Legislature(2001 - 2002)
02/20/2001 01:34 PM Senate TRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
Number 581
SB 59-FEDERAL FUNDS TO MUNICIPALITIES FOR ROADS
MS. MARY JACKSON, staff to Senator John Torgerson, said the
Transportation Equity Act for the 21st Century (TEA-21) is the
federal program that provides transportation funds to states.
Alaska receives a great deal of this money and has never given any
of it as a direct pass-through to municipalities. SB 59 would
directly award municipalities, with $20 million being the initial
amount.
MS. JACKSON said SB 59 establishes a new Municipal Road Project
Program (MRPP). The bill authorizes the Department of
Transportation and Public Facilities (DOTPF) to develop a project
application for municipalities. Municipalities would be required
to come up with a match for the federal funds. DOTPF is to develop
priorities on how the funds would be dispersed, with the exception
that a higher priority would be assigned if a municipality comes
forward with an application to take over the maintenance of a state
road, reducing maintenance costs for the state.
MS. JACKSON noted that boroughs and municipalities have many roads
under their jurisdiction, and SB 59 proposes that federal funds be
provided to the municipalities. Ms. Jackson commented that DOTPF
is concerned that municipalities would not be able to administer
the program appropriately.
CHAIRMAN COWDERY asked what the administration fees might be.
Number 767
MS. JACKSON replied DOTPF would take a percentage for
administration costs but she does not know the amount.
SENATOR WILKEN asked if money from the federal government comes
tagged for certain communities.
MS. JACKSON said DOTPF would have to amend the Statewide
Transportation Improvement Program (STIP) and put into it the $20
million that would go to the local municipalities. Municipalities
would know the money is there and apply for it. If municipalities
are able to match the funds and comply with the federal reporting
requirements, they will receive the funds.
SENATOR WILKEN asked who will decide where the money goes.
MS. JACKSON said DOTPF would establish a process for
prioritization. If a municipality is willing to take over a state
road and maintain it, that municipality would have top priority.
Number 949
SENATOR ELTON asked where the $20 million comes from.
MS. JACKSON replied that the money comes from the TEA-21 program.
SENATOR ELTON asked if the money comes from a component of TEA-21,
such as community transportation, or would it be up to DOTPF to
make that determination.
MS. JACKSON said it would come from DOTPF.
SENATOR ELTON asked who would have liability - the state or the
municipality.
MS. JACKSON said the local municipality would but this has not been
tested. The local government would have to ascribe to the
regulations DOTPF develops. The caveat is that if DOTPF develops
regulations saying it would do the paperwork and certification,
then it would be responsible.
SENATOR ELTON gave an example of a Community Transportation Program
(CTP) and wondered why this project, in the STIP, would be
different from a TEA-21 project.
MS. JACKSON said a TEA-21 project gives funds to municipalities for
building roads. CTP projects are rated and DOTPF would build the
road.
SENATOR ELTON asked if the priorities created in SB 59 would affect
the existing STIP.
MS. JACKSON said she did not think it would affect the STIP because
the STIP is not in statute. The STIP is an internal mechanism that
DOTPF uses to rate communities depending on whether or not a
community would take over maintenance of a road. SB 59 just puts
in a new program for municipalities.
Number 1140
SENATOR TAYLOR said he would like to give municipalities control
over the money they receive.
Number 1240
MS. JACKSON said writing this type of priority into statute is
difficult - regulations will administer the program.
SENATOR TAYLOR asked if it would be possible, within the federal
funding mechanism, to establish an entity other than DOTPF to
prioritize projects.
MS. JACKSON said her sense is there is a lot of discretion with the
funds.
SENATOR TAYLOR said it is important to him that the communities
themselves build the projects.
Number 1337
MR. THOMAS BRIGHAM, Director for the Division of Statewide
Planning, DOTPF, said DOTPF's concern with SB 59 is of a practical
nature based on its experience with locally administered federal
projects.
MR. BRIGHAM addressed earlier concerns that DOTPF is only funding
state or federal projects. According to Mr. Brigham, this is not
the case. In 1999 the department funded $49.5 million on roads
owned by local governments. DOTPF also funded $45 million in the
year 2000 and about the same amount for 2001. DOTPF also has an
Improve and Transfer Program whereby if local governments are
willing to take over a local road owned by the state, that road is
then owned and operated by the local government. This program
averages $2.5 to $4.0 million per year.
MR. BRIGHAM said DOTPF is working on regulations for STIP. The
final draft should be available in early March.
MR. BRIGHAM noted in the past DOTPF has passed-through federal
funds to boroughs and cities giving them the responsibility to do
the project. DOTPF does not have a philosophical problem with
local governments doing their own projects, but DOTPF's experience
is that the strings attached to the federal funds cause problems
for local governments. A Code of Federal Regulations, which
governs how highway projects are to be done, comes with the federal
money - it is complicated and hard to administer. Because of this,
most local governments, especially the small ones, will have a hard
time administering federal projects. Overhead would also be
substantially greater because there would be overhead for both
local and state government. Even the projects earmarked by the
federal government have to go through DOTPF.
Number 1776
CHAIRMAN COWDERY asked how DOTPF determines the administrative
charges.
MR. BRIGHAM replied that direct, onsite administration is called
construction engineering and is capped at 15 percent. As a
percentage of the project, big jobs are less and small jobs are
more.
Number 1810
SENATOR WARD asked if DOTPF took a percentage of the pass-through
money for the port project in Wasilla.
MR. BRIGHAM said he did not know but he assumed DOTPF had because
one of its employees works full time on the project.
SENATOR WARD asked if the percentage is taken at the beginning of a
project and if it is always 15 percent.
MR. BRIGHAM said if it is a local project, DOTPF does not charge 15
percent. If it is DOTPF's project, 15 percent is the limit for
construction engineering.
MR. POSHARD said what is possibly being referred to is the Indirect
Cost Allocation Program (ICAP). ICAP is an arrangement with the
Federal Highway Administration (FHA). There is a two percent cost
on every project that DOTPF takes for ICAP, rather than charging
for specific projects. The two percent pays for DOTPF's
participation and administration of a project. Even though local
governments do the actual work, DOTPF does all of the paperwork,
reimbursements, and things of this nature.
MR. POSHARD said he would provide the committee with a memorandum
from the FHA, which outlines the ICAP program.
Number 1953
SENATOR ELTON said that under the program envisioned by SB 59,
several things happen: 1) municipalities will have to assume
liability either for project failure or regulation violation; 2)
municipalities will have to pay a match; 3) in some cases,
municipalities would have to take over maintenance; and 4)
municipalities would have to deal with the Code of Regulations.
Given this, Senator Elton asked if DOTPF anticipated municipalities
taking advantage of this type of program.
MR. BRIGHAM said there might be a rush in the beginning, but then
it would be a case of "once bitten, twice shy." Dealing with the
Code of Federal Regulations has not been a pleasant experience for
local governments. A state grant is a much different process and
much less burdensome, which local governments can handle without
much trouble.
MR. POSHARD added that it is difficult to determine what
difficulties municipalities would be willing to take on.
Municipalities that already have projects in the CTP, in this or
the next fiscal year, would likely not take advantage of the
program because their project is already scheduled for funding.
Municipalities that have projects further down the list might want
to participate, trying to move their project up. In addition,
there are only a handful of municipalities that have the financial
ability to match federal funds.
SENATOR ELTON asked if the $20 million would be coming from the
Community Transportation Program (CTP).
Number 2070
MR. BRIGHAM replied yes, this type of project is in community
transportation or Trails and Recreational Access for Alaskans
(TRAAK) program.
SENATOR ELTON asked how large the CTP program is now.
MR. BRIGHAM said it is about $120 million.
SENATOR ELTON asked what SB 59 does that DOTPF does not now have
the capability of doing, or is it just the magnitude of money.
MR. POSHARD said that now under the CTP program, if a municipality
puts up a local match, additional points are added for a project in
the scoring and ranking system, allowing the project to move up
higher in the funding process. SB 59 requires a local match to
participate.
SENATOR ELTON said SB 59 creates a program that only a few
municipalities could take advantage of, allowing them to move up
the STIP, causing other municipalities to drop down in the STIP.
MR. BRIGHAM said this is accurate. SB 59 also takes a piece of the
community transportation program and says a certain amount of money
has to go to local government for administration of their own
project.
SENATOR ELTON said before moving SB 59 he would like to know if
Juneau has the ability to move up the STIP process thereby forcing
other communities down. He sees this as a real problem - giving
large communities the ability to push smaller communities down.
Number 2182
SENATOR WARD asked if DOTPF's new regulations would accomplish what
the sponsor of SB 59 is trying to accomplish.
MR. BRIGHAM said the new regulations would not accomplish the same
thing. The regulations would take the existing system and put it
into regulation. This is something a number of legislators have
wanted.
SENATOR WARD said the sponsor is also concerned with how
municipalities would get on the list and stay on without being
passed over.
MR. BRIGHAM said projects that score with middle or low scores do
not move up very fast or they stay where they are. Higher scoring
projects are built. New projects that score well go in line ahead
of other projects.
SENATOR WARD asked if there had ever been a discussion about
creating a road commission that would be independent of DOTPF.
MR. BRIGHAM said a bill was introduced three or four years ago but
it did not move forward because it created more problems than it
would have solved.
Number 2289
MR. POSHARD said there are states that use commissions to run their
programs and this works fine. A commissioner, director, or CEO
runs other state programs and this also works well.
Number 2340
SENATOR TAYLOR asked if DOTPF had a position on SB 59.
MR. BRIGHAM said DOTPF is concerned about how it would function.
SENATOR TAYLOR asked who does the ranking in the STIP process.
MR. BRIGHAM replied there are three regional directors - Southeast,
Southcentral and Northern, Mr. Boyd Brownfield, Deputy
Commissioner, DOTPF, Mr. Brigham, Director, Division of Statewide
Planning, DOTPF and Mr. Michael Downing, Director, Division of
Statewide Design and Engineering Services, DOTPF.
SIDE B
SENATOR TAYLOR asked what is done with excess funds and who makes
the decision where a project is placed on the STIP.
Number 2288
MR. BRIGHAM noted the gross amount of money, over the course of a
year that is created by projects coming in under bid is
"deobligated" from one project to another. The number is exceeded
by the total amount of projects that come in over-bid and projects
whose estimates change in the STIP. Mr. Brigham said DOTPF's
"overages consistently exceed our underages."
MR. POSHARD said DOTPF has a problem with underestimations, not
over-estimations. When bids come in higher than projects were
estimated DOTPF has to ask for additional legislative authority, or
the project has to be put further down the STIP. DOTPF cannot
spend money on anything it does not have legislative authority on.
Number 2090
SENATOR ELTON asked if DOTPF had a fiscal note for SB 59.
MR. POSHARD noted that DOTPF is in the process of developing a
fiscal note.
SENATOR WILKEN referred back to a statement that Mr. Poshard made
in reference to SB 79 concerning cuts in DOTPF's maintenance budget
over the last seven years. He referred to a chart that showed
DOTPF's maintenance budget had not been cut as much as Mr. Poshard
had indicated. He asked Mr. Poshard to look at that and get back
to the committee on the discrepancy.
SENATOR WARD said he does not believe that "maintenance hasn't been
cut to the bone, it's not being done properly."
SENATOR TAYLOR asked what the design problem was on the Third
Avenue bypass in Ketchikan.
MR. BRIGHAN said a portion of the Third Avenue route was in very
steep terrain. This area was intended to be bulwarked with an
earth retaining wall but it was determined that this would not be
successful, from an engineering standpoint, and that a bridge was
needed.
Number 1877
SENATOR WARD said it was amazing that a designer would be
instructed to design a structure for an airport in Alaska without
taking into consideration that there might be an earthquake
someday.
MR. BRIGHAM said the bypass retaining wall design was a
professional embarrassment but in the case of the airport, the
contract engineer did take into account seismic concerns. The
issue was simply an argument between the municipalities as to
whether the extent to which those concerns were taken into account
was adequate.
Number 1815
SENATOR WARD said the municipality felt the state was incompetent.
He asked Mr. Brigham to speak with the municipality on this issue
and get back to the committee.
CHAIRMAN COWDERY said it was his understanding the municipality
felt it was getting closer to a solution.
MR. POSHARD agreed.
CHAIRMAN COWDERY said SB 59 would be held in committee until a
fiscal note was furnished.
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