Legislature(2001 - 2002)
03/27/2001 06:05 PM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SENATE BILL NO. 59(CRA)
"An Act relating to awards of federal funds to municipalities
for road projects; and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
SENATOR JOHN TORGERSON noted that the subject of this legislation
has been considered for several years. He explained this bill
directs the Department of Transportation and Public Facilities to
make $20 million in federal funds available to municipalities that
have "road powers" to address municipal road needs. He pointed out
that the Senate Community and Regional Affairs committee substitute
places a $3 million limit as the maximum amount that could be
allocated to any single municipality in a fiscal year. He stated
that this is intended to prevent allocation of all the funds to
only one community. He noted that the municipalities would provide
matching funds, thus explaining the negative $1.5 million fiscal
note reflecting the amount of state funds required under the
existing procedure. He added that this legislation also stipulates
a priority for any state-owned roads being considered for a
transfer to local ownership.
Senator Hoffman relayed that he was informed of the existing option
for municipalities to receive this funding through a Memorandum of
Agreement (MOA) through the Department of Transportation and Public
Facilities. He asked why this legislation is therefore necessary.
Senator Torgerson replied that it is true that some projects were
undertaken under the MOA program, but that they are done on a case-
by-case basis, and not an annual appropriation. He stressed that
the intent of this legislation is to make funds available each year
to allow municipalities to plan projects.
Senator Hoffman also understood that the Department of
Transportation and Public Facilities presently spends approximately
$40 million on locally owned roads.
Senator Torgerson responded, "I would be real surprised at that."
[Note: teleconference sound quality is poor.]
TOM BRIGHMAN, Director, Division of Statewide Planning, Department
of Transportation and Public Facilities, testified off net via
teleconference from Anchorage that the differences between the
department and the legislature are not philosophical but rather
practical. He shared that the department funds local projects in
two different ways. He stated that the department has made a number
of agreements with municipal governments over time, to allow the
local governments to manage their own projects using federal funds.
He pointed out that the department also manages and executes
federal funded projects that improve local roads in addition to
state-owned roads. He affirmed Senator Hoffman's statement that the
department expends $40 million to $50 million annually on these
kinds of projects.
Mr. Brigham asserted that the federal funds utilized for these
projects are not grants. He pointed out that although the state may
allocate funds to municipalities, the federal government still
holds the department responsible for the project, and therefore,
the department is still involved.
Mr. Brigham next stressed that the department does not "get money
from the federal government that we then put in the bank and spend
on other projects." He clarified that the state, or the local
government must first provide the required matching funds, less a
machinery reimbursement, for a specific project according to
federal regulations.
Mr. Brigham noted there are a number of aspects to projects, such
as environmental and right-of-way issues that are "fairly complex,"
which local governments and many consulting engineers are not
equipped to address. He stated that oversight or errors made in
these matters have the effect of adding to the overhead costs of a
project.
Senator Hoffman asked the witness if local municipalities are
required to provide the matching funds up front before a project
could begin, why the department opposes this legislation.
Mr. Brigham responded that if the process worked perfectly, there
would be no objection. However, he stressed that there are few
local governments equipped to address all the federal requirements
and the department is still forced to be involved in project
management. He reiterated the increased overhead expenses.
Senator Leman requested an explanation of language on page 1, line
9 of the committee substitute, "The maximum amount awarded to a
single municipality may not exceed $3,000,000." and asked the
reason for this provision.
Senator Torgerson relayed that the concern was that one
municipality could have a project with a high cost, which could
prevent other municipalities from participation in the program.
Senator Leman asked why the maximum level is set so low and wanted
to know if the amount could be higher for larger municipalities.
Senator Torgerson answered that the intent is for more than one
municipality to be able to partake in using the funds. He surmised
that a larger municipality with a larger project could phase in the
project.
Amendment #1: This conceptual amendment increases the maximum
amount awarded to a single municipality from $3 million to $10
million.
Co-Chair Donley moved for adoption and stressed that he could not
support this legislation with such a low cap. He remarked he wanted
the allocations to reflect per capita and "volume of use"
considerations "more accurately."
Senator Torgerson countered that one project should not receive all
the funds. He suggested that the large project in question might
not be in Anchorage but perhaps the Ketchikan bridge project at
$120 million. He stated that the intention is to distribute the
funds across the state.
Senator Green objected to the amendment saying she agreed with the
sponsor. She then asked if the legislation places any restrictions
on the type of road projects, such as new roads, maintenance or re-
construction on an existing road.
Senator Torgerson responded that maintenance would not qualify. He
stated that any project that qualifies for federal funding, which
he described as projects that increase the life of an existing
road, would be allowable under this program.
Senator Green pointed out that some roads are heavily used by
drivers who do not reside in the municipality where the road is
located. She also spoke to the major effort for smaller communities
to undertake some projects.
A roll call was taken on the motion.
IN FAVOR: Senator Leman and Co-Chair Donley
OPPOSED: Senator Wilken, Senator Austerman, Senator Green, Senator
Hoffman, Senator Olson and Co-Chair Kelly
ABSENT: Senator Ward
The motion FAILED (2-6-1)
The amendment FAILED to be adopted.
Senator Green offered a motion to move from Committee, CS SB 59
(CRA), with accompanying Department of Transportation and Public
Facilities zero fiscal note.
Co-Chair Donley objected stating that he wanted additional time to
work with the sponsor on addressing his concerns with the
legislation.
Senator Green WITHDREW her motion to move the bill from Committee.
Co-Chair Kelly ordered the bill HELD in Committee.
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