Long Trail].
2:31:38 PM
SENATOR MICCICHE highlighted that the state faces critical
highway integrity projects and crumbling schools. He asked how
this project rose to the top when considering key priorities
throughout the state.
MR. GEASE explained that these projects were identified as
priorities in the Alaska Trails Spring 2020 documents. That
nonprofit organization has done further work on it and refined
the list. The concept for the Alaska Long Trail was to have a
signature trail in Alaska like the Appalachian Trail or Pacific
Crest trail system. The Fairbanks to Seward component would add
a quiver into the independent travel market. This past year DNR
has seen a record number of Alaskans out recreating and a
continuing segment of independent travelers. The cruise ship
market has been at a standstill. This is one of the highest
priority projects for the outdoor recreation industry moving
forward, he said. The individual components could be considered
a work in progress. He stated that inclusion of this project in
the GO Bond proposal could fund a variety of trail projects and
get the Long Trail much closer to completion.
2:34:58 PM
SENATOR MICCICHE asked him to provide the committee with a
comprehensive plan. He said he is philosophically supportive of
the Fairbanks to Seward trail system. However, he would like to
better understand how these individual projects move that
project forward. It would seem like the first step would be to
build the trail and adding nice components would come later. He
expressed an interest in knowing how these individual projects
were selected.
MR. GEASE said he would do so. He related his understanding that
Alaska Trails was working with OMB to prepare materials to share
with legislators.
2:35:55 PM
SENATOR BISHOP asked for the annual operation and maintenance
costs once the trail work was completed.
MR. GEASE answered that maintenance costs would depend on how
well the trails were initially constructed. DNR focuses on
designing trails to sustainable standards. Typically, the trails
would have a 10-to-30-year life span, depending on the location.
For example, trails through a rain forest in Kachemak Bay with
longer growing seasons result in the need to prune and clear the
trail more frequently which leads to higher maintenance costs.
However, a trail going over an alpine tundra zone on the Kesugi
Ridge should last longer. DNR has found that using sustainable
design and building trails to last rather than constantly
repairing them has proven to be cost effective, he said.
2:37:41 PM
SENATOR BISHOP highlighted that the trails would still have
annual maintenance and operation costs, which the legislature
will need when the bill goes to Senate Finance.
MR. GEASE agreed to provide annual maintenance and operation
costs. He explained that the Long Trail was not exclusively in
Alaska State Parks. Although it goes through some of the state's
parks, including the Denali State Park and Chugach State Park,
other components would include maintenance and operation costs.
2:38:49 PM
CHAIR MYERS turned to the Statewide Firebreak Construction
Program, [reference number 62961] on page 23. He asked for more
detail on the firebreaks such as their location. Alaska is a
large state and firebreaks cannot be placed everywhere, he said.
MR. STEININGER deferred to Norm McDonald.
2:39:56 PM
NORM MCDONALD, Program Manager; Chief, Wildland Fire and
Aviation Program, Division of Forestry, Department of Natural
Resources (DNR), Palmer, Alaska, agreed that the request did not
provide a lot of information. These projects have been federally
funded since 2001 through grants, primarily the Western Wildland
Urban Interface Grants (WUI). The grants focus on wildlands with
most of the projects in larger communities or along the highway
system. Some projects are ongoing in some villages in Western
Alaska related to high danger hazard areas. He explained that
part of this funding would cover maintenance of existing fuel
breaks, which is not covered by grant funding. Depending on the
fuel type, maintenance would be done every 10 to 30 years. For
example, the Murphy Dome firebreak protected homes valued at
$300 million during the Shovel Creek fire. It took about ten
years to create that fire break. It was completed in about 2010
but is in need of maintenance, he said. The division's program
currently has about $9.3 million of unfunded firebreaks [also
known as fuel breaks]. This funding will provide ongoing
strategic planning, with the division assisting communities to
develop their Community Wildfire Protection Plans. The Division
of Forestry and other protection agencies would work with local
governments to identify hazard fuel areas and evacuation routes.
He offered to provide a list of projects to the committee.
2:42:21 PM
SENATOR SHOWER related that the Mat-Su Borough allows the public
to cut firewood in certain areas or to remove cut firewood from
designated areas. The MSB has also been discussing selling
timber to Asian markets, he said. He offered to discuss this
outside the meeting.
MR. MCDONALD acknowledged that the division was aware of
discussions for timber sales. He stated that there was an
ongoing effort to make firewood available to locals. Some of
these projects are large scope and involve local contractors and
heavy equipment, he said.
2:43:34 PM
CHAIR MYERS requested a priority list.
MR. MCDONALD agreed to provide a priority list.
2:44:01 PM
SENATOR MYERS referred to Statewide Park Sanitation and Facility
Upgrades, [reference number 43321] on page 24.
2:44:12 PM
SENATOR KIEHL related his understanding that the Division of
State Parks has a deferred maintenance/major maintenance list of
over $20 million. He asked how the department set the cut point
at $2 million.
MR. STEININGER explained that many of these projects stemmed
from prior capital project requests that could not be
accommodated. DNR put forward this request as its highest
priority item.
SENATOR KIEHL recalled earlier testimony on the value of
attracting independent travelers to the state. He said it was a
shame to see this bond request for such a small amount.
2:45:33 PM
SENATOR KIEHL highlighted that several prior attorneys general
opinions indicated that maintenance was not considered as a
capital project for the purposes of the [Alaska] Constitution's
requirement on bonding. He noted several items on the request,
including insulating a pump house and replacing bunks. He asked
how these projects can be considered as capital projects under
the Alaska Constitution.
MR. STEININGER explained that maintenance on state facilities
often use "maintenance" when it actually refers to replacement
or upgrade of facilities. It is not really annual maintenance or
deferred maintenance, he said. The strictest definition would be
to bring it to its initial working condition. He related that
these projects go beyond patching a roof or cleaning items.
These items would include replacing facilities with more
functional or attractive ones. He acknowledged that some
projects might fall in a gray area. He related that this list of
projects was sent to the Department of Law prior for review. The
administration believes these items will be allowable for
bonding, he said.
2:48:10 PM
SENATOR KIEHL asked Mr. Steininger if he would share some of the
Department of Law opinions.
MR. STEININGER said he would discuss this with the Department of
Law.
2:48:31 PM
CHAIR MYERS referred to the Wildland Fire Engine Replacement,
[reference number 33955] on page 29.
SENATOR KIEHL pointed out that in 1979 the attorney general
ruled that fire engines are not considered capital improvements
for the purpose of the [Alaska] Constitution's limit on bonding.
MR. STEININGER offered to discuss this with the Department of
Law (DOL) and report back to the committee.
SENATOR MICCICHE stated this issue was worthy of discussion. He
said it would be nice to have those answers.
2:49:47 PM
CHAIR MYERS said the committee would take this request up at a
future hearing to give the administration a chance to respond.
2:49:55 PM
SENATOR MYERS turned to Wildland Firefighting Aircraft
Replacement [reference number 54937] on page 30. He acknowledged
that Senator Kiehl's capital project eligibility objection would
apply.
2:50:06 PM
SENATOR SHOWER indicated that he does not agree that the Shrike
Commander was the right aircraft for the division. He suggested
that the Cessna Caravan aircraft would be better. Although the
Caravan is slower it also had the other capacities, he said. He
acknowledged the need for an aircraft for the firefighting
efforts. He offered to discuss this proposal outside the
meeting.
2:51:19 PM
MR. STEININGER indicated he would ask Norm McDonald and Cheri
Lowenstein [Office of the Governor] to contact him.
2:51:29 PM
CHAIR MYERS turned to Alaska Wildlife Troopers Marine
Enforcement Repair and Replacement, [reference number 63160] on
page 34, then to Boating Upgrades, Haul Outs, and Vessel
Replacement [reference number 63164] on page 36.
SENATOR KIEHL asked for more detail on the two medium class
vessels and their purpose, such as Wildlife trooper patrols or
Trooper patrols and where the vessel would be used.
MR. STEININGER offered to research this and report back to the
committee.
2:52:45 PM
CHAIR MYERS turned to Airport Way Improvements [reference number
63303] on page 37. He turned to Anton Anderson Memorial
(Whittier) Tunnel [reference number 63300] on page 38.
2:53:15 PM
SENATOR SHOWER expressed an interest in obtaining additional
information.
MR. STEININGER agreed to do so.
2:53:40 PM
SENATOR MICCICHE offered his support for public safety and
transportation projects but stated he was somewhat resistant on
other projects.
2:54:14 PM
CHAIR MYERS turned to the Bethel Airport [reference number
63287] on page 39.
SENATOR KIEHL said it appears as though the Bethel Airport
project is AIP [Airport Improvement Project] eligible. He asked
the reason to request 100 percent bonding for this project.
MR. STEININGER explained that some airport projects are AIP
eligible and other projects may not be. He deferred to John
Binder, Department of Transportation and Public Facilities to
respond. He pointed out that AIP airport projects were similar
to how DOT manages highway projects by proposing bonding for the
match.
SENATOR KIEHL asked if he said that the GO Bond projects could
be reallocated.
MR. STEININGER explained the way that the administration funds
federal highway STIP projects was to bond for the state match.
In the same way, if airport project turned out to be AIP
eligible projects, this might be a better funding process. He
explained that when the administration compiled its list of
airports requiring funding, it considered the distribution of
funding to airports throughout the state in terms of projects
that could be quickly deployed and for geographic distribution.
He reiterated that Mr. Binder could speak to the specific
projects and identify the AIP eligible ones.
2:57:09 PM
SENATOR SHOWER expressed his interest, generally, in obtaining
more detail on airport projects. For example, the state has
recurring expenses for airport lighting. It would be relevant to
consider if this is due to vandalism or to identify the cause of
lighting problems rather than to continue to fund replacements.
Communities have some responsibility to police their airports,
he said.
[SB 74 was held in committee].
2:58:50 PM
There being no further business to come before the committee,
Chair Myers adjourned the Senate Transportation Standing
Committee meeting at 2:58 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB74 GO Bond Project Listing.pdf |
STRA 3/2/2021 1:30:00 PM |
SB 74 |
| SB74 GO Bond Back-Up Packet.pdf |
STRA 3/2/2021 1:30:00 PM |
SB 74 |
| SB74 GO Bonds Presentation 3.2.21.pdf |
STRA 3/2/2021 1:30:00 PM |
SB 74 |
| DEED FY22 Maintenance priority list.pdf |
STRA 3/2/2021 1:30:00 PM |
SB 74 |