Legislature(2001 - 2002)
03/19/2001 01:30 PM Senate CRA
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 59-FEDERAL FUNDS TO MUNICIPALITIES FOR ROADS
MARY JACKSON, staff to Chairman Torgerson, introduced the bill for
Chairman Torgerson, the prime sponsor.
MS. JACKSON told members that SB 59 establishes a new Municipal
Road Projects Program (MRPP) that directly awards up to $20 million
in federal funds to municipalities for re-construction or
construction projects that are eligible for federal funding.
The Department of Transportation and Public Facilities is
responsible for developing a project application that sets out all
information that will be requested by the department. The
municipality is required to provide the federal match and the
project must qualify for federal funding. The municipality must
comply with all federal requirements for receipt and expenditures
of the funds.
Municipal road projects are prioritized and higher priority is
given to reconstruction projects where the municipality agrees to
accept maintenance responsibility once the project is completed.
The state's road maintenance costs will decrease when roads are
transferred to a municipality.
SENATOR PHILLIPS asked whether Anchorage supports the legislation.
MS. JACKSON said there isn't anything official from the
Municipality of Anchorage.
SENATOR AUSTERMAN asked if the $20 million is per municipality or
total.
MS. JACKSON said it was the total amount awarded statewide.
SENATOR AUSTERMAN thought it should be clarified because the
language leaves a question in his mind.
CHAIRMAN TORGERSON pointed out that ranking or prioritization is
addressed on page 2.
TOM BRIGHAM, Director of Statewide Planning for the Department of
Transportation and Public Facilities, responded to Senator
Austerman's question by saying the department interprets the
language to mean there is $20 million allocated statewide. That
could be one large project or several smaller ones.
CHAIRMAN TORGERSON pointed out that adding the word "statewide"
wouldn't preclude all the money going to one district.
SENATOR PHILLIPS asked how the priorities would be set to determine
where the $20 million goes.
MR. BRIGHAM replied that this would constitute a piece of the
community transportation program.
SENATOR PHILLIPS asked if it would be like Alaska Metropolitan Area
Transportation Plans (AMATS).
MR. BRIGHAM said not exactly, this would be a piece of the program
that goes to fund local community projects. They would develop
selection criteria to prioritize community projects where
communities would take ownership after the project is finished.
SENATOR PHILLIPS asked what would happen if the project cost was
$20 million.
MR. BRIGHAM said there are a number of prioritization factors such
as health and safety and quality of life. If the intent of the
sponsor and legislature was to spread the amount over a number of
small projects then the department would develop criteria to give
points to small projects.
CHAIRMAN TORGERSON said that although the probability is low, all
the money could go to one project so perhaps it would be beneficial
to put a cap on any one project.
SENATOR AUSTERMAN was interested in assuring that all the money
would not go to just one project as it did with the Whittier
Tunnel.
CHAIRMAN TORGERSON suggested inserting "statewide" on page 1, line
8 after the word "awarded" as amendment #1.
SENATOR AUSTERMAN moved amendment #1.
SENATOR KELLY objected for the purpose of discussion asking whether
they'd limited it enough.
CHAIRMAN TORGERSON said he wasn't sure they had.
SENATOR KELLY said there could still be three large projects. He
then removed his objection.
CHAIRMAN TORGERSON agreed.
SENATOR LINCOLN thought it was still confusing. She asked whether
this meant that we couldn't accept any more that $20 million from
the federal government.
CHAIRMAN TORGERSON said that of the total given by the federal
government, $20 million would be earmarked for these projects.
SENATOR LINCOLN asked why the limit was $20 million.
CHAIRMAN TORGERSON said he'd be happy with a larger number but
wasn't sure "how you'd get from here to there."
SENATOR LINCOLN pointed out that on page 2, line 2 it says the
municipality must agree to match federal funds if required by
federal law.
CHAIRMAN TORGERSON said this isn't a give away program. He asked
Mr. Brigham if there is an average cost range for community
transportation programs (CTP).
MR. BRIGHAM estimated they run between two and three million
dollars.
CHAIRMAN TORGERSON asked whether a $3 million cap should be placed
on individual projects.
MR. BRIGHAM responded that it would depend on the objectives but
that a three-mill cap on individual projects would spread the money
around. With the match requirement and the fact that large projects
require more complex engineering, larger communities will be the
first to apply for these projects because they have the money and
the capability. Anchorage could easily use the entire $20 million
in one year. If the intent is to make the funds available to a
number of communities across the state then a cap is reasonable. A
cap of three to four million dollars would catch about 75 percent
of the projects in the state.
SENATOR PHILLIPS suggested inserting "The maximum amount for any
single municipality shall not exceed $3 million." on page 1, line
8, after "$20,000,000." as amendment #2.
CHAIRMAN TORGERSON said amendment #2 would be held until committee
members had a written copy to examine.
MR. BRIGHAM wanted to say that the following concerns aren't
philosophical; they have had a number of prior conversations with
the Chairman and other Senators around the basic concept. They have
no problem with local governments taking additional responsibility
for the design and delivery of local projects. They currently have
a number of small local projects and they have been prioritizing
spending federal funds on local streets.
He explained there's a great deal of difference between the
administration of a federal and a state project. A local community
can take state money and design and implement their project in the
best way they are able. DOT oversight on this type of project is
virtually nonexistent. Federal projects differ greatly. First, the
Code of Federal Regulations must be followed on any federal
project. Although small communities are frequently able to design
and implement their projects, adhering to the federal environmental
and right of way requirements is more that many small communities
can do. DOT consequently spends much time helping these communities
understand and comply with the regulations. Therefore there is
project management time spent at both the local and the state
level. The state is ultimately held responsible for community
compliance with the federal regulations.
Number 548
CHAIRMAN TORGERSON said they'd had this discussion before and he's
waiting for the department to bring him written suggestions to
draft an amendment.
SENATOR LINCOLN asked why the oversight expenses aren't included as
part of the fiscal note.
MR. BRIGHAM said it's impossible to quantify exactly because it's
not an out of pocket cost. It's using more money for administration
and less for construction.
SENATOR LINCOLN said it is difficult if a figure for additional
project management isn't quantified. She suggested following up on
Chairman Torgerson's request for language for an amendment.
MR. BRIGHAM said that if $15-20 million in funding is moved from
state administration to locally administrated projects, then that
reduces some of the state administrative burden. However, there is
still a great deal of state responsibility and therefore additional
cost for those projects that get into trouble and need state
administered oversight. The savings probably cancels the additional
cost.
SENATOR AUSTERMAN observed that it would be difficult to determine
administrative costs because the size of the community receiving
the project monies might influence whether there is additional
administrative cost or not. Larger communities have more personnel
and resources and would be less likely to need more state
oversight.
MR. BRIGHAM said that under perfect conditions, one project manager
could easily handle a years worth of projects but when project
problems occur effort multiplies.
SENATOR LINCOLN asked what impacts, if any, this bill would have on
small communities.
MR. BRIGHAM said that medium to large communities generally have
the capability to manage federal projects so it would be more
difficult for small communities to compete.
SENATOR TORGERSON said this is so unless they hire an engineering
firm like the large communities do. He asked whether Anchorage has
experts on the payroll that can do large federal highway projects.
MR. BRIGHAM said he believes they're able to do that in house.
CHAIRMAN TORGERSON pointed out that small communities do lots of
projects with federal money without in house expertise. In fact
they're not expected to have the expertise, they hire an
engineering firm for that.
MR. BRIGHAM agreed.
SENATOR AUSTERMAN asked if DOT envisions the funds going through
the borough or directly to the community.
MR. BRIGHAM said the money certainly could go through the borough.
They usually have the road powers and would be the recipient and
responsible party. This makes particular sense for small
communities and villages.
CHAIRMAN TORGERSON asked if there were any objections to amendment
#1. (Inserting "statewide" on page 1, line 8 after the word
"awarded")
SENATOR KELLY removed his objection. There were no other objections
to amendment #1.
SENATOR PHILLIPS moved amendment #2. There were no objections.
SENATOR AUSTERMAN asked whether the Chair knew that municipalities
paid up front then received federal reimbursement.
CHAIRMAN TORGERSON said he did know that was the process. Payments
are incremental on larger projects but he wasn't sure about small
projects.
SENATOR PHILLIPS moved CSSB 59 (STA) and fiscal note from committee
with individual recommendations. There were no objections.
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