Legislature(2009 - 2010)CAPITOL 17
02/05/2009 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| Overview of the Transporation Aspects of the Federal Stimulus Package | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
February 5, 2009
1:03 p.m.
MEMBERS PRESENT
Representative Peggy Wilson, Chair
Representative Craig Johnson, Vice Chair
Representative Kyle Johansen
Representative Cathy Engstrom Munoz
Representative Mike Doogan
Representative Max Gruenberg
MEMBERS ABSENT
Representative John Harris
COMMITTEE CALENDAR
OVERVIEW: DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES
(DOT&PF) - TRANSPORTATION ASPECTS OF THE FEDERAL STIMULUS
PACKAGE
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
FRANK RICHARDS, Deputy Commissioner
Office of the Commissioner
Department of Transportation & Public Facilities (DOT/PF)
Juneau, Alaska
POSITION STATEMENT: Answered questions during a PowerPoint
presentation on the Transportation Aspects of the Federal
Stimulus Package.
RON KING
Capital Programs
Division of Program Development
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the discussion of
the Transportation Aspects of the Federal Stimulus Package.
JEFF OTTESEN, Director
Division of Program Development
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions during the
discussion of the Transportation Aspects of the Federal Stimulus
Package.
CHRISTINE KLEIN, Deputy Commissioner of Aviation
Office of the Commissioner
Department of Transportation & Public Facilities (DOT&PF)
POSITION STATEMENT: Answered questions during the discussion of
the Transportation Aspects of the Federal Stimulus Package.
ACTION NARRATIVE
1:03:37 PM
CHAIR PEGGY WILSON called the House Transportation Standing
Committee meeting to order at 1:03 p.m. Representatives
Johansen, Doogan, Johnson, and Wilson were present at the call
to order. Representatives Munoz and Gruenberg arrived as the
meeting was in progress.
^OVERVIEW OF THE TRANSPORATION ASPECTS OF THE FEDERAL STIMULUS
PACKAGE
1:03:56 PM
Chair Wilson announced that the only order of business would be
a presentation and overview of the Transportation Aspects of the
Federal Stimulus Package by Department of Transportation &
Public Facilities (DOT&PF).
1:05:14 PM
FRANK RICHARDS, Deputy Commissioner, Office of the Commissioner,
Department of Transportation & Public Facilities (DOT/PF), began
his presentation by informing members that the Congress is
appropriating approximately a year's worth of transportation
spending in approximately two weeks. He outlined funding
levels, and noted differences in the U.S. House of
Representatives and the U.S. Senate versions of the federal
economic stimulus package in HR 1. He mentioned that the
Department of Transportation & Public Facilities (DOT&PF) has
been impacted due to the time zone differences between Alaska
and Washington D.C. area. He explained that the Congress has
imposed stringent rules that the DOT&PF must adhere to for use
of the economic stimulus package, as well as the significant
challenges the department will have to "get the projects out on
the street" in a timely fashion. He offered that he will also
cover the selection process, and some specific fund sources that
the Congress has designated that are outside of the DOT&PF.
MR. RICHARDS offered that his presentation outlines impacts for
their consultants, who assist the DOT&PF in developing the
projects. He offered that the goal of the economic stimulus
funding is to revitalize the economy and put Alaskans to work on
the backlog of transportation infrastructure. He emphasized
that some projects have not been completed due to the reductions
in federal funding over the past few years in the Federal
Highway Administration (FWHA), as well as inflationary impacts
on the cost of construction materials. He stressed the growing
deferred maintenance backlog across the modes that affect the
highway, aviation, ports, and harbor programs as well as
facilities. He opined that all the DOT&PF maintenance has
suffered due to funding problems. He opined that the additional
monies in the federal economic stimulus funding will be a great
help to Alaska, and could relieve some of the DOT&PF's backlogs.
He mentioned the DOT&PF previously has identified infrastructure
needed for a proposed gasline to the legislature.
1:09:06 PM
MR. RICHARDS offered to explain the "rules of the road." He
explained that the federal economic stimulus package funds will
come through the existing formula programs. The Congress will
not bypass the existing modal transportation programs that are
in place under the federal highway, transit, or aviation
administrations, he highlighted. He reiterated that the
"stimulus package" will follow existing formulas in place and
will flow to the state DOT&PF's for distribution. He stressed
that the DOT&PF must follow all federal regulations and
restrictions on the use of the funds. That means the
development of those funds must also be done in compliance with
the federal processes. He further stressed that Congress did
not relax rules such as the National Environmental Policy Act of
1969 (NEPA) process for environmental concerns, the Uniform
Process for Right-of-Way purchases, or the wetlands permit
process. Therefore, the DOT&PF must comply with all the federal
laws, which poses challenges for the department, he related.
Lastly, he stressed that the federal legislation emphasizes that
the "stimulus" monies are to be spent in areas that have been
deemed economically distressed regions.
1:10:53 PM
MR. RICHARDS, in response to Chair Wilson, answered that the
Congress did not want to relax any rules since "fast action" has
been deemed necessary. Thus, Congressional leadership wanted to
avoid any debate that might have "tied up the bill."
1:11:30 PM
MR. RICHARDS, in response to Representative Johnson, explained
that if the project is a Federal Highways Administration (FHWA)
project, the state already adheres to the federal guidelines
with respect to the environmental, right-of-way (ROW), and
design processes. Thus, the DOT&PF cannot select a state
project that has not adhered to the process. Therefore, a
limited number of projects are available for the federal
economic "stimulus funding." In further response to
Representative Johnson, Mr. Richards agreed that the projects
funded from the general fund (GF) are also excluded from the
economic stimulus funding. He pointed out that one benefit of
using the GF funding is that many of the processes can be done
in parallel tracks, such as preparing the environmental document
at the same time that the design work is being done. He also
mentioned that with GF projects, the DOT&PF can purchase ROW as
it performs the design work. Thus, the projects can quickly
advance through the development stages up to the point of
construction. However, under the federal process the project
must proceed in a specific sequence consisting of environmental,
design, and ROW components prior to construction. Thus, the
projects currently under consideration are those projects that
have already been subject to the State Transportation
Improvement Program (STIP) process. Mr. Richards identified the
STIP as part of the process that the DOT&PF uses to seek
legislative authority to proceed through the design steps.
REPRESENTATIVE JOHNSON asked whether any projects that the SOA
is currently funding could be funded by the federal stimulus
funds instead.
MR. RICHARDS answered no, that each governor must certify that
he/she will not remove state monies and insert federal funds
instead.
1:15:26 PM
MR. RICHARDS, in response to Representative Johnson, explained
that the Congress, in the House version, HR 1, encourages
projects to be selected for economically distressed areas. He
further explained that under the United States (US) code,
economically distressed areas are defined as those areas with an
unemployment rate that is one percentage point higher than the
national average. In Alaska, all areas of Alaska meet this
definition except for the North Slope Borough, the Fairbanks
North Star Borough, the Municipality of Anchorage, the City and
Borough of Juneau, the City of Sitka, and the Ketchikan Gateway
Borough.
MR. RICHARDS referred to a slide on page 3 of the handout,
titled "DOL Unemployment Data", which he said lists the areas of
the state along with current unemployment rates in each area.
He read some unemployment rates as of December 2008, such as the
Yukon-Koyukuk at 16.2 percent, the Aleutians East at 20.8
percent, and the Prince of Wales-Outer Ketchikan at 16.5
percent. He related that the slide represents emphasis areas,
yet the proposed legislation does not prescribe that a defined
amount of money must be spent in the economically depressed
regions of the state.
1:16:35 PM
MR. RICHARDS, in response to Representative Doogan, offered that
the language in the federal bill acts as essentially intent
language from the Congress to the state DOT&PF's that instruct
them to identify projects that meet the goal of the economic
stimulus package, which is to create jobs in the economically
distressed areas nationwide. Thus, the DOT&PF's goal in Alaska
is to identify projects which will create jobs in areas with the
highest level of unemployment in the state.
1:17:05 PM
MR. RICHARDS referred to a map titled "Alaska Construction &
Transit Projects Stimulus & STIP 2009". He explained that 60
percent of the projects listed on the map fall within the
federal definition of economically distressed areas. Thus, many
projects are statewide rural projects. He identified mainline
highway projects include projects on the Parks, Richardson, and
Alaska Highways. However, he specified that some projects fall
in the urban areas or Southeast Alaska. Other projects fall
within the North Slope outside of the economically distressed
areas. He reiterated that Congress did not give the DOT&PF a
defined figure that it must meet. In further response to
Representative Doogan, Mr. Richards explained that his
presentation will also cover funding in both the House and
Senate versions of the federal bill, as well as specific
statewide projects that the DOT&PF has identified.
1:18:32 PM
REPRESENTATIVE MUNOZ related her understanding that the Lynn
Canal Highway project is currently under litigation. She
inquired as to whether that project is eligible for the economic
stimulus funding.
MR. RICHARDS responded that the DOT&PF is awaiting a ruling in
the lawsuit. He explained that the legislature has provided
approximately $110 million from federal and state funding
sources to construct the first portion of the road. He pointed
out that state funds can not be replaced with new federal funds
for the project. He indicated that a portion of the project
that still needs work is the road work north of Slate Cove.
MR. RICHARDS referred to slide 6, titled "Use or Lose
Provision". Under HR 1, the Congress demands fast use of funds,
such that 50 percent of funds must be used within 90 days or
funding will be redirected to other states, he stated. He
pointed out that the DOT&PF has identified more projects in
Alaska than the projected designated funding. Additionally, it
is possible that Alaska may be able to use other states' monies,
he surmised.
1:21:05 PM
MR. RICHARDS, in response to Representative Johnson, answered
that the House version of HR 1 states that economic stimulus
funds must be obligated within 90 days to meet the "use or lose"
provision. He reiterated that the DOT&PF must enter into a
contract that it has followed all the processes up to the point
of actually letting a bid award with a contractor. At that
point, the FHWA can certify that Alaska has met Congresses'
guidelines. He mentioned that the DOT&PF's goal is to award
bids for the 2009 construction season.
REPRESENTATIVE JOHNSON asked if it would be realistic to
complete the design and award a bid within 90 days.
MR. RICHARDS answered that the DOT&PF has projects that are
designed and the department is actively working on projects to
ready them to the point of letting the contract to prospective
bidders. He related that the object is ensuring that the
"bureaucracy background" is completed so the DOT&PF can advise
the FWHA that it has met the requirements. He explained that
the DOT&PF will complete a STIP amendment, which he anticipated
would be released in a few days. He highlighted that the STIP
amendment process takes 90 days so the DOT&PF has competing
efforts for its staff to accomplish the tasks. He mentioned
that the DOT&PF's staff is working many hours to accomplish the
necessary tasks to enable the state to use the economic stimulus
funds.
1:23:21 PM
CHAIR WILSON related her understanding that to meet eligibility,
that the DOT&PF must have undergone the environmental assessment
process, obtained the necessary permits, and designed any of the
projects.
MR. RICHARDS agreed with Chair Wilson. Additionally, he related
that the right-of-way process to ensure land is owned by the SOA
must also be completed. He highlighted that the projects must
be at the stage of construction. In further response to Chair
Wilson, Mr. Richards acknowledged that the projects would not
have gone out for bid award since the DOT&PF must have the
funding for the projects. He pointed out that the Senate
version of HR 1 has different timelines than the House version
of the bill, which he offered to review.
1:25:16 PM
MR. RICHARDS, in response to Representative Johnson, answered
that the DOT&PF must obligate at least 50 percent of the funding
allocated to the state within 90 days. Additionally, the
funding not used in the first 90 days, must be obligated by
2010.
1:25:50 PM
REPRESENTATIVE JOHANSEN recalled the legislature funded a large
Capital Improvement Projects and that a General Obligation (GO)
bond proposal also passed last year. He asked what will happen
to capital budget project timelines given the limited number of
DOT&PF staff and the huge commitment required to handle the
federal stimulus funding projects.
MR. RICHARDS answered that the DOT&PF is working with the
individual design squads, and the consulting community to
determine how to use outside resources to advance the projects
"already in the pipeline." The DOT&PF has examined the General
Obligation bond package and the effort needed to reach the point
of construction. He surmised that most of the GO Bond projects
are in the design phase for the next 12 to 18 months. He again
noted that the DOT&PF is in the process of compiling bid
documents that meet state standards on those projects so they
can be put "out on the street." He related that the DOT&PF has
been holding discussions to ascertain the workflow for the
consulting community and contractors, and how to work together
to achieve efficiencies to use the federal funding. He said
that the DOT&PF staff is energized and "rising to the occasion."
1:28:38 PM
REPRESENTATIVE JOHANSEN inquired as to whether the construction
industry is "stretched out pretty far now." He surmised that
the DOT&PF assesses the construction industry levels.
MR. RICHARDS recalled that the DOT&PF has held conversations,
even in advance of the proposal for federal economic stimulus
funding, with construction companies in Southeast and Interior
Alaska. He related that the proposed stimulus funding projects
have good geographic distribution stretching from Prudhoe Bay to
Ketchikan. He said that due to the geographical distribution of
projects, contractors have the capabilities of performing the
work. He mentioned that the DOT&PF has noticed more competition
on recent bids for facilities. He highlighted that Alaska has
seen a downturn in some industries, but the federal spending
will help to "ramp up" the economy and provide more job
opportunities.
1:31:10 PM
CHAIR WILSON surmised that what was not stated is that the
DOT&PF will need to import contractors from the lower-48.
MR. RICHARDS answered that the DOT&PF will not preclude anyone
from bidding, but the federal economic stimulus funding is a
nationwide package that will affect contractors across the
nation. He mentioned that price of asphalt last summer and the
high cost of oil that adversely impacted the refining process of
asphalt. Since more effort went into refining fuel than for
asphalt use, the prices of asphalt stayed high, he surmised. He
highlighted that the Flint Hills Refinery desires better
economics. He expressed concern whether enough asphalt will be
available.
1:32:40 PM
MR. RICHARDS, in response to Representative Doogan, referred
back to slide 7, titled "Maintenance of Effort". He offered his
belief that Governor Palin is in favor of federal funding to
provide for transportation needs that have a benefit for the
nation. In this case, the Dalton Highway, and portions of the
Alaska Highway are projects that can help in preparation of
Alaska gasline.
CHAIR WILSON, in response to Representative Doogan, recalled
Governor Palin said that she is overall against the federal
stimulus package, but if other states are taking advantage of
the funding, that she would also do so.
1:34:28 PM
REPRESENTATIVE DOOGAN inquired as to whether Mr. Richards is
confident Governor Palin will take the necessary steps to
certify the funding in order for the state to qualify.
MR. RICHARDS responded that he was instructed by the governor to
identify the challenges that the DOT&PF has with respect to the
conditions in HR 1. He said that the provision for
certification has recently come up and that he has not had a
direct conversation with the governor about it. He highlighted
that the DOT&PF is tracking the legislation and that new
requirements are added on an hourly basis.
1:35:15 PM
REPRESENTATIVE JOHNSON inquired as to whether some stimulus
funds could be appropriated directly to communities.
MR. RICHARDS stated that he will address that during this
presentation.
1:36:09 PM
MR. RICHARDS reiterated that the certification referred to slide
7, titled "Maintenance of Effort". He explained that governors
are required to certify that the state will maintain state
funding scheduled for highways, which must extend to September
2010. He related that many other states have state funded
programs and rely on gasoline tax revenue to provide funds for
their highway programs. However, the downturn in the economy
and fewer people driving has resulted in less income for many
states. He opined that less gas tax collected places some
states in a difficult position. Some states are voicing their
concern about the time constraints in the proposed bill, since
non-certification will trigger a loss of funds entirely.
1:37:22 PM
MR. RICHARDS referred to slide 8, titled "Big Picture", pointing
out that out of an $829 billion stimulus total, $45 billion is
scheduled for transportation. He said he guesses that Alaska
would receive about $500 million for highways, aviation, and
transit programs.
MR. RICHARDS referred to slide 9, titled "How Much Funding", and
stated that HR 1, the House version, is much better for Alaska.
He pointed out that in terms of highway and aviation funding
projects, the state would receive substantially more funding.
He pointed out that set asides exist for Anchorage Metropolitan
Area Transportation Solutions (AMATS), and the Fairbanks
Metropolitan Transportation System (FMATS), which receive about
10 percent for both communities in total. He offered that
funding is for use on roads in those communities. He related
that funding for enhancements is set at $7.4 million for
sidewalks, bike paths, and waysides.
1:38:58 PM
MR. RICHARDS, in response to Representative Gruenberg, offered
to provide the committee with a legal definition of
enhancements.
1:39:22 PM
MR. RICHARDS continued by stating that in the House version of
HR 1, that the state's share for highways and bridge assets is
estimated at $187 million.
MR. RICHARDS, in response to Representative Gruenberg, stated
that "CMAQ" refers to congestion mitigation and air quality. He
related that the House version does not contain a specific
amount, but the Senate version is set at $79.6 million. In
further response to Representative Gruenberg, Mr. Richards
explained that CMAQ identifies when portions of the state do not
meet air quality designations.
RON KING, Capital Programs, Division of Program Development,
Department of Transportation & Public Facilities (DOT&PF),
answered from the audience that Anchorage's air quality is fine,
but that Juneau and Fairbanks have some issues.
1:41:02 PM
MR. RICHARDS explained that the issue that Juneau has is in the
Mendenhall Valley from wood smoke, as is the problem in
Fairbanks. He related hat HR 1 would provide $74 million for
transit, with AMATS designated to receive $40 million for
transit opportunities. He mentioned a subset for $9.5 million
for vehicles such as buses and commuter vans, and about $25.8
million for ferries and trains. He reiterated the funding time
constraints.
MR. RICHARDS highlighted the funding in the Senate version of HR
1. He related that the Senate version reduces the funding for
bridges to $131.5 million, of that $23 million for AMATS, and
$5.1 million for FMATS, zero funding for enhancements, and $5.2
million for CMAQ, with approximately $80 million for state and
non-MPO roads.
1:43:07 PM
MR. RICHARDS, in response to Chair Wilson, offered that to
reduce air quality impacts from wood smoke, consumers in
Fairbanks could use natural gas from the proposed gas pipeline.
1:44:02 PM
JEFF OTTESEN, Director, Division of Program Development,
Department of Transportation & Public Facilities (DOT&PF),
answered that the backlog for CMAQ projects is smaller. Thus,
the DOT&PF will need to "scramble" to find projects, he stated.
He related that Fairbanks would make the decision on projects
under federal law. He offered that the DOT&PF would discuss the
matter with its air quality partner in Department of
Environmental Conservation (DEC) to identify projects. He
highlighted that Fairbanks and Juneau were just designated last
fall as non-attainment areas, and it takes about two years for
DEC to perform its analysis and to determine strategies to use
the CMAQ funds. He noted that the state is in the early stages
of its planning process. In response to Representative Johnson,
Mr. Ottesen answered that AMATS and FMATS will only have 75 days
to use any federal stimulus funding or "lose it."
MR. RICHARDS, in response to Representative Johnson, highlighted
that the HR 1 provides an emphasis for economically distressed
areas, but does not designate or set aside specific funds for
those areas. However, AMATS and FMATS funding is designated, he
related.
REPRESENTATIVE JOHNSON inquired as to the effect on state roads
due to the AMATS and FMATS share.
MR. RICHARDS answered that the universe of projects that are
available to meet the timeline is relatively small. He related
any projects that are ready in Anchorage and Fairbanks could be
funded. He discussed some projects on the Glenn Highway,
including rut repair from mile 34-42; and some projects on the
Richardson Highway in the Fairbanks North Star Borough. He
explained that the decision making process is based on the stage
of the project development.
1:49:20 PM
REPRESENTATIVE JOHNSON inquired as to whether any project in
Anchorage and Fairbanks that are bid ready, but are not on the
list.
MR. RICHARDS answered by explaining funding for some Anchorage
road projects. He offered that Johns Road has not been designed
yet. He related that if AMATS is not able to meet its 75-day
timeline, the DOT&PF could proceed with projects such as an
overlay on Minnesota Drive to address the "rutting challenges."
He offered that DOT&PF would then "backfill" the AMATS for
development of the John's road project.
REPRESENTATIVE JOHNSON inquired as to whether "backfill" would
be considered moving funding from a state project and
supplanting funding with the economic stimulus package funding.
He asked for clarification between "backfill" and supplanting
funding.
MR. RICHARDS answered that the "rut repair" for Minnesota Drive
in Anchorage could be rapidly developed since the scope of the
project is considered "mill and overlay" work. He explained
that the project would not require an environmental assessment
and would not "disturb" any ground. Instead, the rutted asphalt
will be skimmed off and new asphalt would be applied to the road
surface.
1:51:53 PM
MR. OTTESEN interjected that the federal rules allow the DOT&PF
to move a STIP project ahead and use economic stimulus funding
and move stimulus funding back to a STIP project so long as long
as it happens in FY 09. Thus, the specific timeframe under
discussion is the May to August 2009 period, which is a short-
term window. He opined that in Anchorage the DOT&PF proposes to
do that just so that Anchorage "does not lose its stimulus
dollars."
MR. OTTESEN opined that the only available projects that he is
aware of in Anchorage are more "mill and paves." He added that
the way the bill is structured, the amount of money given to the
Metropolitan Planning Organizations (MPOs) is defined in law.
Thus, if the state attempts to provide more economic stimulus
funding to the MPOS, then the DOT&PF does a disservice to the
remainder of the state. He further opined that HR 1 is very
clear that the funding is to be shared between the state, the
MPOs, and non-MPO communities with an emphasis on economically
distressed areas. He highlighted that the DOT&PF's job is to
balance those needs in the context of the language in the bill.
REPRESENTATIVE JOHNSON asked if projects in Wrangell, Ketchikan
or Juneau that would fit that criteria. He further inquired as
to whether the department is "taking in the whole picture" to
review projects in terms of how quickly the projects can happen
that will also meet short and long term needs of these
communities. He suggested that Mr. Ottesen could provide this
information at a later date.
1:54:11 PM
CHAIR WILSON related her understanding that the DOT&PF has
already discussed the economic stimulus funding with AMATS.
Since AMATS is not certain it can find projects that fit their
more limited criteria, the DOT&PF would use the AMATS funding to
fund projects so the funding is not lost.
MR. RICHARDS agreed. He remarked that the DOT&PF has discussed
with AMATS and FMATS to determine how best to capture the
funding to put Alaskans to work.
CHAIR WILSON related her understanding that more projects exist
than the state anticipates receiving in the federal economic
stimulus funding.
MR. RICHARD answered yes, that the goal is to identify current
projects that meet the challenges the Congress imposed. Thus,
the total possible projects identified represent more than the
anticipated funding in the event that a problem arises and a
selected project cannot be completed. Additionally, the DOT&PF
will be ready to move forward on other projects in the event
that other states cannot use their federal economic stimulus
funding.
1:56:08 PM
REPRESENTATIVE JOHANSEN asked whether his district has any
additional projects that would qualify, other than those listed
on the handout titled "Alaska Construction & Transit Projects
Stimulus & STIP 2009". He suggested that the DOT&PF could
provide him with the information later.
1:57:13 PM
REPRESENTATIVE GRUENBERG inquired as to whether the DOT&PF needs
any changes to any state statutes in order to facilitate the
transfer of federal economic stimulus funding.
MR. RICHARDS answered that he is not aware of any additional
authority. He explained that the DOT&PF will present to the
legislature a supplemental appropriations bill that will
identify that the department is seeking legislative authority to
receive funds for these projects. He stressed that the funding
is 100 percent federal funding. In further response to
Representative Gruenberg, Mr. Richards answered that the DOT&PF
will not require any other statutory changes.
REPRESENTATIVE MUNOZ related her understanding that the Federal
Highway Administration (FHWA) trust fund is bankrupt. She
expressed concern that future STIP projects might be affected.
MR. OTTESEN answered that the economic stimulus package will be
funded from the federal general fund and not from the FHWA. He
shared her concern about the status of the FHWA trust fund. He
pointed out that the DOT&PF is writing a STIP amendment for the
stimulus bill that covers 2009, followed by a new STIP to cover
2010 to 2013. He said, "We're going to write that STIP not
really knowing or having a very fuzzy crystal ball as to what
that future funding is, but I will say this. I don't think
Congress will let this program go into the dustbin of history.
It's just really too important to the nation's economic health."
REPRESENTATIVE MUNOZ asked for a definition of stimulus fast
award and stimulus slow award.
MR. RICHARDS answered that the fast award relate to the projects
that must be obligated in 90 days and the slow award relate to
projects that must be obligated in 18 months. He referred back
to the slide titled, "How Much Funding" and to the columns
labeled House H.R. 1 and Senate S.1. He also referred to the
bottom of the slide to the line "Use or Lose Rule." He pointed
out the differences between the bill versions such that the
House version of HR 1 has a limit of 90 days for fast awards and
18 months for slow awards, whereas the Senate version has a
limit of 6 months for fast awards and 12 months for slow awards.
2:01:34 PM
MR. RICHARDS, in response to Representative Johansen, explained
that funding would also be eligible for ferries and trains. He
related that the STIP includes projects that could absorb the
entire $25.8 million included in the House version. In further
response to Representative Johansen, Mr. Richards explained that
some of the DOT&PF projects provide ancillary benefits to the
Alaska Railroad Corporation (ARRC) such as at-grade road
crossings. He remarked that the DOT&PF uses FHWA funds to
provide safety improvements. However, he said he was not aware
of the ARRC processes or programs. He recalled testimony given
to the House Finance Committee referred to maintenance
agreements for road and rail crossings.
MR. OTTESEN explained that the ARRC receives formula funding
from the Federal Transit Administration (FTA) as well as
earmarks. He opined that the FTA funds are included in the
DOT&PF's STIP based on a formula set by the Congress.
2:06:07 PM
MR. RICHARDS continued. He remarked that the proposed funding
for Aviation is set at $231 million in HR 1 and up to $84.7
million in the Senate version. He related that approximately 27
rural projects have been identified totaling about $271 million.
He explained that approximately 12 possible projects totaling
$105 million have been identified for the International Aviation
Program. He highlighted that the Senate version reduces the
overall program from $3 billion to $1.1 billion. He mentioned
that the DOT&PF monitors the federal bill on a daily basis. He
remarked that any aviation funding will go through the Federal
Aviation Administration (FAA), which will parcel out funds
through discretionary projects. Thus, the decisions to select
aviation projects to fund from federal economic stimulus funding
will be made by the local regional FAA office.
2:08:05 PM
MR. RICHARDS, in response to Representative Johnson, referred to
a map titled "Alaska Construction & Transit Projects Stimulus &
STIP 2009". He indicated the map identifies the "Stimulus Fast
Award" projects and "Stimulus Slow Award" projects. He surmised
that if the DOT&PF went from a 90 day to a 6-month provision,
that the department would likely capture projects listed in the
slow award. He highlighted that the senate version of the
federal bill requires that projects must be obligated in 12
months instead of 18 months. Thus, some projects that could be
accomplished in 16 to 18 months could not be completed in the
more limited timeframe. In further response to Representative
Johnson, Mr. Richards remarked that the DOT&PF's goal is to show
projects that met the most aggressive and conservative timelines
that the "Congress is throwing at us."
REPRESENTATIVE JOHANSEN asked whether the DOT&PF has a list of
FAA projects under consideration and whether the department made
formal recommendations to the FAA on projects.
2:10:07 PM
CHRISTINE KLEIN, Deputy Commissioner of Aviation, Office of the
Commissioner, Department of Transportation & Public Facilities
(DOT&PF), answered that her office has been working closely with
the FAA. She said she anticipates a minimum of $122 million in
fast track projects, with an additional amount for the
International Aviation Program totaling about $200 million. She
surmised that it is unlikely that the state would receive that
much funding. In the event the timeline is expanded further,
the DOT&PF would have nearly $400 million ready. She remarked
that "everybody is scurrying, the rules are changing." She
surmised many of the rules haven't yet been defined. Ms. Klein
stated that the DOT&PF's goal is to have the projects ready to
go, that staff is working round the clock to reach the
department's goal. She highlighted that projects are located in
every region, with most in rural areas. Ms. Klein mentioned
that the DOT&PF has a map that it has been using internally,
which she offered to provide to the committee in the next few
days, once the governor has signed off on the map.
2:12:26 PM
REPRESENTATIVE JOHANSEN said that he is primarily interested in
knowing which projects the DOT&PF is "pushing for" since the
legislature is not involved in prioritizing the aviation
projects. He inquired as to the status of several capital
improvement projects in his district.
MS. KLEIN explained that the FAA uses a review process similar
to the one that the FHWA use for its projects. She offered that
many of the aviation projects can take up to ten years to go
through that process. She related that most of the projects are
ones that have been through the planning process. She
reiterated that the FAA has more discretion in terms of the
types of projects such as runway safety areas, surface
maintenance. She opined that having FAA involvement is helpful
since it also gives the DOT&PF a greater range of eligible
projects.
2:14:36 PM
REPRESENTATIVE GRUENBERG mentioned that sometimes a federal
agency will look to state law to define a term. He inquired as
to whether the DOT&PF could keep in mind that the legislature
could adopt some definitions that might help make projects
eligible for the federal economic stimulus funding.
CHAIR WILSON highlighted that changing a definition in one area
might "wreck" a number of other areas.
2:16:23 PM
MR. RICHARDS referred to a slide titled "Steps Taken Already".
He stated that the DOT&PF has been proactive and has identified
a universe of eligible projects that can meet the federal
criteria. Further, the DOT&PF has prioritized the list and has
taken steps to amend the STIP number 18. Additionally, the
DOT&PF has authorized the work needed to get projects bid ready,
as well as that it has prepared a supplemental budget request,
he mentioned.
2:17:43 PM
REPRESENTATIVE GRUENBERG asked whether the department could seek
funding for the extra overhead.
MR. RICHARDS explained that the legislature has authorized
existing project funds to work for administrative costs. He
related that the DOT&PF has sufficient CIP funds to perform that
work, and hopes to work efficiently to do so.
2:18:34 PM
MR. RICHARDS referred to a slide titled "Further Steps Needed".
He said that the DOT&PF has completed designs, permits, and
other clearances for projects on the "fast list," or those
projects that would need to be obligated by April. He outlined
the steps that will be taken to meet the federal requirements
for the economic stimulus funding. He stated that public
comment will be taken on the STIP amendment number 18, to allow
time to submit the STIP to the FHWA as well as the FTA for final
approval. He highlighted that it is important to note that two
federal agencies are involved. He mentioned that the DOT&PF has
been consulting with the federal agencies, who are working
cooperatively with the department. He explained that the DOT&PF
will then be ready to enter into Federal Aid Agreements for
projects on the "fast list." He opined that the agreement,
which is the actual contract or obligation, will satisfy the
Congressional requirement. Finally, the DOT&PF will issue bid
advertisements for the projects on the "fast list."
2:19:38 PM
MR. RICHARDS referred to a slide titled "How Were Projects
Selected", and explained the process. He summarized that the
DOT&PF examined the eligibility of projects, the rapid timing
expected, reviewed projects in terms of the economically
distressed area criteria, and the mandatory set asides required
in the proposed federal bills. He highlighted that the proposed
economic stimulus package does not waive the requirements in law
for the STIP or the National Environmental Policy Act of 1969
(NEPA).
MR. RICHARDS referred to a slide titled "Stimulus Funds
Prerequisite" that shows the typical 10-year timeline for
projects and breaks down the sequence necessary for the
environmental, design, ROW, prior to the construction phases and
project completion. He highlighted that it is virtually
impossible for a new project to meet the stimulus timeline.
2:21:55 PM
MR. RICHARDS referred to a slide titled "Criteria to
Prioritize". He related that the DOT&PF examined the mandatory
set-asides, the governor's prioritization to the Congress with
respect to the projects need in terms of the natural gas
pipeline readiness.
2:22:16 PM
MR. RICHARDS, in response to Chair Wilson, clarified that
mandatory set asides refer to AMATS and FMATS. He added that
the DOT&PF examined projects that were developed for improving
highway safety, examined the economic distress criterion. He
offered that the DOT&PF also looked at how it could leverage
other dollars, with an emphasis on creating jobs for the 2009
construction season.
MR. RICHARDS referred to a slide titled "Fairbanks and
Anchorage". He stated that the two MPOs, the AMATS and FMATS,
will select projects within their jurisdictions. He related
that DOT&PF works cooperatively with the MPOs. He offered that
the same rules apply to the MPOs and the projects are subject to
a 75 day obligation period instead of 90 days. He related that
the MPOs must go through a Transportation Improvement Plan (TIP)
that demonstrates the projects will be going into the
construction phase, as well. He said that $72 million is sub-
allocated to the two MPOs in HR 1.
2:23:47 PM
MR. RICHARDS referred to a slide titled "Why did DOT look to
Existing Projects." He reiterated that projects have already
been started, must meet the federal eligibility rules, and many
of the necessary steps have already been taken. He surmised
that the DOT&PF projects can be obligated in 90 days, and a
limited amount of them qualify for the federal economic stimulus
funding. He pointed out that the existing projects in the STIP
also have strong community support.
2:24:16 PM
MR. RICHARDS referred to a slide titled "Summary of Work
Selected". He summarized that the DOT&PF anticipates that the
federal economic stimulus funding will include: 272 center line
miles of roads resurfaced, 10 bridges replaced or repaired,
partially fund 2 new ferries, will allow ferry rehabilitation
and 2 new terminals.
MR. RICHARDS, in response to Representative Johnson explained
that the list furnished to members list two bridges in Juneau,
consisting of one leading to the Silverbow Basin and the other
in Mendenhall Valley. He also mentioned that there are two off-
system bridges in the Matanuska Susitna Borough on the list. He
related that these bridges were all developed under federal
processes.
2:25:47 PM
MR. RICHARDS stated that some safety projects will include
improving lighting, and installing roundabouts. He noted
improved transit projects will add passing lanes, and some buses
and vans will be provided for approximately eight communities
and improvements will be made to two international airports and
up to 18 rural airports.
2:26:10 PM
MR. RICHARDS, in response to Representative Johansen, agreed
that the projects for the 272 center miles fit into the category
of "resurfacing." He highlighted that while the timelines on
the resurfacing projects are short, that the specific type of
resurfacing does not tend to employ a lot of people as compared
to the number of jobs for constructing a new project. In
further response to Representative Johansen, Mr. Richards
explained that the 272 center line miles does include some road
miles for embankment work and laying new pavement such as along
the Parks Highway in Southcentral Alaska. He noted that the
Parks Highway project has already been developed, and that the
environmental impact statement, ROW, and design work has already
been completed over a three to four year time period. In
response to Chair Wilson, Mr. Richards clarified that all of the
projects are listed on the map titled "Alaska Construction &
Transit Projects Stimulus & STIP 2009".
2:29:21 PM
REPRESENTATIVE DOOGAN related his understanding that about $175
million in projects along three sections of the Dalton Highway
were proposed for the economic stimulus funding.
MR. RICHARDS agreed that the governor did send a letter to the
Congress to identify her priorities along the Dalton Highway,
Alaska Highway projects, and a Parks Highway project.
Additionally, she identified work on the Kodiak Launch Facility.
He remarked that those projects are included on the "fast list"
portion of the map.
2:30:45 PM
MR. RICHARDS clarified that the Alaska Highway is the eastern
border with Canada and runs into Delta Junction, sometimes
referred to as the Alcan Highway.
2:30:58 PM
MR. RICHARDS referred to a slide titled "Legislature's Role."
All federal funds, including most of the funds for the AMATS and
FMATS must be appropriated by the legislature. He stated that
the DOT&PF is currently working with the Office of Management &
Budget (OMB) on an appropriations bill. He mentioned that the
DOT&PF has an advantage since it is familiar with the federal
funding processes while some other states must determine what
authority they have in order to access the economic stimulus
funds.
2:31:41 PM
MR. RICHARDS, in response to Representative Doogan, answered
that the work identified in the slide titled "Summary of Work
Selected" corresponds to the list of projects on the map titled
"Alaska Construction & Transit Projects Stimulus & STIP 2009"
and is inclusive of the projects on map. In further response to
Representative Doogan, Mr. Richards explained that the
resurfacing roads category on the summary slide is a broad
category that lumps some rebuilding and repaving projects.
2:33:43 PM
MR. RICHARDS, in response to Representative Johnson, reiterated
that the DOT&PF has more projects ready than it anticipates will
be funded. He agreed that if projects currently contained in
the STIP are built more quickly due to the economic stimulus
funding that will also free up funding so that other projects
contained in the STIP will proceed through the queue more
quickly to construction.
REPRESENTATIVE JOHNSON inquired as to whether resurfacing roads
is the best use of the economic stimulus funding as opposed to
some other projects.
MR. RICHARDS explained that the DOT&PF grappled with the
criteria to identify which projects should proceed He agreed
that safety is paramount to everyone. He related that the
legislature appropriated general fund monies to address portions
of the Glenn Highway. The DOT&PF is augmenting that funding
with economic stimulus funding to complete additional portions
of the Glenn Highway since Alaskan drivers routinely complain
about its condition. In further response to Representative
Johnson, Mr. Richards responded that the DOT&PF commissioner and
the governor have not specifically intervened to request a
priority for the Glenn Highway projects.
CHAIR WILSON related her understanding that the DOT&PF is
attempting to be prepared in case other states might not be able
to use their funding in a timely basis.
MR. RICHARDS agreed.
2:37:29 PM
REPRESENTATIVE JOHANSEN inquired as to whether the DOT&PF
narrowed down the list and if the committee could obtain a copy
of all the projects that qualify.
MR. RICHARDS offered to provide a list of the STIP projects that
the department has had "in the pipeline." In further response
to Representative Johansen, Mr. Richards reiterated that the
projects he is referring to are projects that have been through
the federal process. The projects have previously been in the
STIP and have received legislative authority to advance to this
stage.
2:39:21 PM
REPRESENTATIVE JOHANSEN asked for clarification on the need for
excess appropriation in order to potentially capture extra
economic stimulus funds from other states. He related his
understanding that it gives the DOT&PF more "wiggle room" if
additional funding becomes available. He inquired as to whether
the excess authority provides the DOT&PF with more flexibility.
MR. OTTESEN responded that if the DOT&PF's authority exactly
matched the economic stimulus funding, that instances in which a
project was slowed by a federal permit requirement or ROW
lawsuit, the state would lose the dollars. He highlighted that
the federal program requires that the DOT&PF must have the
ability to move from project "A" to project "B" to capture those
dollars in within a fiscal year. He stressed that the DOT&PF
needs to have the flexibility. He acknowledged that it "can be
a sore point when a project slows down." He remarked that
projects are slowed down due for external reasons not under the
department's control. He pointed out that many agencies have
governance over our projects.
REPRESENTATIVE JOHANSEN inquired as to whether the DOT&PF has
enough excess appropriation for the economic stimulus package
proportional to the stimulus or if it will need more authority.
MR. OTTESEN explained that the DOT&PF is analyzing the list of
proposed projects for the economic stimulus package against the
current legislative appropriations. He emphasized that in some
cases the projects have already been submitted in the current
CIP. In other instances, the DOT&PF may need additional
appropriations since project cost has risen. Therefore, the
appropriation request will be a combination of projects that do
not need any appropriation, some that might need appropriation
to cover the shortfall, and a third class of projects that need
legislative appropriation. He estimated that the DOT&PF request
for excess appropriation includes about 30 percent more. He
indicated that the DOT&PF is basing its decision on the belief
that some states will have a hard time meeting the 90-day
deadline. The excess appropriation will help the state have
more leverage, he surmised.
2:44:13 PM
REPRESENTATIVE DOOGAN related his understanding that if the
economic stimulus funding for Alaska was set at $100 million,
that the DOT&PF would request $130 million in legislative
authorization under the theory that the DOT&PF might need more
funding or in the event that other states cannot find projects
to meet the stringent federal guidelines.
MR. OTTESEN agreed. He indicated that is essentially how the
program works each year.
REPRESENTATIVE DOOGAN inquired as to whether that excess
authority would be tied to projects.
MR. OTTESEN answered that it is actually more complicated. He
explained that the DOT&PF also requests an unnamed
appropriation. He related a scenario in which a project in
Anchorage was set at $10 million, but the bid was received at
$12 million. He emphasized that the DOT&PF must have flexible
authority or it would not be able to award the project.
CHAIR WILSON stressed the importance of each district receiving
its fair share.
MR. OTTESEN, in response to Representative Johnson, explained
that in a routine cycle the DOT&PF does not ask for 30 percent
excess authority. That calculation is for the specific economic
stimulus package. He further explained that the authority is
not technically dollars, but instead is permission. He
explained that the federal funding is received and is matched up
with authority. He highlighted that the legislature gives its
authority to receive and expend federal funding. He indicated
that the legislature gives legislative authority on a class of
projects to receive expend federal funds prior to the
Congressional appropriation cycle. Thus, the authority "sits on
the shelf." However, the authority is not "cash," he said. The
DOT&PF must have permission to funds to the legislative
appropriation. He then said, "And then we have a project." In
further response to Representative Johnson, Mr. Ottesen
explained that the appropriations are accounted for in the
capital budget documents "to the penny."
2:49:20 PM
REPRESENTATIVE JOHANSEN inquired as to how much excess authority
the DOT&PF currently has available.
MR. OTTESEN explained that he does not have the current excess
figure. He offered that the legislative authority is given to
the DOT&PF by project. He related that the DOT&PF's excess
authority will largely be used by the economic stimulus funding.
He stated that the projects will be good for the state. He also
stated that projects did not make it on the list of potential
stimulus projects will benefit from other projects being built.
He related a scenario in which a person is standing in a long
line at a movie theatre hoping to make the fourth seating.
However, a bus picks up people for the first three seatings of
the film. Thus, the person waiting is line is now first in line
to see the film. He surmised that the projects not selected for
the federal economic stimulus funding will still benefit from
it.
2:50:59 PM
MR. OTTESEN, in response to Representative Johansen, stated that
the DOT&PF does not generally over request in the annual
process. He related that due to inflation the cost of a project
may increase. Thus, the DOT&PF ends up with excess
appropriation each year due to inflation. He explained that has
been true this decade. He remarked the economic stimulus
package creates a set of circumstances that is time sensitive.
Therefore, the DOT&PF is making the request for additional
appropriation authority, he stated.
MR. OTTESEN related that each August every state must report the
number of projects that will be completed by September 30. He
emphasized that Alaska has historically has been "a net winner"
in that process. He opined that there hasn't been a year that
the state did not garner additional funding from other states,
which has benefitted communities all across the state.
2:53:07 PM
MR. RICHARDS referred to slide "Adding Other Projects". He
offered that the projects would have been "in the works for the
past 2 to 7 years." He reiterated that new projects are helped
too, that communities are clamoring for projects and some of the
projects will advance. He opined that approximately a year's
worth of funding will occur. He also stressed that rules are
tight and are fixed in law.
2:54:57 PM
MR. RICHARDS referred to a slide titled "Sub-Allocation." He
said that the DOT&PF cannot sub-allocate funds directly to
communities. He stated that funds will flow through the FHWA
and the DOT&PF must follow the federal rules. He offered that
the only true set-asides are for the AMATS and FMATS.
MR. RICHARDS referred to a slide titled "Why Two STIPs
Underway". He recapped that the 2009 STIP amendment, and the
2010-2013 STIP are required in order to expend federal dollars.
2:57:15 PM
MR. RICHARDS referred to slide titled "Impact to DOT&PF's
Workload". He stated that in order to obligate approximately
$240 million by May 2009, and $450 million between June to
August 2009 for the DOT&PF's regular program, as well as to
obligate the remainder of the stimulus funding between October
2009 to August 2010, the DOT&PF must increase its workload by 50
percent.
REPRESENTATIVE DOOGAN inquired as to how the DOT&PF can handle a
50 percent increase in its overall workload without hiring more
staff.
MR. RICHARDS answered that the DOT&PF will rely on its
consultants to assist them with the additional workload. In
further response to Representative Doogan, Mr. Richards
explained that the funds are expended through the CIP.
2:59:05 PM
MR. RICHARDS offered that the DOT&PF's PowerPoint overview and
fact sheets are linked to its website. He identified the
uniform reporting location (URL) is http://www.dot.state.ak.us.
3:00:55 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 3:00
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HouseT~1.pdf |
HTRA 2/5/2009 1:00:00 PM |