Legislature(2001 - 2002)

03/19/2001 01:30 PM Senate CRA

Audio Topic
* first hearing in first committee of referral
+ 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                                                            
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                                                            
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                                                            
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                                                            
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                                                            
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                                                            
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                                                            
SENATOR PHILLIPS moved  CSSB 59 (STA) and fiscal note from committee                                                            
with individual recommendations. There were no objections.                                                                      

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