Legislature(2003 - 2004)
05/05/2003 09:02 AM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATE BILL NO. 100 "An Act making capital appropriations and reappropriations; capitalizing a fund; making appropriations under art. IX, sec. 17(c), Constitution of the State of Alaska, from the constitutional budget reserve fund; and providing for an effective date." This was the twelfth hearing for this bill in the Senate Finance Committee. Amendment #8: This amendment is outlined in a memorandum from Mike Barton, Commissioner, Department of Transportation and Public Facilities to Cheryl Frasca, Director, Office of Management and Budget dated May 2, 2003, which reads as follows. The Department of Transportation and Public Facilities is requesting amendments to the capital budget bills (HB 150 and SB 100) before the Legislature. Rural Airport Projects The Department is requesting the following changes to rural airport capital projects: Amend Chevak: Snow Removal Equipment Building Increase from $50,000 to $200,000 federal receipt authority. The cost to build this structure has increased over previous estimates. This amount is needed in addition to an FY 03 appropriation to bring the total estimated cost to $750,000. Add Scammon Bay: Airport Snow Removal Equipment Building $100,000 federal receipts. Reflects revised Airport Improvement Program request. This project will upgrade the Scammon Bay Snow Removal Equipment Building. Statewide: Various Airport Snow Removal Equipment $4,300,000 federal receipts. This was inadvertently omitted from the Department's original request. The project provides federal authority to purchase new or replacement snow removal equipment at several rural airports. Surface Transportation Projects The Department's current AMATS [Anchorage Metropolitan Area Transportation Study] and Surface Transportation requests are $68,734,000 and $416,092,600. The following reductions are being requested to various highway projects: ($39,906,000) - Over the past year there has been a decrease in the amount of federal fuel tax revenues collected, which have caused a corresponding reduction in the highway construction program. A reduction in specific projects is being requested to reflect delays due to the decreased federal funding. ($48,125,000) - This amendment requests project reductions where the Department has determined that adequate project authority already exists to continue work through FY 04. ($1,205,000) - Also being requested is a reduction in TRAAK [Trails and Recreation Access for Alaska] projects to reflect a program allocation decrease. The following additions are being requested: $55,416,000 - New or increased federal project authority is being requested where scope changes, funding breakdown, updated estimates or priorities have changed. $21,700,000 - Project authority is needed for earmarks contained within the recently approved congressional appropriation bill. Finally, the amendment contains the elimination of individual pavement and bridge projects and combines them into regionwide allocations. This will provide the regions flexibility in determining their greater need, pavement or bridge repair. Similar adjustments are taking place for AMATS and FMATS [Fairbanks Metropolitan Area Transportation Study] projects. The net effect of these amendments is a reduction of $12,220,000 to the AMATS and Surface Transportation appropriation requests. A spreadsheet with the changes is attached [copy on file]. This amendment was initially discussed at the May 2, 2003 hearing on this bill. Co-Chair Wilken informed that the projects identified in Amendment #8 are included in the updated Department of Transportation and Public Facilities spreadsheet [copy on file], dated May 2, 2003. Senator B. Stevens stated that lines 78 through 80 of the new spreadsheet specify that the total pavement and bridge refurbishment expense would be $46 million. He noted that the components comprising this amount are: lines ten through twelve that total $14 million; lines 36 and 37 that total approximately $10.5 million; and lines 48 and 49 that total $6.1 million. However, he pointed out that the $6.1 million total of lines 48 and 49 is included in each of the two aforementioned totals. Therefore, he argued that the total of these three items should be $30.6 million rather than the $46 million reflected on the spreadsheet. He puzzled as to how the total was calculated. JEFF OTTESEN, Acting Director, Division of Statewide Planning, Department of Transportation and Public Facilities shared that one of the major difficulties the Department has experienced in preparing its capital budget request is that the Department has had "to guess what the new formula will be in the reauthorization of the [federal] transportation bill," as he explained, the federal formula might not be finalized until the spring of 2004. He expressed that this lack of finality has resulted in "much uncertainty" in the budget. He reminded that numerous FY 03 preventative maintenance activities were eliminated because of a decrease in federal funds "late in the year." Continuing, he voiced the Department's desire to provide the various regions of the State with the flexibility to use any excess federal aid the Department might receive, to "catch up" on preventive maintenance activities and other necessary projects. Senator B. Stevens noted that the budget for the Central region has increased from $14 million to $20 million and that the Northern region's budget has increased from $10 million to $20 million. In addition, he reiterated that the newly created Southeast region's $6 million proposed budget, as specified on lines 48 and 49, is incorporated into the total budget three times. He continued to voice confusion regarding how the budget was calculated. Co-Chair Wilken asked the Department to provide the Committee with a summary sheet to further define the total expense. Mr. Ottesen clarified that rather than attempting "to be the exact sum of the old lines," the revised lines in the spreadsheet are intended to include the old lines "plus the extra authority" that might be forthcoming from the federal government. Co-Chair Wilken understood that the federal funding in question is specific to the Anchorage Metropolitan Area Transportation Study (AMATS) and the Fairbanks Metropolitan Area Transportation Study (FMATS). Mr. Ottesen clarified that the federal funding would have a region- wide effect. Co-chair Wilken asked the Department to provide a revised spreadsheet to clarify the funding. Senator B. Stevens noted that, were Amendment #8 adopted, FMATS projects would be reduced approximately $545,000 and AMATS projects would be reduced $12.3 million for an AMATS total of $54.2 million as compared to its original budget proposal of $66.5 million. Senator B. Stevens additionally asked for an explanation of the new Metropolitan Planning Organization (MPO) item on line 74 as well as a clarification as to whether Anchorage's University and Illinois Avenues, as identified on line 21 in the new spreadsheet, are considered part of the MPO road system or are classified as State- owned roads. Mr. Ottesen explained that University and Illinois Avenues are considered State-owned roads. Senator B. Stevens opined, therefore, that they are included in the National Highway System (NHS). Mr. Ottesen replied no. He explained that although these are State roads, their location within a MPO mandates that their funding be included in the MPO budget. He noted that roads designated as National Highway System routes would be the exception to this determination. Senator B. Stevens declared that his AMATS and FMATS budget reduction calculations and percentages differ from the Department's, and he remarked that his primary concern is the $12.3 million reduction in AMATS funding. He communicated that the proposed FMATS and AMATS $12.7 million total budget reduction equates to 16.1 percent of the total budget reduction. He asked the Department to identify similar levels of reductions in other areas in the State, as he asserted that rather than AMATS carrying the brunt of total budget reduction, the entirety of the components should reflect a 16-percent Community Transportation Program (CTP) reduction Co-Chair Wilken asked the Department to provide a reconciliation of the numbers. Mr. Ottesen affirmed that further information would be provided. Mr. Ottesen reviewed the Department's funding approach by explaining that in November 2002, the Department projected a total funding level of $205 million for CTP and Trail and Recreation Access in Alaska (TRAAK). He communicated that these two categories fund MPO allocations. Continuing, he noted that current non-MPO funding is estimated to total "only" $94 million. Therefore, he explained that the revised FY 04 spreadsheet "is an attempt to restart" funding allocations to produce "equality across the board," between the MPOs and the non-MPOs in the State. Mr. Ottesen reminded the Committee that previous "transitional funding" levels authorized for Illinois Avenue and University Drive upgrades were at the 100 percent level; however, due to a downturn in available funding, the transitional funding specified for them in FY 04 is at the 50-percent level. He explained that these transitional funds are in addition to the regular funding mechanism for these avenues, and he noted that this type of extra funding has occurred frequently over time. He expressed that other projects have received additional funding in this manner, and he assured that the extra funding has been provided "judiciously and for good reason." Co-Chair Wilken announced that the Department would continue to work with Senator B. Stevens to address his concerns. Senator Hoffman noted that the revised FY 04 budget totals $350 million as opposed to the original budget of approximately $450 million. He asked the Department to identify which Statewide Transportation Improvement Program (STIP) projects have been eliminated due to the funding reduction. Mr. Ottesen explained that the red line denoted on the budget chart accompanying the revised spreadsheet indicates the original federal funding level that was estimated for FY 03 through FY 06 while the yellow line on the chart reflects the current anticipated federal funding level reduction of approximately $75 million per year. He noted that the federal and State match funding levels are also depicted. Senator Hoffman asked which projects would be affected. Mr. Ottesen stated that the reduction would be all encompassing. Senator Hoffman surmised therefore that the project reductions in their entirety would equate to approximately $75 to $80 million per year. Mr. Ottesen clarified that the net affect would be approximately $160 million, as the downturn in federal funds would affect the current year's funding in addition to the FY 04 funding. He affirmed that the issue is complex because the total includes the new SHAKWAK funding category that is limited in its scope of usage and is excluded from the regular federal funding formula. In response to a question from Senator Hoffman, Mr. Ottesen replied that the Department was unaware of some of the federal FY 03 funding reductions until approximately four weeks prior. He assured that the Department is currently revising both the FY 03 and FY 04 budgets in an attempt to re-schedule and/or delay projects. He communicated that this is the first time in fifteen years that the Department has faced a downturn in federal funding. Senator Taylor questioned the methodology used to determine which projects were selected for funding reductions; specifically whether such things as the elimination of $1.4 million in federal receipts designated for the Saxman ferry terminal occurred because of the Department's knowledge that the delivery of the ferry was being delayed. JOHN MACKINNON, Deputy Commissioner of Highways & Public Facilities, Department of Transportation and Public Facilities, stated that the Department's three regional directors and staff worked to make "cuts proportionately" and to reach agreement on which projects could be delayed "with minimum impact" or with a determination that a project's funding authority would not be included because the project was behind its projected timeline. He clarified that rather than jeopardizing a project, its delay would appropriately reflect the project's current situation. He noted that these projects might be behind schedule due to such things as right-of-way conflicts, utility delays, or construction schedules. Senator Taylor voiced concern regarding two big projects in his district; specifically the $6 million Gravina Island access bridge to the airport project and the $1.9 million Tongass Avenue resurfacing project. Mr. MacKinnon referred the Committee to the spreadsheet as it's comment section specifies that sufficient money would be available in the proposed budget to continue those projects through FY 04. Senator Taylor requested that some assurance be provided to substantiate that the projects would be adequately addressed in the FY 05 budget proposal. Mr. MacKinnon assured that these projects would be furthered, provided that sufficient federal funding becomes available. Senator Taylor asked whether this assurance is based on the historical level or the projected level of federal funding. Mr. MacKinnon clarified that it is based on the anticipated level of federal funding, which, he characterized "as a more realistic level" of what the funding would be. Senator Taylor asked regarding the deletion of the $6.5 million Prince of Wales Coffman Cove Road from the FY 04 budget. He asked for assurance that this project would move forward even though the accompanying comment section specifies that the its funding would not be required until FY 05. Mr. MacKinnon responded that the Coffman Cove project is a federal forest service project that has been bid and is currently being awarded. He assured that the project would be included in the FY 05 budget, as its funding would not be required until August 2004. Senator Taylor declared therefore, that the project would be addressed in the FY 05 budget. Mr. MacKinnon concurred. Senator B. Stevens asked whether the ferry system projects on lines 65 and 67 of the revised budget were included in a recently adopted amendment pertaining to SHAKWAK designated funds of $68 million. Senator Taylor interjected that the funding for these projects is separate from the $68 million SHAKWAK amendment. Mr. MacKinnon concurred. Co-Chair Wilken reiterated that the Department would provide information to the Committee regarding questions that arose during this meeting. Co-Chair Wilken ordered the bill HELD in Committee.