Legislature(2005 - 2006)HOUSE FINANCE 519
01/11/2006 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
January 11, 2006
1:36 P.M.
CALL TO ORDER
Co-Chair Meyer called the House Finance Committee meeting to
order at 1:36:12 PM.
MEMBERS PRESENT
Representative Mike Chenault, Co-Chair
Representative Kevin Meyer, Co-Chair
Representative Bill Stoltze, Vice-Chair
Representative Richard Foster
Representative Mike Hawker
Representative Jim Holm
Representative Reggie Joule
Representative Mike Kelly
Representative Beth Kerttula
Representative Carl Moses
Representative Bruce Weyhrauch
MEMBERS ABSENT
None
ALSO PRESENT
Representative Ethan Berkowitz; Representative Berta
Gardner; Representative Norman Rokeberg; Representative Kurt
Olsen; Representative Jim Elkins; Representative Bill
Thomas; George Wuerch, Chairman, Knik Arm Bridge and Toll
Authority; Malcolm Menzies, Southeast Regional Director,
Department of Transportation and Public Facilities; J.C.
Conley, Former Ketchikan Assembly; Jeff Ottesen, Director,
Division of Program Development; Michael Barton,
Commissioner, Department of Transportation and Public
Facilities; William Green, Project Counsel, Knik Arm Bridge
and Toll Authority, Anchorage; Michael Barton, Commissioner,
Department of Transportation and Public Facilities
PRESENT VIA TELECONFERENCE
Bob Weinstein, Mayor, City of Ketchikan
GENERAL SUBJECT(S):
The following overview was taken in log note format. Tapes
and handouts will be on file with the House Finance
Committee through the 24th Legislative Session, contact 465-
6814. After the 24th Legislative Session they will be
available through the Legislative Library at 465-3808.
^
OVERVIEWS:
KNIK ARM BRIDGE & TOLL AUTHORITY
GRAVINA ISLAND BRIDGE
TIME SPEAKER DISCUSSION
1:36:33 PM Co-Chair Meyer Co-Chair Meyer introduced the new
committee member Representative Beth
Kerttula and convened the House Finance
Committee in order to discuss the Knik
Arm and the Gravina Island Bridge. He
noted that the meeting would provide an
opportunity to the intended financing.
Those two items will be contained
within the Capital Budget.
KNIK ARM BRIDGE & TOLL AUTHORITY
1:38:16 PM GEORGE WUERCH, Introduced his staff, Mr. Green,
CHAIRMAN, KNIK Project Counsel. Mr. Wuerch provided
ARM BRIDGE AND the Committee with handouts from the
TOLL AUTHORITY Knik Arm Bridge annual report from the
project.
1:40:15 PM Mr. Wuerch Referenced Page 5 of the handout, the
satellite view of the map of the
greater Anchorage, Mat-Su, Port
MacKenzie area proposed for the Knik
Arm Crossing. He pointed out the
Anderson dock approach & the area
called the "elephant cage" - for the
highly classified intelligence.
1:41:27 PM Mr. Wuerch Referenced Page 9. He spoke to the
impact of the defense communication
system and the Anchorage International
Airport, the last consideration should
be a high suspension bridge. He
referenced the drawing on Page #9,
which provides a conceptual visual of
the bridge.
1:43:12 PM Mr. Wuerch Referenced Page 10 & 11, which provide
the graphic results of the Federal
Highway Commission's scoping process
that took place last year. He added
that over 20 alternatives had been
considered. The most reasonable
proposals contained two different
approach roads on the Port MacKenzie
side. He stated that either proposal
would work for the Toll Authority.
1:44:33 PM Mr. Wuerch Referenced figure #2, Page 10 - the
Southern alignment bridge, which moves
the bridge structure and minimizes the
'foot print' from military
communication. It does move it closer
to the Port of Anchorage.
1:45:10 PM Mr. Wuerch Referenced figure #3, Page 11 provides
illustration for the Erickson Street
alternative alignment. Phase 1 connects
to the A/C couplet, while Phase 2
connects to the Ingra/Gambell Couplet.
1:46:33 PM Mr. Wuerch Addressed alternative #4, the Degan
Street alternative alignment.
1:46:44 PM Mr. Wuerch Spoke to the financing chart as listed
on Page 13. He pointed out the $94
million dollars proposed by the
Governor for the Capital Budget. He
noted the revenue bonds, hopefully
totaling $200 million dollars. He
acknowledged the unresolved large block
of money that needs to be filled with
out resources.
1:48:14 PM Mr. Wuerch Reiterated that there is a large
segment of the pie that needs financing
discussion in the amount of $250
million dollars.
1:48:33 PM Mr. Wuerch Addressed the important milestone of
breaking ground. He noted Page 14,
which highlights the 2006 milestones:
· Public release of draft EIS permit
application
· Legislative approvals
· Release of final EIS/record of
decision
· Finalize financing final permits
· Phase 1 construction kickoff
1:49:13 PM Mr. Wuerch Commented on a special grant from the
Mat-Su Borough. He suggested that the
amount become a State funded item, not
using any federal funds. He thought it
qualified as a maintenance upgrade. If
the item was addressed through the
supplemental budget, it could be
completed by next fall.
1:50:06 PM Mr. Wuerch Admitted that no project needs all the
money up front. Page 13, references
cash flow, adding up to the $600
million dollar request. Recently,
those cost estimates have been updated
with the inflation numbers. The 2005
dollars would total approximately $550
million dollars; those same dollars in
2008 would be approximately $595
million dollars.
1:51:31 PM Mr. Wuerch Submitted that the price is right;
acknowledging that there is question
from where the money will come from.
He summarized, noting that worldwide
there are projects that are public &
private partnerships (PPP).
1:52:45 PM Mr. Wuerch reiterated that PPP is a new financing
mechanism with success throughout the
nation. He pointed out that later in
the legislative session, there will be
discussion regarding that opportunity.
1:53:20 PM Co-Chair Meyer Admitted the proposed need for the
Anchorage community; however, noted on
Page 13, the amount of nearly $300
million dollars intended to be funded
by the State.
1:54:24 PM Mr. Wuerch Responded that initially there was an
expectation that the project would be
divided into thirds. One third,
federal earmarks (which has been
deleted), one third, State general
funds and the final third raised by
debt revenue bonds. The one third
intended to be federal is currently
half that amount. He thought that the
one-third revenue bonds would not be
problematic and that the other portions
need to be discussed and offered to
work on a combination of private and
public financing.
1:55:23 PM Co-Chair Meyer Inquired if further federal funding was
expected.
1:55:35 PM Mr. Wuerch Responded that it is a complex issue.
The Federal Highway Commission (FHC)
has not yet released their allocation
notice. The railroad specifics have
not been identified and it has not been
determined how the federal money will
be spent.
1:56:01 PM Co-Chair Meyer Asked if the State would ultimately be
responsible.
1:56:14 PM WILLIAM GREEN, Explained that the State would have no
PROJECT liability for the revenue bond debt
COUNSEL, KNIK issued by the Toll Authority. The
ARM BRIDGE AND preliminary analysis has been provided.
TOLL The market will not lend the money
AUTHORITY, unless they are convinced that there is
ANCHORAGE a good financial plan and the costs are
realistic. The traffic that is expected
to be generated across the bridge will
match the debt load. The Authority can
finance the $200 million dollars based
upon current known projections. He
stated that was a conservative number.
He reiterated that there would be no
State liability for the debt
reimbursement and that the project
would be self-liquidating.
1:58:21 PM Co-Chair Meyer Requested more information on the
bridge design and seismic activity.
Mr. Green requested that the Department
address that concern.
1:58:48 PM Representative Asked if the design process included
Hawker any major rail crossing. He spoke to
the complications for the railroad
through northern Anchorage and the
Valley.
1:59:22 PM Mr. Wuerch Replied that it had been considered and
discussed with the Alaska Railroad.
The issue is that railroad bridges are
designed for a much heavier load than
highway bridges and therefore much more
expensive to build. There has been a
proposal to build a highway bridge and
built it to railroad specifications.
An EIS project could take several
years. Any large water body in the
Nation has two bridges side by side;
one for cars and one for the rails.
2:00:39 PM Representative Addressed tolls, suggesting that the
Hawker traffic will choose the route without
the toll. He questioned if the Alaska
public would support a toll system.
2:01:37 PM Mr. Wuerch Agreed, noting that people are used to
free use of the transportation
structure. Nevertheless, pointed out
that the Golden Gate bridge was a good
example. He suggested that the
situation was similar because of the
distance that would have to be driven
without use of the bridge. He
referenced Page 3 with the
transportation numbers. He pointed out
that using the proposed bridge, which
becomes a function of time for
commuters, could save 40 miles. The
cost of driving a car is far more than
the cost of filling the tank. The
alternatives are more expensive.
2:03:58 PM Mr. Wuerch Continued, the second important
indicator as listed on Page 3 and
provided by the Dip man Resource
Company survey poll indicates the
number of commuters who actually intend
to use the bridge. There was an
overwhelming the consumer support.
2:05:22 PM Representative Mentioned the price sensitivity issue.
Hawker
2:05:38 PM Mr. Wuerch responded that the numbers on the poll
ran from $1 dollar to $6 dollars. He
commented on doubling price, admitting
the 'trade off'. When prices change,
people tend to use the alternative
briefly. It has been recommended that
the price should be established and
then not changed for quite sometime.
2:06:35 PM Representative Questioned the assurance of the $600
Hawker million dollar proposed number and
asked assurance that amount would not
change and if it does include road
improvements.
2:07:07 PM Mr. Wuerch Stated that it would connect the
facility to existing roads. The map on
Page 5 indicates where the road would
run. By 2021, the existing couplet
would reach saturation.
2:08:09 PM Representative Asked where the improvements would be
Hawker to.
2:08:21 PM Mr. Wuerch Said it was not intended to 'touch' the
Berger Road at all.
2:08:29 PM Representative Commented that there would need to be a
Hawker substantial investment to upgrade those
roads.
2:08:46 PM Mr. Wuerch Agreed, as the traffic increases. That
does not happen right away. The current
two-lane road will be adequate for a
number of years. He was speaking about
the connecting road from Goose Bay to
Fort MacKenzie.
2:09:34 PM Representative Inquired if the $6 million dollar
Hawker number was "solid" for the proposed
term of the project from 2006 to 2009.
2:09:49 PM Mr. Wuerch Stated that number was safe. The
bridge structure itself and behind the
Port of Anchorage, the box tunnel under
Government Hill, each include
construction, design and contingency
costs and about 20%. Those numbers
total about $535 million dollars in
2005 numbers and then adds escalation
and inflation costs. That brings the
number up to about $592 million
dollars. However, he could not
guarantee the number but believed it
was "good".
2:11:36 PM Vice Chair Commented on the Railroad options and
Stoltze how that would affect eminent domain
concerns and the costs associated with
the over pass. He inquired if there
had been conversations with Mr. Gambell
of the Alaska Railroad.
2:12:59 PM Mr. Wuerch Noted that Representative Stoltze
served on the Toll Board. He pointed
out that the Board meets regularly to
address railroad concerns. The ability
to use the proposed alignment along the
shoreline is adaptable to railroad use.
He noted that a corridor further west
had been identified. He referenced
figure 2 on Page 10, and laying of the
gravel for the highway and the
railroad.
2:15:21 PM Vice Chair Inquired if the project would compete
Stoltze with other things affecting the gas
line. He thought that anything done
for the Port of Anchorage could help
the gas line.
2:16:19 PM Mr. Wuerch Commented that the first stage would be
the creation of a paved road from Port
MacKenzie up to the Parks Highway. He
recommended that the road needed to
paved as soon as possible. In the long
run, other improvements and the bridge
completed, truckers would not hesitate
to use the direct egress from
Anchorage.
2:17:33 PM REPRESENTATIVE Inquired about the Government Hill area
NORMAN and the proposed underground tunnel.
ROKEBERG He asked if those residents had voiced
objection.
2:18:31 PM Mr. Wuerch Admitted that there are issues in those
neighborhoods. He hoped that working
together would prove beneficial for
that population group and looked
forward to reaching a solution. He
thought that committing to a second
phase would be widely supported. He
did not want to diminish the emotional
issues affecting those areas.
2:20:17 PM Representative Asked the costs to the Government Hill
Rokeberg area.
2:20:38 PM Mr. Wuerch Commented on not building the tunnel.
It would reduce the costs by perhaps
$70 million dollars. He did not know
for sure.
2:21:08 PM Mr. Wuerch Responded to Representative Rokeberg
regarding the second viaduct, which has
not yet been designed. He asked that
the Deportment address that question.
There exists a commuter destination
issue within the downtown traffic.
2:22:57 PM Representative Asked if the Toll Authority anticipated
Hawker a financial audit.
2:23:27 PM Mr. Wuerch Acknowledged that they do. He pointed
out on Page 12, the Department's
standard audit would apply.
2:24:03 PM Co-Chair Meyer Brought up the possibility of
earthquakes while crossing the bridge.
2:24:29 PM Mr. Wuerch Responded that working with the
Department, they were able to address
seismic concerns. He believed that the
final design would be a "doable
solution" to the problem.
GRAVINA ISLAND BRIDGE PROJECT
2:25:47 PM J.C. Conley, Spoke of his excitement for the Gravina
Former Island Project and related the history
Ketchikan of the State project, which was
Assembly requested from Congressman Don Young.
He explained the denial of the use of
surrounding federal lands for logging
purposes. He described the bridge
project as part of the revitalization
of Ketchikan. Mr. Conley referred to
the national media challenge.
2:32:29 PM Mr. Conley Emphasized that the bridge would
revitalize the economy in Ketchikan.
2:33:12 PM REPRESENTATIVE Thanked Mr. Conley for coming.
JIM ELKINS
2:34:03 PM Representative Asked about possible problems getting
Kelly the ships through the channel.
Mr. Conley identified the low
bridge/high bridge solution to the
problem, the preferred alternative.
2:35:56 PM BOB WEINSTEIN, Referred to a letter he sent to the
MAYOR, CITY OF governor and legislators, which is part
KETCHIKAN of the members' packets. (Copy on
TESTIFIED VIA File). He shared the vision for
TELECONFERENCE economic growth for Ketchikan. He
described the challenges Ketchikan
faces in community development due to
its location and that Gravina Island
would be the best choice for further
growth for that community. He spoke of
the closure of the pulp mill in 1997,
decline of the timber business, and the
need for land for industrial
development.
2:41:04 PM Mayor Spoke of a funding allocation for the
Weinstein project and Congress' intent for the
funds.
1. Bridge project will come out of
National Highway Funds.
2. State allocation has increased
3. The Gravina project is competing
against other highway projects
Mayor Weinstein voiced concerns by the
methodology presently used by the
Department. They have made a
determination that 48% of a total
appropriation is set aside for other
highway projects. He questioned the
amount of money available for the
bridge projects but did question DOT's
figures and methodology.
2:45:04 PM Mayor Mentioned requests needed from the
Weinstein Department of Transportation for this
project to proceed. Urged the Committee
to begin the process to invest money
into transportation projects. He spoke
to negative national media coverage of
the project.
2:47:24 PM Vice Chair Inquired if the funding proposal for
Stoltze the Gravina Bridge could be similar to
that of the Knik Arm Bridge proposal.
2:48:15 PM Mayor Agreed that would be reasonable.
Weinstein
2:48:38 PM Representative Commented that it would affect the STIP
Elkins (Statewide Transportation Improvement
Program). He recommended adding in the
support of Ketchikan.
Co-Chair Meyer recommended that the
Department take that into
consideration.
2:49:12 PM Representative Asked if there had been misinformation
Rokeberg regarding the amount of available land
for future development.
Mayor Weinstein stated that the
population of Ketchikan is 15,000; when
the airport was built, the population
was approximately 9,000. There has
been substantial growth since the
'70's. The Borough has an excess of
some 4,000 acres on Gravina Island with
private holdings. Development plans
have identified thousands of additional
acres.
2:51:07 PM Vice Chair Questioned the funding and Ketchikan's
Stoltze willingness to look at the
justification for those numbers.
2:52:06 PM Mayor Related that a toll for bridge use
Weinstein could be considered but that it would
not represent a significant amount.
2:53:20 PM MALCOLM Explained that the project has been
MENZIES, around since 1970, with various studies
SOUTHEAST since then. He related the history of
REGIONAL several of those studies. The EIS
DIRECTOR, process ended in 2004. Three final
DEPARTMENT OF alternatives were made and F-1 was the
TRANSPORTATION preferred alternative. [Shown on
AND PUBLIC screen presentation].
FACILITIES Within the preferred alternative, there
were two major bridges; one 2500 feet
and one 3400 feet in length. Most of
the design estimates were based on the
decision to earmark for the total
project. Portions of the project have
begun, such as Ridge Road. The airport
runway expansion will take place later
this year. A conduit will be
constructed under that runway for two
lanes of traffic. A corps of engineer
permit is expected this month after
th
January 15.
2:57:43 PM Mr. Menzies Explained the three alternatives [shown
on presentation slide]. D-1, F-1, and
F-3. He related the costs and
projected dates of the project.
2:59:28 PM Representative Inquired about the possibility of a
Holms drawbridge. Mr. Menzies related that
would have traffic and cost problems.
He clarified that none of the bridges
currently are at grade and that a 200'
clearance for the cruise ships would be
needed which would be very costly.
3:01:21 PM Co-Chair Asked if both of the bridges were high
Chenault spanned. Mr. Menzies responded that one
bridge would have a span of only 60'
and the other 200'. The high bridge
would be the west channel, closer to
the airport. There is marine traffic
on both channels.
3:02:52 PM Representative Addressed the shorter span and asked if
Kelly it would create an air-traffic problem.
3:04:04 PM Mr. Menzies Agreed it would.
3:04:32 PM Co-Chair Meyer Asked about the current progress. He
asked if the $94 million dollar amount
would allow continued progress.
3:05:05 PM Mr. Menzies Stated that there has been discussion
regarding how many bridges that should
be built at one time. The Southeast
Region has considered waiting until all
the money is received because if bridge
construction was started and the monies
were not received, it would be quite
problematic. The road currently under
construction, comes from the Governor's
resource money.
3:06:03 PM Representative Asked if there would be operational
Stoltze costs and if the ferry would shut down.
3:06:16 PM Mr. Menzies Replied that it would stop eventually.
The overall construction period will
take approximately 5 years and during
that time, the ferry will continue.
3:06:38 PM Representative Commented on national feedback from the
Stoltze Democratic Party.
3:07:06 PM Representative Asked about the Knick Island stretch.
Kelly Mr. Menzies clarified that there are
almost 800 acres of borough land on
that island.
3:07:44 PM Representative Asked the number of residents.
Kelly
3:07:55 PM Representative Did not know the exact number but knew
Elkins it was "only a hand full".
DEPARTMENT OF TRANSPORTATION & PUBLIC
FACILITIES
3:08:31 PM JEFF OTTESEN, Provided handouts associated with the
DIRECTOR, power point presentation - "Primer on
DIVISION OF the Federal Highway Program for
PROGRAM Alaska". (Copy on File).
DEVELOPMENT,
DEPARTMENT OF
TRANSPORTATION
& PUBLIC
FACILITIES
3:09:04 PM Mr. Ottesen Referenced Page 2. The three key
issues to be addressed are how the
bridge would be funded. He offered to
speak directly to the STIP.
3:10:16 PM Mr. Ottesen Explained the bridge math - Page 2,
explaining the $91 million dollars and
the $93.6 million dollar allocation.
Congress did not do away with the
earmarks but instead renamed them. He
explained the distribution of federal
aid transportation formula funds. The
regulations express that the
unrestricted money has eligibility
restrictions and are divided into a
pie, with 48% to highway funding. The
Governor advised that the bridges would
belong to the National Highway system.
3:12:06 PM Mr. Ottesen Referenced the top chart on Page 3.
The STIP money to communities is not
reduced.
3:12:59 PM Mr. Ottesen All the money indicated those programs
would be made larger than they were in
the STIP.
3:13:53 PM Mr. Ottesen Each project received a certain amount
of federal earmarked dollars. He noted
the reductions of 15% to account for
the fact that federal funds are
authorized at one level and general
appropriated at a lower level. There
are five years of funding providing
information indicating that the funding
promised comes in at 85%.
The two bridges are not being treated
separately.
3:15:03 PM Mr. Ottesen Noted Page 4 - The mission statement:
· Providing for the movement of
people and goods and the delivery
of state services.
· All roads are not equal in that
regard.
3:15:25 PM Mr. Ottesen Addressed the colored chart on Page 4
and the functional classification of
the roads. The Department owns most of
the roads.
3:16:33 PM Mr. Ottesen Spoke to where federal funds applied to
the road systems throughout the State
and did not come from the Title 23
funds. Only Alaska has an eligibility
issue for federal funding. The roads
at the top of the pyramid in the graph
receive less federal funded.
3:17:39 PM Mr. Ottesen Referenced Page 5 - Which highlights
where the majority of the traffic
carried by the roads will move. He
pointed out the 86% of accident that
occur on 30% of the road system.
3:18:58 PM Mr. Ottesen Highlighted the eligibility issues on
Page 6. The impact is that the high-
level roads are less well funded than
they would be if national formula and
eligibility were followed.
3:20:23 PM Mr. Ottesen Eligibility issues (3) - Page 7. Some
earmarks have further shrunk funding
for Alaska's highway program. Earmarks
do not usually come fully funded.
3:21:28 PM Mr. Ottesen Page 7, Eligibility Issue (4).
Operations and preventative maintenance
have shifted to federal funds over the
past two decades. Since late '80's, the
budget pressure to preserve general
fund has shifted considerable costs to
the STIP. The impact is that many
fewer rehabilitation, safety and
capacity projects are possible.
3:22:19 PM Mr. Ottesen Referenced Page 8 - the maintenance and
operations operating budget and
Consumer Price Index (CPI) companion
chart.
3:22:53 PM Mr. Ottesen Noted Page 8, noting that the dollars
are limited. Some earmarks were much
more extensive than just two bridges.
Another $269 million dollars in
earmarks were non-deductive. The loss
of STIP funds to bridge earmarks is
only part of the picture.
3:23:57 PM Mr. Ottesen Commented on what was happening with
funding. There have been more
authorized dollars to the State than
ever before. The total authorization
over a 5-year period is about $2.5
billion dollars. A lot of that money
cannot be spent on the regular STIP.
Some of the earmarks that the
Department received are deductive. He
referenced chart 17, Page 9, earmarks
coming at the expense of formula funds.
3:25:44 PM Mr. Ottesen Outlined the types of earmarks that
went to the two bridges. The
authorized dollars are set aside for
specific categories of work and have
certain restrictions.
3:26:33 PM Mr. Ottesen Referred to page 10, chart one, which
indicates that the dollars are limited.
Approximately $25 million dollars of
annual funds previously flexible in
nature were made restrictive.
3:27:32 PM Mr. Ottesen Explained that the Highway Trust Fund
(HTF) has not been delivering cash as
expected. The HTF is the principal
source of Alaska Highway Funds. An
apparent downturn is of concern.
3:28:56 PM Mr. Ottesen Referenced page 11, and stated that
construction inflation has ramped up
sharply. As project costs rise, the
number of transportation projects the
STIP can fund, drops.
3:29:42 PM Mr. Ottesen Pointed out that the process and new
legal requirements for federal funds
continue to expand. More is spent on
intangibles or non-transportation work,
and less on pavement.
3:30:26 PM Mr. Ottesen Showed on page 12 how STIP funds have
been reduced. Stated that one
significant project (~$12 M) is lost
each year.
3:31:28 PM Mr. Ottesen Pointed to page 13, which indicates
that project funds are lower today. He
recognized the needs list of statewide
projects.
3:33:52 PM Mr. Ottesen Referenced chart #26, which shows that
STIP funding is not adequate.
3:34:02 PM Mr. Ottesen Highlighted page 14, which portrays the
years needed to perform the work on the
entire mileage of each system.
3:34:43 PM Mr. Ottesen Compared Alaska to other states'
approach to highway construction, where
there is a dedicated tax system for
those concerns.
3:37:16 PM Mr. Ottesen On page 15, indicated that the STIP
shortfall to regular projects stems
from many causes. He listed those
reasons in lost project funding.
3:38:03 PM Mr. Ottesen Highlighted the one-year hypothetical
number of $12 million dollar projects
delayed.
3:39:13 PM Mr. Ottesen Referenced page 16: Key Takeaways.
Alaska relies on STIP funds for a
larger universe of projects than any
other state. STIP funds have
effectively shrunk as a result of
several factors beyond two bridges.
The state has no supplemental fund
source for the highway program, which
magnifies the current downturn in STIP
funds. He termed it a "fifty-state
problem".
3:40:30 PM Mr. Ottesen Offered to provide a report on this
topic from the U.S. Chamber of Commerce
published last November.
3:40:54 PM Co-Chair Meyer Asked if the Department of
Transportation would support a road
bond.
3:41:12 PM MICHAEL Responded that the idea of raising the
BARTON, gas tax is not popular. Alaska now has
COMMISSIONER, the lowest gas tax at 8 cents per
DEPARTMENT OF gallon. A higher tax could be a source
TRANSPORTATION of money to meet the transportation
AND PUBLIC concerns of the State. He urged that
FACILITIES it be addressed.
3:42:14 PM Commissioner Added that the state should not loose
Barton sight of the fact that it will receive
$2.5 billion from the federal
government in the next five years for
transportation in Alaska.
3:43:28 PM Co-Chair Meyer He added that local governments,
including Anchorage, do contribute to
transportation.
3:43:49 PM Representative Commented on the allocation concerns.
Hawker He asked if the disposable allocation
is determined by state or federal
legislation.
3:45:03 PM Mr. Ottesen Responded that it was primarily
determined in state by a formula set in
regulation and adopted as policy in
1995, became codified in 2002, and was
amended in 2003. Underneath that
allocation is federal funding and some
rules apply to those funds. He listed
those funds: National Highway System
(NHS), Interstate Maintenance, and
Surface Transportation Program (STP).
3:46:23 PM Mr. Ottesen Explained why there is a larger amount
going to local governments.
3:46:36 PM Representative Asked if there was a flexibility of
Hawker sending nothing to the communities.
Mr. Ottesen explained the system of
distribution.
3:47:12 PM Mr. Ottesen Replied that the need is there.
3:47:27 PM Representative In response to a question by
Rokeberg Representative Rokeberg, Mr. Ottesen
replied that the 27 percent is state
developed funding for Anchorage. He
explained the funding in detail based
on population, and the yield under
federal law. He explained DOT's
obligation and the NPO footprint. He
discussed accident scenarios.
3:51:09 PM Commissioner Explained that the money produced by
Barton the formula for the two NPO's is not
all of the transportation money that
gets spent within the NPO boundaries.
Representative Rokeberg continued to
question the various categories. Mr.
Ottesen clarified the four categories
and explained how they apply.
3:52:42 PM Representative Asked about slide 24 and the expenses
Rokeberg incurred by the open container and
repeat offender laws. Mr. Ottesen
responded with details about the drunk
driving laws. Representative Rokeberg
requested a current report on Anchorage
projects, as compared to a few months
ago, in order to explain them to his
constituents.
3:56:12 PM Commissioner Addressed the changes in the STIP
Barton compared to several months ago. There
are increases in several local
programs, but no changes in the NHS.
Representative Rokeberg asked about
alternative impacts if the funds were
allocated elsewhere. Commissioner
Barton discussed NHS concerns.
3:58:28 PM Co-Chair Meyer Gave a concrete example of money lost
for highways in Anchorage. Mr. Ottesen
related that those highways were on the
NHS, which has not grown. There will
be an increase to the NPO as a result
of the bridge money coming back to the
state.
3:59:25 PM Representative Asked if NHS funding is increasing.
Hawker Mr. Ottesen noted a direct reduction in
funding going to the NHS. The funding
target for the NHS, aside from the two
bridges, is about $60 million or about
40 to 50 percent of past targets in the
prior bill. Representative Hawker
speculated that $120 million had left
the program. Mr. Ottesen explained the
reality of where the dollars are.
Representative Hawker noted he was
looking for the aggregate number. He
spoke of communities' possible
unrealistic expectations and the need
now for an explanation. He asked for
an explanation for the aggregate
changes related to District 32 and
Anchorage.
4:04:56 PM Commissioner Offered to work with Representative
Barton Hawker to provide more information.
4:05:45 PM Representative Asked about the earmark structure and
Hawker whether change is an option. He
referred to the original additive
earmarks for bridge construction.
Commissioner Barton replied that they
are no longer earmarked for bridge
projects and change is not an option.
Representative Hawker suggested that
$179 million was taken away for other
programs. Commissioner Barton agreed.
4:08:33 PM Mr. Ottesen Clarified that all of the bridge
earmarks were run through the STIP
formula and distributed to local
governments. Representative Hawker
asked about the $50 million additive
for Anchorage. Mr. Ottesen explained
how that was processed. Representative
Hawker suggested that the money was
diluted. He asked where the money came
from for the subtractive earmark. Mr.
Ottesen explained that it came at the
expense of what would have otherwise
been formula money. $600 million was
deductive earmarks. Representative
Hawker requested more information about
those specific projects. Mr. Ottesen
explained the old formula, the
installment plan, and the reality of
what happened. He compared it to
losing 1/3 of one's salary.
4:12:36 PM Representative Noted it is a judgment call. The draft
Hawker STIP is $122 million less now. He
asked for DOT's intent and how the
legislature's concerns will be
incorporated.
4:14:11 PM Commissioner Replied that the STIP needs to be
Barton finalized and will be done in a couple
of weeks. The STIP will be amended as
needed if the legislature requires it.
4:15:56 PM Co-Chair Meyer Noted that the governor's bridge
proposal would be part of the STIP now,
and in the future. Commissioner Barton
agreed and pointed out that the
governor is aware of the dilemma and
has it under consideration.
4:17:03 PM Co-Chair Meyer Asked to see information about what
roads would not be addressed.
Representative Hawker concurred.
4:17:20 PM Commissioner Thought that would not be an easy
Barton question to answer.
4:17:41 PM Representative Voiced concern about policy issues
Rokeberg regarding further requests to complete
the projects. He used the Seward
Highway accident rate as an example of
an important priority.
4:19:14 PM Commissioner Acknowledged the safety issue on the
Barton Seward Highway, pointing out that
fatalities in Alaska were down the past
year. He spoke to the need to continue
to address safety on highways.
4:19:57 PM Representative Commented on the Ketchikan Bridge and
Rokeberg the possible need for a further
request.
4:20:13 PM Commissioner Said the financial methods are still
Barton being worked on.
4:20:44 PM Representative Observed that the state of Alaska has
Hawker no recurring sustainable local
contribution to highway funding. He
commented on motor fuel taxes. Public
polling has indicated that motor fuel
taxes are the single most despised form
of taxation in the State. He
acknowledged that the legislature is
"between a rock and a hard place" with
that information and is looking for
sustainable funding statewide. He
supported putting those ideas before
the public.
4:23:04 PM Co-Chair Meyer Agreed. He pointed out that the
Governor has been "lukewarm" toward
those ideas.
4:23:33 PM Representative Agreed with the commissioner on the
Moses motor fuel tax. He said it is based on
8 cents per gallon, which is too low -
the lowest in the nation in a state
with the greatest mass of land. He
noted that he encouraged an increase in
the marine fuel tax a few years ago.
That tax should also be increased, as
it is a user fee.
4:25:55 PM Representative Added that it would be a great
Moses investment for the future of Alaska.
He noted his own proposed legislation.
4:26:39 PM Co-Chair Meyer Commented that gas is currently $2.50
per gallon and it is difficult to add
more taxes.
4:27:21 PM Representative Requested cost breakouts as asked for
Kelly previously at the meeting by the
committee members.
4:30:26 PM Co-Chair Meyer Acknowledged that lists are needed from
DOT indicating surplus and general fund
dollars.
4:31:10 PM Commissioner Replied that DOT will provide that
Barton information.
4:31:23 PM Co-Chair Meyer ADJOURNMENT
The meeting was adjourned at 4:29 P.M.
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