Legislature(1999 - 2000)
03/16/1999 01:35 PM House TRA
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
JOINT MEETING
HOUSE TRANSPORTATION STANDING COMMITTEE
SENATE TRANSPORTATION STANDING COMMITTEE
March 16, 1999
1:35 p.m.
HOUSE MEMBERS PRESENT
Representative Beverly Masek, Chair
Representative Andrew Halcro
Representative John Cowdery
Representative Jerry Sanders
HOUSE MEMBERS ABSENT
Representative Bill Hudson
Representative Allen Kemplen
Representative Albert Kookesh
SENATE MEMBERS PRESENT
Senator Jerry Ward, Chairman
Senator Drue Pearce
SENATE MEMBERS ABSENT
Senator Rick Halford
Senator Mike Miller
Senator Georgiana Lincoln
COMMITTEE CALENDAR
OVERSIGHT HEARING: ANCHORAGE INTERNATIONAL AIRPORT EXPANSION
PROJECT
PREVIOUS ACTION
No previous action to record
WITNESS REGISTER
KURT PARKAN, Deputy Commissioner
Department of Transportation & Public Facilities
3132 Channel Drive
Juneau, Alaska 99801-7898
POSITION STATEMENT: Presented introduction.
DAVID R. EBERLE, Program Director for Gateway Alaska, and
Director of Construction and Operations
Central Region
Department of Transportation and Public Facilities
P.O. Box 196900 M/S 2525
Anchorage, Alaska 99519-6900
POSITION STATEMENT: Presented information.
DON KETNER, Project Manager
Anchorage International Airport Terminal Redevelopment Project
(Address not provided)
POSITION STATEMENT: Answered questions.
MORTON V. PLUMB, JR., Director
Anchorage International Airport
Department of Transportation and Public Facilities
P.O. Box 196960
Anchorage, Alaska 99519-6960
POSITION STATEMENT: Answered questions.
ACTION NARRATIVE
TAPE 99-11, SIDE A [HOUSE TRA TAPE NUMBER]
Number 001
CHAIRMAN JERRY WARD of the Senate Transportation Standing
Committee called the joint meeting with the House Transportation
Standing Committee to order at 1:35 p.m. Committee members
present at the call to order were Senator Ward and
Representatives Masek, Halcro, Cowdery and Sanders. Senator
Pearce arrived as the meeting was in progress.
Number 041
KURT PARKAN, Deputy Commissioner, Department of Transportation &
Public Facilities (DOT/PF), provided the introduction to the
presentation on the Anchorage International Airport Expansion
Project. He noted that this is the biggest project DOT/PF has
ever undertaken. Many different individuals are involved in the
ongoing review of this project, he explained, including the
airlines' technical committee, the airport staff, and staff from
the legislature assigned to follow up on the project. He
introduced David Eberle to start the presentation.
Number 080
DAVID R. EBERLE, Program Director for Gateway Alaska, and
Director of Construction and Operations, Central Region,
Department of Transportation and Public Facilities (DOT/PF), came
forward to give the presentation. He distributed a handout
entitled "Anchorage International Airport Terminal Redevelopment
Project, Project Update, March 1999." He reported that the
project is about 3 to 4 percent complete, and they are just
getting geared up for the upcoming major contracts. The effort
to date has focused on completing the schematic design, which was
completed in January. Since that time, however, the team has
been going through detailed value-engineering and cost-reduction
exercises to bring the project back within the confines of the
budget. He gave the example of building a house, and advised
members that the airport users and tenants have all asked for
additional items that may or may not be accommodated, according
to the budget.
Number 126
SENATOR PEARCE asked what had changed in one year that required
altering the budget.
MR. EBERLE indicated that the requested floor space has
increased, and the airlines have requested additional ticket,
lobby and gate areas. The original conceptual design was based
on the best available information at that time. He explained
that the detailed schematic design laid out floor space needs for
each individual airline and tenant. He indicated that this
represents an approximate increase of 68,000 square feet over the
baseline in the conceptual design.
SENATOR PEARCE asked whether that means that the experts who were
paid a lot of money to come up with the concept didn't know what
they what talking about.
MR. EBERLE said he would view it as just the opposite. He
stated:
The initial guess is just that. We are trying to best-
guess what all the tenants are going to want. ... We
are not in a detailed design phase at that point. We
had to start somewhere. We have now advanced by having
one-on-one meetings with the airlines and all of the
tenants. Through that process is where we detail
exactly what each tenant wishes in the way of space.
In addition to that, about a third of the additional
... area is attributed to a basement level access,
which is non-public circulation, but will preclude
future problems on the airside operation.
Basically, that basement level is a corridor, as a
service entrance, to allow all the incoming material,
supplies, the food service, the retail vendors; all
that stuff is brought in through the corridor at the
basement level, rather than having to access on the
airside, which interrupts airline operations, or access
in on the public entrance side, which interrupts the
passengers.
Number 166
SENATOR PEARCE remarked that she was told all of the users and
operators were part of the original discussions with the designer
on an ongoing basis.
MR. EBERLE acknowledged that they had been; however, the detailed
level of discussions had not taken place yet.
SENATOR PEARCE noted that discussing corridors underneath to get
supplies in and out seemed pretty basic.
MR. EBERLE explained that the original concept was for an air-
side entrance; however, after it was looked at in detail and
long-term goals were discussed, it was agreed that basement
corridor access was a better idea.
Number 181
MR. EBERLE reported that they are currently in the process of
launching the detailed design, turning it into a contract
package, and having it "bid out in a hard-money contract." In
addition, Concourse "C" is in the process of being vacated, with
the remaining tenants to be relocated by May, and the bulk of the
construction to date has involved the relocation of those tenants
to the North Terminal. The contract for demolition of Concourse
"C" will be advertised this month, and the first part of that
process will be asbestos abatement during May and June. The
actual demolition of the building will begin in July.
MR. EBERLE further reported that the overall design is about 40
percent complete on the land side, and it will be constructed in
two phases. The first phase is incoming access and the extension
of curbside ramps, and that construction start is scheduled for
July. The new access road will be opened in May of 2000; after
that, the second phase will begin.
Number 208
MR. EBERLE explained that the airside work is only about 10
percent done on the "design side," and it has been pushed off
until the year 2000, awaiting the additional $25 million in
bonding. He reported that the only work done on the airside so
far was apron repaving done last fall to support the relocation
of ERA/PenAir. He referred the committee to the first page in
the "Budget" section of the handout. Last year, the budget was
set for $230 million, which is broken down as follows: $178.7
million in airport revenue, $26.3 million in federal highway
funds, and $25 million in FAA [Federal Aviation Administration]
funding.
MR. EBERLE explained that the FAA funding has been secured in a
Letter of Intent (LOI), which is a discretionary grant received
over a 10-year period. The LOI is actually for the amount of $48
million, and it includes some additional projects beyond those
related to the original project, specifically, Runway 6L/24R
Reconstruction and Apron Reconstruction (Asphalt). In addition
to that, Mr. Eberle pointed out, the actual portion of the LOI
available for the Terminal Redevelopment Airside Projects exceeds
the original $25 million requested; however, the problem is that
the cash flow is received over 10 years, and the work is
scheduled over four years. In order to accomplish this
construction, DOT/PF is requesting an additional $25 million in
bonding authority.
Number 239
CHAIRMAN WARD asked whether DOT/PF has submitted a request to the
congressional delegation asking for the time frame to be changed
from 10 years to one year.
MR. EBERLE said no.
Number 244
REPRESENTATIVE COWDERY asked if the bonds were going to be sold
according to the interest rate.
MR. EBERLE indicated that the plan is to sell the bonds in August
of 1999. He went on to explain to Representative Cowdery how the
LOI funds were distributed, according to the second page of the
"Budget" section of the handout.
REPRESENTATIVE COWDERY asked how the bond costs were going to be
paid from August until the initial LIO money arrives.
MR. EBERLE responded:
The initial debt service on the bonds is all being
capitalized as part of the overall finance plan. The
actual debt service on the bonds ... isn't due to start
repaying until the year 2002. So, the first several
years of the bond interest is being capitalized, and
that is at the request of the airlines. So the payment
actually is going to start taking place at the point
where you start getting revenue generated from the new
terminal project; in other words, the additional space
is starting to become available.
REPRESENTATIVE COWDERY asked what the approximate interest costs
would be from the time the bonds are sold in August until the
time the funds are received.
MR. EBERLE explained that if there were two years of capitalized
interest at roughly five percent, the figure would be
approximately $2.5 million. He pointed out that the airlines
approved this project on the basis that a full $204 million would
be bonded, and there was no plan for the LOI of FAA money to be
added to the project. He said, "The benefit here is that now we
have LOI monies to pay back part of that $204 million."
REPRESENTATIVE COWDERY noted that there may be PFC [Passenger
Facility Charge] money as well.
Number 299
MR. EBERLE next referred the committee to the third page of the
"Budget" section of the handout. He stated that the balance of
the project is the same, including the overall budget; however,
"Phase II bonds" are being requested in the amount of $25
million. He called attention to the "Summary Project Schedule"
in the handout, and noted that the goal is to have the Terminal
"C" replacement open to the public in the spring of 2002. After
that terminal is opened, in the off-season, the existing ticket
lobby area and Concourse "B" will be remodeled. He mentioned
that the roads will be built in two phases.
Number 327
MR. EBERLE clarified that parallel to, but not part of, this
project is the Alaska Railroad Corporation's plan for a rail
station at the terminal. This is currently in the design phase,
and the earliest any construction would actually begin is the end
of 1999. He explained that the railroad's goal is to come online
about the same time Concourse "C" opens. He next addressed road
construction, explaining that construction of the new incoming
lane will be constructed in the summer of 1999, and that it can
be constructed without interrupting the existing traffic, other
than at the cross points. The main circulation loop into the
airport will stay the same, he noted, for the bulk of this
summer; however, late in the season, after the "summer rush," the
upper ramp will have to be shut off for approximately four to
five months to allow for extension of a 600-foot bridge. The
goal is to have this phase opened to the public by May of 2000.
Once that is in place, he added, the exit loop will be started,
and this is a new configuration that will not disrupt traffic
much until it is ready to be switched over. Finally, the parking
lots will be reconfigurated after traffic is under new alignment.
Number 345
CHAIRMAN WARD asked Mr. Eberle to point out the location of the
railroad route and depot on the chart. He also asked whether the
railroad had acquisition costs in that plan.
MR. EBERLE confirmed that the railroad has $28 million to design
and build the facility, and they are currently engaged in an
ongoing discussion with the airport regarding putting together a
lease option.
Number 359
REPRESENTATIVE HALCRO indicated that the railroad was conducting
a feasibility study with regard to this project, and that they
had committed to at least doing a tunnel that would be ready when
the project became economically viable. He wondered if there was
any update on when the feasibility study would be completed.
MR. EBERLE said he believed the feasibility study would be
completed by the end of March or early April.
REPRESENTATIVE HALCRO sought clarification as to whether it would
be determined at that point to build a rail station or if they
have already committed to do so.
MR. EBERLE stipulated that they have only committed to the tunnel
portion and design of a rail station. He believed that
discussion was going to occur at the April 8, 1999, board meeting
of the railroad.
Number 373
REPRESENTATIVE HALCRO asked:
Will you take into consideration the feasibility study
that comes back? Or, if they just come to you and say,
"We want to build it; we have the $28 million and we're
going to do it, regardless of the feasibility," is that
something the airport is just going to accept?
MR. EBERLE reiterated that Alaska Railroad Corporation is
currently engaged in lease negotiations; however, part of the
price of that lease option is their commitment to building a
tunnel, which they have done because it works directly with the
first phase of construction. The time to build a tunnel, he
explained, is the beginning of fall 1999, as road construction
begins; that way, traffic will not be disrupted more than once.
CHAIRMAN WARD inquired as to the cost of the tunnel.
MR. EBERLE indicated that the railroad has committed to
approximately $1.5 million and that another $1 to 1.5 million
will be needed to finish the tunnel and make it usable to
passengers.
CHAIRMAN WARD asked whether the railroad is planning to borrow
the needed $28 million or already has it in possession. If they
already have it, he questioned how they were able to obtain this
amount of public funds.
MR. EBERLE said he understood it to be a direct federal
appropriation to the railroad.
Number 392
REPRESENTATIVE COWDERY asked whether the railroad would pay the
same rental rates as the airlines and other vendors at the
airport.
MR. EBERLE reported that was currently under discussion. He
continued his presentation by next referring to the page in the
handout entitled "Contracts Awarded." He pointed out that
approximately $5 million in contracts have been awarded to date.
Number 408
REPRESENTATIVE COWDERY returned to discussion of the railroad.
He noted that there has been some concern that the walkway from
the rail station to the airport terminal would be too long. He
asked approximately how long it would be, and if it would have a
moving sidewalk.
MR. EBERLE confirmed that the railroad has requested that the
walkway be designed to allow for a moving sidewalk.
REPRESENTATIVE COWDERY asked whether the railroad would then own
that moving sidewalk or if it would be part of the airport.
MR. EBERLE said it is a detail to be worked out in the lease
agreement. The tunnel itself would become the property of the
Anchorage International Airport, and then they would operate and
maintain the tunnel with the rest of the facility. The balance
of the rail station would be the responsibility of the railroad.
He referred the committee to the page in the handout entitled
"Contracts Scheduled for Bid"; he pointed out that there will be
more than 30 contracts used for this project.
Number 424
SENATOR PEARCE noted that the project cost in 1997 dollars was
$190.8 million, not counting the interest and insurance costs for
the bonds, and that the escalator was placed at $14.5 million,
which is more than 7.5 percent, to reach the total capital
request of $230 million. She pointed out that it has now been
decided to add over 60,000 square feet. She referred to the
baggage conveyer equipment cost estimation of $13 million,
pointing out that the notation states that it would have separate
funding. She asked, "What is the funding source for that?"
MR. EBERLE explained that the airlines have approved pulling that
out as a separate project. They are proposing to do that as a
separate CIP [Capital Improvement Project] or a possible
candidate project for PFCs [Passenger Facility Charges].
SENATOR PEARCE asked how the airlines were able to delegate state
funding.
MR. EBERLE said that the baggage system that was originally
envisioned in the Terminal Redevelopment Project was very limited
in nature and was less than $2 million in the original project
budget. Having done an in-depth study of the baggage system -
and considering the age of that system and the additional
features that could be more convenient for travelers, such as
curbside baggage check-in systems, interline belts, and new bag-
claim systems - the airlines and the airport have agreed that a
complete replacement of the baggage system is in order. Mr.
Eberle added, "It's either now or later. Now would be the time
to do it as part of the new project; however, we don't have that
in our budget. We've identified that as, 'If a new baggage
system is desired, then something else has to give.'"
Number 449
SENATOR PEARCE noted that she fought to get this project approved
last year, and it was presented as a $230 million project at that
time. She wondered how a project of such scope could be planned
with only $2 million allotted for baggage facilities.
MR. EBERLE explained that the scope of the original concept did
not include total replacement of the baggage system.
SENATOR PEARCE referred to the page in the handout entitled
"Contracts Scheduled for Bid," and she observed that $13 million
for airport baggage handling systems was scheduled to be
advertised for bid on March 3, 1999. She asked whether that was
funded.
MR. EBERLE said no, and added, "That was the original concept.
We are paring that back to the $2 million that is, roughly,
needed to do the ERA/PenAir bag relocation and, also, that won't
be advertised until the end of the year or early next year."
SENATOR PEARCE stated her understanding that the chart was
incorrect.
MR. EBERLE said yes.
SENATOR PEARCE inquired as to the other portions of the $20
million, not in the original budget, that are suddenly on the
"wish list." She wondered if the airlines were going to provide
their own flight information displays.
MR. EBERLE indicated that was correct.
SENATOR PEARCE pointed out that interior construction for the
third floor was being deferred. She said she assumed that future
use of any space on the third floor would be an additional cost
to the state.
MR. EBERLE replied, "That could be a tenant cost, depending upon
who utilizes the space."
SENATOR PEARCE asked why the tour baggage check-in area roof was
being lowered.
MR. EBERLE indicated that the original concept for the tour
baggage check-in area was for a very high roof of the same level
as the rest of the terminal. By lowering that and building a
floor between the check-in counters and the baggage claim, he
explained, it would allow for future expansion.
Number 470
CHAIRMAN WARD asked how it was decided to make this change.
DON KETNER, Project Manager, Anchorage International Airport
Terminal Redevelopment Project, explained that the change came
about, after a value engineering exercise, as one of the ways to
reduce the cost estimate for the overall project.
CHAIRMAN WARD asked whether reduction in efficiency was weighed
against the cost reduction.
MR. KETNER replied:
The value-engineering exercise occurred in two
directions. First, we had our design team go through
the project and look at various components of the
project and evaluate them in terms of functional value
cost and various other factors, and come up with
recommendations to look at. We had various workshop
meetings with the airlines to make decisions on where
we would best -- I guess what it came down to was, at
the end of schematic design or toward the end of
schematic design, we recognized that ... we had a scope
that, more than likely, required a budget that exceeded
what we had in hand.
CHAIRMAN WARD asked why that was.
MR. KETNER said, "Because of the schematic design process. When
you move from a concept into a more detailed design, just like
you do with a house, what winds up happening is...."
Number 485
SENATOR PEARCE declared that she had personal experience building
a house. Upon finding out that the scheme was bigger than the
budget, she cut back to fit her budget. She emphasized that if
the state cannot afford this project at $230 million, they should
not be going forward. She pointed out that she sat through many
meetings last year and heard testimony from the airlines that
baggage handling equipment was very much needed, and she did not
know how the Terminal Redevelopment Project put together an
entire scheme for a new airport terminal without that equipment
properly budgeted. She observed that the project is already
$34.5 million overbudget, and they are only 3 percent into the
project. She summarized by saying, "I don't support it anymore."
Number 501
REPRESENTATIVE COWDERY referred back to the change in the roof
design of the tour baggage area. He asked if the amount of floor
space was still the same as originally designed, and if it still
would handle the same amount of tour buses.
MR. KETNER said yes.
REPRESENTATIVE COWDERY observed that construction costs have been
cut back because of a less valuable roof structure. He sought
assurance that, conceptionally, the area is still the same size.
MR. KETNER referred to a draft explaining the new roof for the
tour baggage area. He explained, "What this roof eventually
becomes is the future floor structure for ticket lobby
expansion."
Number 513
REPRESENTATIVE HALCRO reopened the question of baggage handling
equipment. He noted that the funding source of the $13 million
requested for the baggage system is not known; however, $2
million will be used for ERA/PenAir baggage relocation. He
wondered where the additional $11 million will be coming from.
MR. EBERLE said it is yet to be determined whether the airlines
want to pursue it as a separate CIP project; pay for the systems
directly; or have it under the PFC application.
REPRESENTATIVE HALCRO noted that $1.8 million will be saved on
interior construction for the third-floor office spaces. He
asked whether this was for the 9000 square feet of unfinished
office space.
MR. KETNER said no. He explained that roughly 22,000 square feet
is available for future airport administrative offices on the
third floor, as well as a "VIP room," the Alaska Airlines board
room, and other lease offices. The entire third level would be
left unfinished, and the interior building of that area is the
$1.8 million figure.
Number 534
REPRESENTATIVE COWDERY noted that a question arose last year
about Project Labor Agreements (PLAs). He recalled that the
commissioner of DOT/PF stated at that time that there were no
plans for PLAs. He asked whether that has changed.
MR. EBERLE said no. He mentioned his understanding that the
commissioner of DOT/PF has recently been approached by union
representatives interested in PLAs. To his knowledge, he stated,
that has not happened.
REPRESENTATIVE COWDERY felt that it would be inappropriate for a
government project to enter into PLAs, and that it would cut out
many contractors, possibly at a lower price. He emphasized that
it would not be in the best interests of everyone concerned.
CHAIRMAN WARD confirmed that Mr. Ketner is Project Manager for
the Terminal Redevelopment Project. He then asked, "If, in fact,
... these committees are under the impression that the project is
not going forward ... the way we had anticipated it when we
funded it last year, and if there had to be a realignment of the
project to work within the existing budget, ... as project
person, where would you reduce back, in order to make this fit
into the existing funding sources that there are?"
Number 557
MR. KETNER indicated that the team had put together a number of
alternatives that were reviewed by the airport and the airlines;
in some cases, they were reviewed in a public forum. They
currently have a list of cost-cutting measures that do not
represent the original concept versus the current schematic
design. There are additional opportunities to reduce costs, he
noted, but those would probably involve reducing square footage.
They plan to take this to the air carriers and to work with them
to see where future reductions might be appropriate.
CHAIRMAN WARD emphasized that the airport belongs to the public,
not the air carriers, so he hopes that they are willing to take
suggestions from the public. He asked whether they had gone
through "the exercise of staying within the budget." All of this
money comes out of one pot, he added, and even the railroad is
part of public funding. Moving money around from project to
project still involves using money that belongs to the people.
Number 580
MR. KETNER answered that first, all of the costs that would be
associated with a CIP would either come through PFCs, which would
be generated as airport revenue, or as a separate CIP request
generated as the International Airport Revenue Fund (IARF) under
the standard CIP process. He said the important question for the
project team to answer is, "How are we going to stay within the
$230 million?" He indicated that it was fair to characterize the
baggage system costs as substantially beyond what was originally
anticipated. He admitted that there may have been some
underestimation on their part initially; however, it was nowhere
near the $13 million requested by the air carriers. Mr. Ketner
added that the air carriers had brought up that it is customary
at other airports, in some cases, for airlines to bear that cost
or to look at other funding opportunities.
TAPE 99-11, SIDE B
Number 001
MR. KETNER declared that the Airport Redevelopment Project is
still within its original budget, with the exception of the
separate funding for the baggage, even with the increase of over
60,000 square feet.
CHAIRMAN WARD asked if there was a contingency plan in place.
MR. KETNER indicated that the contingency plan would have to be
processed by going back to the airlines, the users of the
terminal, and the public to look at how further cuts could be
made. He related that the team has ideas as to what can be cut,
but those ideas have not been prioritized yet.
CHAIRMAN WARD asked Mr. Ketner to submit those ideas to the
committees as soon as they are available.
Number 013
SENATOR PEARCE stated:
Depending upon what calculation you used and whether
you'd consider the escalation over the original project
costs to be normal or not normal, you are now 17
percent overbudget, if you count that escalation, plus
the $20 million in original things that you are not
going be able to do, or you're going to have to come
back and ask us for more money one way or another,
because if it's PFCs, it would still have to be
appropriated; if it's IARF funds, that still has to be
appropriated.
SENATOR PEARCE said it is Alaskans who will end up having to pay,
because they fly the airlines. She noted that PFCs have not yet
been approved and may not be approved, and that the additional
$25 million requested may not be approved, either. In addition,
the project may end up being shut down until it is able to fit
inside the original cost, because, she said, "we are not giving
you any more money. This isn't like building a house and some
rich uncle hands you more dollars. This is sticking with the
budget."
MR. KETNER asked for clarification as to whether Senator Pearce
was including the escalation outside of the budget.
SENATOR PEARCE said no.
MR. KETNER clarified that the escalation was determined to the
mid-point of construction, and the design and construction budget
they are working to right now is $205.3 million.
SENATOR PEARCE declared, "You have already used every dollar of
that."
MR. KETNER said that was correct.
SENATOR PEARCE noted that every penny has already been used. She
asked what would happen when the mid-way point had been reached,
if there were more problems.
Number 032
MR. KETNER responded, "In terms of ... program contingency, you
are absolutely correct."
SENATOR PEARCE reiterated, "You've already used all your
contingency monies and you are 3 percent in." She again asked
what the project will do now for funding if something comes up
that they did not know about ahead of time.
CHAIRMAN WARD asked Mr. Ketner, as Project Manager, whether this
is how projects are usually done.
MR. KETNER indicated that the program contingency was initially
set up for adjustments in the program. He agreed that it was
fair to say there could be the need for some program adjustments
in the future. He said there is a 10 percent change order
construction contingency on new construction and a 15 percent
contingency on renovation. In addition, he felt that a fairly
conservative estimate has been built into the renovation figures
because they realized certain unknowns might be identified in the
renovation process. He pointed out that they were fairly
comfortable, at this point in time, with the renovation budget.
He said:
That does not take away from Senator Pearce's point of
view that some additional contingencies further into
the project might be advisable. ... It appears ...
right now the scope on the project has solidified to a
point where we know what we're designing. We're at the
end of schematic design, where certain decisions would
have to be made, so that we can move ahead with higher
level design. At this point in time, we've gone to the
airport, we've gone to the airlines to make those
decisions, and they've made them. ...We're moving ahead
with the more detailed design in order to meet the
schedule.
Number 052
SENATOR PEARCE wondered if they said no to anything the airlines
asked for, and, if so, what those things were.
MR. KETNER said yes, and noted that some of the items were in the
"Cost Reduction List" in the booklet. There were other ideas
that he felt would provide a fairly severe cut, such as reducing
gate lounge areas, ticket lobby areas, and baggage claim lobby
square footage. He noted, however, that all of those items have
fairly significant impacts on the functionality of the terminal.
He stated that the team has tried to make decisions by taking
into consideration both airline input and the best interests of
the traveling public in terms of level of service.
SENATOR PEARCE noted that the Terminal Redevelopment Project
currently has both language and budget problems. She suggested
that both be fixed.
Number 065
REPRESENTATIVE COWDERY noted that the final design is not
scheduled to be done until July 2003; however, he wondered if it
was still true that construction will not be started this year if
the additional $25 million in bonds is not authorized.
MR. KETNER explained that, in terms of schedule, the Terminal "C"
replacement is the most challenging part of the construction. He
described a fairly tight design time line in getting a bid
package out to begin the two phases of the project: first,
foundations and steel, followed by the balance of the terminal.
He indicated that one of the most important objectives, from the
airport's point of view, is to achieve a replacement of Terminal
"C" by tourist season of 2002. If it is not completed by April
of 2002, he cautioned, the next point of opportunity to benefit
from that improvement would be the next tourist season.
CHAIRMAN WARD asked, "Is that a yes or a no?"
MR. KETNER indicated that the policy has been to work with the
airlines to address any significant changes in scope, and the
time line to do that would jeopardize the design and construction
time lines, which are already fairly aggressive.
CHAIRMAN WARD said, "So, if there was a 'blip' at this point ...
the answer would be that it would not continue on. Is that
correct?"
MR. KETNER stated:
I think a fair way of answering that is that there is a
chance that the time it would take to redefine the
changes would slow down the design process to where we
may be pushed to 2003 for Terminal "C" replacement or
to have that be the next benefit year in terms of a
peak period for tourism.
Number 098
REPRESENTATIVE COWDERY asked whether Terminal "C" was estimated
to cost about $60 million.
MR. KETNER said yes.
REPRESENTATIVE COWDERY noted that the demolition would be started
within a couple of months, and the contract replacement would be
let in January 2000. He said, "At the time that the contract to
Terminal 'C' was let, that money would be in place ... for that
contract, obviously. It would have to be in place."
MR. KETNER said that was correct.
REPRESENTATIVE COWDERY continued, "So, there would be other
things that probably cost more than what we are talking about,
the $25 million, that would be considered ongoing projects, that
the contracts probably wouldn't be let at that time, or it might
be let at a later date. Is that right?"
MR. KETNER said he believed that was so. He added:
I think it's a fair statement to say that we're at the
end of schematic design right now, and we have defined
this piece of work as the biggest challenge for our
design team. To get a package out on the street by
[the] end of 1999 for foundations and steel is a
significant challenge from a design perspective.
That's our critical path right now. So, telling our
design team what it is they're designing, this is where
the decision point has to come in order to meet this
time line for construction.
MR. KETNER noted that if the design time line is moved, other
lines will have to "slide out" as well.
REPRESENTATIVE COWDERY said, "It seems to me that this is a $230
million project, and, certainly, [we're] not going to let a $230
million contract in this year ... or next year. It'll be phased
into different phases."
MR. KETNER said that was correct.
Number 125
MR. EBERLE said if the legislature had concerns over the present
scope of the project and they were not going to get the $25
million requested, they would have to go back and redefine what
it is they are going to build, in terms of the new Concourse "C"
replacement. That would stop the project. He added:
If we have to carve $25 million out of this overall
project, we need to sit down with the airlines and
figure out what they can live without, what is going to
be the least disruptive to them. That process is going
to take time, and, as Don [Ketner] mentioned, the
design for Concourse "C" replacement is the critical
path.
MR. EBERLE pointed out that any disruption of the critical path
pushes out the end date. He added, "If we have to re-scope this
project and cut out additional aspects of the terminal, we need
to do that before we've gone ahead and designed it; otherwise,
we've thrown away all that money."
REPRESENTATIVE COWDERY clarified that the project would still
receive $25 million eventually through FAA at approximately $2.5
million per year.
MR. EBERLE said that was correct, but it would redefine what gets
built in what time line. He added, "And we can't do that
unilaterally. It was a package deal when the airlines voted on
it: air-side, landside and the terminal."
Number 151
REPRESENTATIVE HALCRO asked a question of Morton V. Plumb, Jr.,
Director, Anchorage International Airport, DOT/PF, who was online
from Anchorage. He mentioned that he had asked Commissioner
Perkins [DOT/PF] last week about the airport's rumored expansion
into the Sand Lake Gravel Pit area, and that he was assured the
committee would be "kept in the loop" should discussions
progress. Representative Halcro asked Mr. Plumb if there have
been any discussions with private developers trying to pitch the
airport expansion into the Sand Lake Gravel Pit area within the
last four to five months.
Number 161
MORTON V. PLUMB, JR., Director, Anchorage International Airport,
Department of Transportation and Public Facilities, answered via
teleconference from Anchorage:
The short answer to that is "yes." We have continued
to have people that have done some exploratory work in
that area. We have not had anyone officially come to
the airport with an application or with an exact plan.
As you may be aware, we are going through our master
plan update at this time. We are probably about 30 to
35 percent through that. At the end of that time, that
will give us a much better idea of future land
requirements and the time that will be needed.
REPRESENTATIVE HALCRO asked whether these private developers were
the same individuals that approached him one year ago.
MR. PLUMB said yes, but that he was uncertain if they now
represent two different groups or are still joined together.
REPRESENTATIVE HALCRO asked, on behalf of himself and Senator
Pearce, to be kept updated as far as these discussions and
activities. He stressed that it was very important to their
district, especially with some emerging subdivisions right in the
path of expansion. He said, "I know, at one point in time, the
developer had asked you for 'confidentiality,' but ... the fact
is that this is a public process. The airport is a public
facility."
MR. PLUMB recalled that some of these individuals actually went
to some of the community council meetings at Sand Lake. He
thought the only thing that had been requested from them in the
way of proprietary information was their layout or business plan,
but he felt the intent was pretty well known.
Number 190
CHAIRMAN WARD recommended also attending community council
[meetings] in Bayshore, Klatt and Ocean View, where [residents]
seem to have some concerns about flight patterns.
MR. PLUMB indicated that he would be happy to do so; in fact, he
lives in that area.
Number 201
CHAIRMAN WARD asked Mr. Eberle to be in contact with Chair
Masek's office and his own office so that some type of a plan can
be formulated. He concluded by stating:
I think that as we all voted for Representative
Cowdery's bill last year to do this, it was the
intention to do one thing, and, if the majority of the
legislature didn't understand what they were voting on,
then we need to reeducate everyone to see if we can all
get back on the same sheet of music, and in a timely
manner.
ADJOURNMENT
Number 210
There being no further business before the committees, the joint
meeting of the Senate and House Transportation Standing
Committees was adjourned at 2:42 p.m.
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