Legislature(2021 - 2022)ADAMS 519
05/05/2021 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB70 | |
| HB55 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 70 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 55 | TELECONFERENCED | |
HOUSE BILL NO. 70
"An Act making appropriations, including capital
appropriations, reappropriations, and other
appropriations; making supplemental appropriations;
making appropriations to capitalize funds; and
providing for an effective date."
1:34:11 PM
ROB CARPENTER, DEPUTY COMMISSIONER, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES, introduced a
PowerPoint presentation titled "Alaska Department of
Transportation and Public Facilities: House Finance
Committee Capital Program and FY2022 Request Overview,"
dated May 5, 2021 (copy on file). He addressed a brief
presentation outline on slide 2.
Mr. Carpenter moved to slide 3 and reviewed the Department
of Transportation and Public Facilities (DOT) capital
budget funding summary. He highlighted that there was a
total capital request of $1.12 billion, with approximately
$950 million of federal receipts, $19 million in
Unrestricted General Funds (UGF), $1 million in Designated
General Funds (DGF), and other state funds totaling $144.7
million. He pointed out the funding sources listed to the
left including sources that comprised 'other' funds
including highway working capital funds that funded the
state equipment fleet, international airport funds,
statutory designed program receipts, Alaska Housing Finance
Corporation (AHFC) bonds, and a small portion of UGF.
1:37:05 PM
DOM PANNONE, ADMINISTRATIVE SERVICES DIRECTOR, DEPARTMENT
OF TRANSPORTATION AND PUBLIC FACILITIES, OFFICE OF
MANAGEMENT AND BUDGET, OFFICE OF THE GOVERNOR, addressed
state capital appropriations on slide 4. He reviewed
programmatic and recurring requests on the left of the
slide. Items included mental health coordinated
transportation and vehicles, the Alaska Marine Highway
System (AMHS) vessel overhaul, the state equipment fleet,
federal-aid highway match credits, and federal program
match. He elaborated on each of the items. He noted that
the AMHS overhaul was a capital investment to keep the
ships running and improve short-side infrastructure. He
discussed the department's use of the highway equipment
working capital fund, through which it paid a rate on
depreciating assets and received credits. He discussed the
federal highway match credits, through which the department
used the authority to request match credits for earnings
from a capital project for items such as selling a right-
of-way. He would address the federal program match on slide
5. He moved to the right of slide 4 and reviewed single,
one-time items including a computerized maintenance
management system and weigh station scale repairs. He noted
that there was a significant list of needs to extend the
life of several weigh stations.
1:40:43 PM
Vice-Chair Ortiz looked at the programmatic/recurring
annual requests on slide 4. He asked if the figures were
constant or changed annually.
Mr. Pannone answered that the figures varied occasionally.
He used the example of the current year's request of $15
million, with prior year's requests of $18.5 million and
$14.9 million. He continued that the state equipment fleet
had been steady, with the current year's appropriation at
$15 million, and an increase of $7 million proposed for FY
22 as the replacement list had grown. He stated that the
amount varied but hovered around the amounts listed.
Representative LeBon looked at the weigh station scale
repairs item on slide 4. He asked about the relationship
between weigh station repairs and federal highway dollars.
Mr. Pannone replied that there were requirements for the
state to ensure the integrity of its assets, which was the
reason that measurement standards and commercial vehicle
compliance was housed in DOT. He continued that there was a
specific set of funding that could be in jeopardy if the
state wasn't protecting its assets from overweight vehicles
or certifying that the roads were used without damage.
Representative LeBon pointed out that the purpose of the
weigh stations was not to harass truckers but to maintain
and protect roads to qualify for federal highway dollars.
1:43:53 PM
Representative Thompson believed there were portable,
temporary weigh scales around the state to put in areas
temporarily. He asked if the portable scales were included
in the funding request.
Mr. Pannone answered that the scales were permanent and not
temporary. The fixed weigh station scales were in seven
locations.
Co-Chair Merrick asked for some examples of what might
qualify for the Mental Health Coordinated Transportation
Vehicles Grant.
Mr. Pannone replied thought there was a community
transportation transit agency in Juneau and knew there was
one in Anchorage. He deferred the question to a colleague.
JAMES MARKS, PROGRAM DEVELOPMENT, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES (via teleconference),
agreed with the remarks by Mr. Pannone. He explained that
the Alaska Mental Health Trust Authority (AMHTA) was part
of the rural transit agency for granting out for people
with disabilities across the state. He would need to follow
up with a more comprehensive list.
1:45:46 PM
Mr. Carpenter addressed federal programs and state match on
slide 5. He mentioned the Federal Highway Administration
(FHWA) funding, which funded road construction,
reconstruction, design and engineering. There was a 10
percent state match for a total of $71.2 million for
surface transportation program. The Airport Capital
Improvement Program (ACIP) had $269 million in federal
receipts with a 6.25 percent match of approximately $14.7
million. The funding was guided by the Airport Capital
Improvement Plan. He mentioned that the state was federally
required to provide a document called the Statewide
Transportation Improvement Program (STIP), which showed
planning for all the state's federal highway construction.
Mr. Marks provided a primer on the STIP on slide 6. The
STIP was a four-year plan required by federal regulations
that listed out all the federally funded and regionally
significant surface transportation projects within the
state. The STIP had to be fiscally constrained and was
required to be developed with a public process. The STIP
was approved by FHWA or the Federal Transit Administration
(FTA). He explained that a failure to comply with federal
regulations and requirements would jeopardize federal
funding for transportation infrastructure in Alaska.
1:48:58 PM
Mr. Marks advanced to slide 7 and reviewed a handful of
illustrations showing the STIP process. He read from
prepared remarks. He highlighted a box entitled 'Needs'
Sources' that showed how project needs were identified and
where the needs came from, including sources such as
performance data, condition data, local needs, and military
and defense needs. He spoke to the yellow box entitled
'Needs Evaluation and Management," which showed a process
flow chart. The department utilized a needs database that
was routinely evaluated and was intended to be a
comprehensive list notwithstanding funding availability.
Mr. Marks continued to speak to slide 7. The red box showed
a flow chart depicting the process of the call for
projects, which was fed by the needs list and happened
periodically every one to two years. When the need for more
projects was identified, project scoring and public comment
was engaged. He discussed the public comment process. He
discussed the project selection process by which other
regional entities and partners were solicited for input.
Project packages were formed and evaluated. He cited that
the Project Evaluation Board (PEB) scored, ranked, and
prioritized projects. The PEB process was a public meeting
open to participation from the public, and the department
hoped to host future events virtually. The PEB process
submitted scoring to the commissioner's office. He noted
that the icon depicting little yellow people indicated
times at which the department actively engaged with the
public for input on the STIP.
Mr. Marks addressed the STIP Cycle illustrated by the flow
chart in the blue box. The STIP cycle was a four-year
program that was updated every two years. He discussed the
activities of the department including establishing
parameters, soliciting regional input, and balanced the
projects' fiscal considerations before putting the STIP out
for public notice. The process was federally required,
highly public, and usually took about 45 days. Public
notice comments were directed to those close to the
project. After public notice, the department engaged in
getting the approval of the FHWA and the FTA, after which
the department would publish its fully approved and
executed STIP.
1:54:40 PM
Mr. Marks continued reading from a prepared statement
related to the STIP process. He reminded that the blue box
showed a single STIP cycle that typically took 2 years. He
noted that sometimes updates were needed due to
contingencies. He discussed changes to the STIP in two
categories: minor changes that could be an administrative
modification, and larger changes including adding,
deleting, or changing the scope of work required a STIP
amendment that required the full STIP process including
federal approval. Developing a STIP could take up to two
years and amending a STIP could take up to 220 days.
Co-Chair Merrick noted that Representative Carpenter had
joined the meeting.
Vice-Chair Ortiz looked at needs' sources on the upper left
of the slide and asked for a brief description of condition
and performance data.
Mr. Marks replied explained that the department monitored
and measured all its condition and performance of
facilities and assets, which was required federally. Some
of the performance measures could include monitoring
vehicle miles travelled or data on average daily traffic.
Condition data could include an actual condition of an
asset such as rutting or cracking. The data were published
on the federal score card not only the asset, but any
correlated assets.
1:57:38 PM
Vice-Chair Ortiz looked at the STIP cycle on slide 7 and
observed that it required commissioner approval. He asked
if the commissioner could modify the STIP as much as
desired after the entire process.
Mr. Marks replied in the negative. He clarified that in
practice the commissioner would approve what had already
been approved and public noticed. Any changes after federal
approval would require going back to the public.
Vice-Chair Ortiz asked what the arrow showing
administrative modification meant (shown to the left of the
commissioner's approval box under the STIP cycle).
Mr. Marks answered that administrative modifications were
changes that small in nature, such as a shifting a project
schedule or a change order. Additions or changes to
projects or phases would have to go through an amendment
and the full public involvement process.
Vice-Chair Ortiz asked if it was common for a project to
stay on the STIP for longer than four years. He asked if it
was not uncommon for projects to remain on the STIP for six
to eight years.
Mr. Marks answered in the affirmative. He explained that
project delivery ranged from three to seven (or more)
years. The longer view items remained on the STIP.
2:00:44 PM
Representative LeBon referenced an intersection in
Fairbanks that connected his district with Representative
Thompson's district. He believed there needed an overpass
for safety and efficiency reasons. He asked if safety and
efficiency factored into the department's decisions. He
thought the intersection being proposed was unique and
cheaper than other designs. He thought traffic was
increasing in the area.
Mr. Carpenter asked Mr. Marks to talk about how projects
were scored.
Mr. Marks asked for clarification.
Representative LeBon was not sure whether his question
about a specific project was fair. He was concerned about
an intersection in Fairbanks and thought an overpass would
be prudent for safety.
Mr. Marks responded that there were a number of criteria
including safety, project cost, economic benefit as well as
other factors. He did not know how the particular project
was scored and he could follow up with information.
Representative LeBon referenced the needs sources and asked
about military and defense needs. He noted that the
intersection he mentioned was at the entrance to Fort
Wainwright, and reiterated his expectation of increased
traffic in the area.
Co-Chair Merrick asked if it would be fair to say that
legislators had no say in which projects were on the STIP
and the order in which the projects were listed.
Mr. Marks did not believe it was necessarily true to say
legislators had no say in which projects were on the STIP.
He explained that it was a public process, and the
department was engaged with all parties including the
legislature. He noted that there were staff dedicated to
working with the legislature, and the department actively
solicited input. He shared that he and Mr. Carpenter had
discussed ways to improve the collaboration.
2:05:49 PM
Mr. Carpenter emphasized the public portion of the process.
He referenced the layout showing a group of people on slide
7 reflecting public participation and solicitation of
comments.
Co-Chair Merrick was trying to illustrate that legislators
did not create the list and there was a public process.
Representative Wool assumed that not every DOT project was
on the STIP.
Mr. Carpenter clarified that virtually all of the DOT
projects were included on the STIP. He noted that almost
all of the department's capital program ran through the
federal program. He cited that every phase of projects from
design to construction ran through the STIP.
Mr. Pannone elaborated that some small projects could be
paid for out of DOT's maintenance and operating budget. He
reiterated that federal dollars, which was almost all of
the department's surface transportation program, came from
the STIP.
Mr. Marks added that there were a number of projects and
programs in the STIP. He used the example of the statewide
regional maintenance project was comprised of a whole host
of smaller projects during the year.
2:08:54 PM
Representative Wool referenced public input in the STIP
process. He acknowledged that the department took public
input into account. He referenced a roundabout project that
had been done near Chena Hot Springs that had received
public opposition but had been constructed anyway. He noted
that a previous legislator had de-funded the item in the
budget. He thought the only supporters were from DOT. He
wondered how effective public input was when there was a
divergence of opinion.
Mr. Carpenter appreciated Representative Wool's points. He
noted that decisions often came down to safety, which could
outweigh public input. He cited that the department
encouraged public input and often changed or amended
routes. He offered to provide more detail on the
roundabouts.
Representative Wool asked for detail on socioeconomic needs
included in the STIP needs' sources box on slide 7.
Mr. Marks answered that the items were identified
internally or through collaboration with local official
partners which identified projects of economic importance
or things that might boost the economy such as improving
congestion in particular freight corridors.
Representative Wool recalled a proposition for a road
improvement in Fairbanks which had caused a great deal of
uproar, and he believed the department had listened to the
public input.
Co-Chair Merrick considered ongoing programs in the STIP.
She asked if the Glenn Highway fell into the category.
Mr. Marks answered in the negative. He explained that the
Glenn Highway and other large highways would be distinct
projects in the STIP in which work was done on one chunk at
a time.
2:14:13 PM
Mr. Marks moved to slide 8 titled "STIP: Federal Limitation
Over Time." He reviewed the slide with prepared remarks. He
noted that federal funding was either portioned via a
formula or allocated to the department. He continued that
FHWA placed a limitation on programming. He noted that the
department was currently in federal FY 21, so the numbers
could change before the year was complete. He pointed out
that the projections for FY 21 appeared larger, chiefly due
to the off-funding signified by the grey bars on the chart,
and represented preparation of Coronavirus Response and
Relief Supplemental Appropriations Act (CRRSAA) funding
that could be available for the capital program.
Mr. Marks turned to slide 9 titled "STIP: Federal
Obligations by Year." He explained that an obligation
occurred when the department executed a federal aid
agreement with the FHWA for a specific phase of a project
in the STIP. He pointed out the bars representing different
regions and noted that the bar graph did not evenly line up
with the graph on the previous slide, because of two
factors - the lifespan of funds, and project delivery life
cycle. The life cycle could take from three to seven years
to design and construct the project. He pointed out the FY
13 through FY 15 showed higher amounts due to projects
developed under American Recovery and Reinvestment Act
(ARRA) coming into the construction phase of work.
Mr. Marks pointed out that AMHS was represented by the
yellow bar and the distribution might appear
disproportionately low, due to confounders in the data. He
discussed account variation that allowed for flexibility in
funds management. He cited accounting conversions in
certain years, as well as a significant overlap in regional
efforts that could also confound the data. He cited $90
million in funding obligated the previous year for the
Ketchikan Gateway Borough under the south coast region. He
noted that a large portion of total AMHS funding was found
in the operating budget and what was seen on the graph was
only federal capital obligations. Obligations were
currently underway for the year, and the graph broke out
CRRSAA funds.
2:18:15 PM
Representative LeBon looked at the colored bars showing two
shades of blue for northern areas and statewide areas. He
wondered if DOT viewed the Dalton Highway as a statewide
highway or a northern region highway.
Mr. Marks replied that the Dalton Highway fell under
northern region projects.
Representative LeBon suggested that the Dalton Highway
benefitted the entire state, and the northern region should
not be solely responsible for funding the project.
Mr. Carpenter agreed with the comment related to the
statewide significance of the Dalton Highway. He thought
that the Legislative Finance Division considered the impact
of projects versus its geographic classifications. He noted
the statewide bar covered programs in the STIP that were
truly statewide geographical programs.
Representative Wool believed in the geographic distribution
of assets. He mentioned the Port of Anchorage, which many
people called the Port of Alaska because of the large
distribution of goods.
2:21:00 PM
JOHN BINDER, DEPUTY COMMISSIONER, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES (via teleconference),
turned to slide 10 titled "Airport Project Evaluation Board
(APEB)." He discussed the ACIP, which mirrored the STIP in
many ways. He explained that there were differences in how
the Federal Aviation Administration (FAA) handled things
compared to the FHWA. The FAA did not require public
approval or public notice of the spending plan but engaged
with the public during project development. Needs were
developed in close involvement with stakeholders, then
evaluated by APEB. He mentioned the Statewide Division of
Aviation, and the ACIP, which scored projects based on
specific criteria. The criteria were related closely with
the FAA's nationally required criteria. There were needs
varying from the FAA standard in different states. The
projects were prioritized on a statewide basis, and then
fit into the FAA's national priority ranking. The ACIP
development was a five-year rolling plan that included
scored projects from the APEB. The department tried to hold
projects harmless once within two years of project
construction. The department was able to insert projects in
the event of an emergency or natural disaster.
2:24:53 PM
Mr. Binder addressed slide 11 titled "Airport Improvement
Program (AIP) for DOT & PF Airports in FFY 2020." He
pondered the question of how funds got to Alaska and
informed that Alaska was its own FAA region, which
benefitted the state tremendously. The funding amounts were
formula-driven with consideration of several factors
including numbers of passengers and cargo. There were
approximately 25 airports in Alaska that were designated as
"primary" based on the number of passengers. The state
apportionment was based on the size of land mass and the
population. Due to the lack of infrastructure in Alaska,
Congress established the Alaska supplemental, which was a
special additional federal appropriation for projects
selected by the FAA. After nationwide allocation, the FAA
had a remaining pot of discretionary funds for projects
ranked in priority. In addition, funds unused by other
states that were not able to use their entitlement were
rolled into the discretionary fund.
Representative Edgmon shared that his district experienced
high airport traffic volumes in the summer. He asked how
the department estimated airport traffic.
Mr. Binder answered that the FAA based the funds on
reported passengers from the prior year. Some airlines were
good about reporting the figures to the FAA, while others
were not. The numbers were rolled into the formulas for the
following year.
Representative Edgmon referenced RAVN Air and thought the
FAA should have good numbers. He stated that a small place
like Bristol Bay could get upwards of $100,000 people per
year. He thought it would be interesting to get a better
sense of the airport reports. He mentioned airport and
cargo volume in Bethel and Nome. He asked if it was
possible to get the information.
2:29:32 PM
Mr. Binder answered that the department could pull up the
reported data from previous years. The department would
work with the air carriers for passenger estimates for the
present and future.
Representative Edgmon asked if the information went to the
Department of Labor and Workforce Development for
statistical purposes, or if the information only went to
DOT.
Mr. Binder replied that the number was reported to the
United States Department of Transportation's T100 data,
which tracked passenger and cargo volumes at airports
nationwide.
Co-Chair Merrick looked at cargo entitlements at the top of
slide 11. She asked about the landed weight for the
Anchorage International Airport.
Mr. Binder would follow up with the information.
Co-Chair Merrick was curious about the number because she
believed the Anchorage airport was one of the top cargo
airports in the world.
Mr. Binder moved to slide 12 and addressed the Alaska
International Airport System (AIAS) capital funding based
on FY 20. He noted that AIAS was an enterprise fund system,
were self-sustaining (per statute), and did not use any
state dollars. He continued that AIAS generated about $40
million in ACIP funding each year. He pointed out that the
amount was a little low in FY 20 due to no large projects
at the time. He reiterated that the funds could be rolled
over to future years. He pointed out the close to $40
million in anticipated funds for FY 21, which were broken
down into amounts for discretionary funds and entitlements.
He noted that the FAA authorization bill, typically passed
on a three-year or five-year basis, covered most of the
ACIP, but Congress would typically insert aviation funds
into other bills, which was called supplemental funding.
2:33:08 PM
Representative LeBon asked about the formula for dividing
money between the Fairbanks International Airport and the
Anchorage International Airport. He considered the FY 20
amounts and acknowledged that Anchorage had greater numbers
and more activity, but observed that in FY 21 the spread
between the airports was huge. He asked if Fairbanks had
been overlooked. He did not think it made sense. He did not
see any supplemental funds for the Fairbanks airport.
Mr. Binder clarified that the funds went to the owner and
operator of the airports, and both Anchorage and Fairbanks
international airports were owned by an international
airport system. The funds went as a whole to the system, to
be allocated each year based on capital needs. He noted
that Fairbanks had a large runway rehabilitation project
that had recently started, which was reflected by the
larger chunk from FY 20. The capital needs on both airports
were funded in large part by ACIP dollars, and the rest was
funded by the carriers operating in each airport.
Mr. Binder advanced to slide 13 and reviewed the rural
system capital funding FFY 2016 through FFY 2020. He
commented that FY 20 funds were significantly higher as
unused international funds had rolled over to the rural
system. In addition, there were approximately 7 local
airports in the state that also had a very low capital
year. Typically, rural airports had a 6.25 percent match
for federal dollars. Due to Coronavirus Aid, Relief, and
Economic Security (CARES) Act and American Rescue Plan Act
(ARPA) funding for FY 20, there was no required state match
for federal funds.
Co-Chair Merrick asked if Mr. Binder had defined what a
rural airport was.
Mr. Binder answered that he had not, and stated the term
was used freely. He explained that DOT considered the
Anchorage and Fairbanks were part of the international
system, and the rural airports were everything else. The
international system was the owner of the two airports, and
DOT owned the rest.
Representative Wool asked if the other municipally owned
airports such as Palmer, Wasilla, and Juneau were in a
category or if the airports were in their own group.
Mr. Binder answered that most locally sponsored airports
compared to rural airports, except Juneau which was close
to the size of the Fairbanks airport. He explained that for
specific capital projects, the municipally owned airports
worked directly with the FAA. He noted that DOT included
the airports in its planning.
2:38:23 PM
Mr. Binder moved to slide 14, "Major Rural System AIP
Construction Projects Expected to be Funded in FFY 2021 &
2022," which gave an example of some of the project
construction for the current and following year. He noted
that typically FAA dollars were not freed up until late
spring or summer which meant most projects went to
construction the year following the grant. The FAA broke
down projects into four main categories: safety, payment
rehab, rural access, and buildings. He offered to follow up
after the meeting with greater detail.
Vice-Chair Ortiz asked where the Ketchikan airport fell
into the category in relationship to other airports. He
thought the airport was managed by the borough but owned by
the state.
Mr. Binder answered that the Ketchikan airport was
considered one of the rural airports and was owned by the
state with an operating agreement in place with the
borough. All the revenue generated covered the cost of
operations, which usually ended up a little short. A small
part of the south coast region's budget was allocated to
Ketchikan. He thought that since the FAA broke out the
CRRSA and ARPA funds specific to airports, Ketchikan was
receiving the full allocation of federal funding through
DOT.
2:41:18 PM
Mr. Carpenter addressed federal program project allocations
on slide 15. He noted that the two largest projects were
appropriation with no allocations for the surface
transportation program and the ACIP covering all the FAA
funding. Prior to FY 18, the two major federal programs
were broken out into individual project allocations in the
capital budget. He addressed the pros and cons of the
method. The pros included that the method had provided the
legislature with additional clarity and allowed for the
Legislative Finance Division House district reporting to
give an understanding of the geographic balance and
significance of statewide projects. The cons included the
challenge to manage the individual allocations because of
project cost increases and slippage.
Representative Wool surmised that prior to FY 18 every
project would be listed in an appropriations bill. He saw
how the practice could be very political and asked if that
had been a challenge for the department.
Mr. Carpenter emphasized that the STIP process guided where
the funding went, so for the purpose of the legislature,
the individual project allocations were simply a guide as
to where the funds went. Other than the public process,
there was not really an opportunity to change items.
Representative Wool was not sure the process was a bad
thing.
Mr. Carpenter addressed slide 16 titled "Potential
Solution":
Working with the other body to address the two primary
challenges of:
?Project Cost Increases
?Project Slippage
Solution -Create Additional Allocations:
?Project Contingency
?Project Acceleration
Mr. Carpenter read slide 17, "New Allocations":
Project Contingency Allocation:
?Provides a federal authority "pot" when projects
incur cost over-runs.
Project Acceleration Allocation:
?Provides a federal authority "pot" for when
projects are delayed
?Allows for the advancement of a project in
the STIP that is ready that may not be
listed in the appropriation bill
HB 70 was HEARD and HELD in committee for further
consideration.
2:46:27 PM
AT EASE
2:57:03 PM
RECONVENED
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 70 HFIN DOT CAPITAL - 05.05.2021.pdf |
HFIN 5/5/2021 1:30:00 PM |
HB 70 |
| HB 55 Amendments 1-2 041121.pdf |
HFIN 5/5/2021 1:30:00 PM |
HB 55 |