Legislature(2015 - 2016)CAPITOL 17
01/29/2015 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| Overview: Department of Transportation & Public Facilities (dot&pf) - Department-wide | |
| Overview: Department of Transportation & Public Facilities (dot&pf) - Aviation | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
January 29, 2015
1:04 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Shelley Hughes, Co-Chair
Representative Benjamin Nageak
Representative Louise Stutes
Representative Matt Claman
Representative Dan Ortiz
MEMBERS ABSENT
Representative Charisse Millett
COMMITTEE CALENDAR
OVERVIEW: DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES
(DOT&PF) - DEPARTMENT-WIDE
- HEARD
OVERVIEW: DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES
(DOT&PF) - AVIATION
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JOHN BINDER, Acting Commissioner; Deputy Commissioner -
Aviation, Department of Transportation & Public Facilities
Anchorage, Alaska
POSITION STATEMENT: Presented a PowerPoint overview of the
Department of Transportation & Public Facilities (DOT&PF) and
aviation program.
CONNIE MACKENZIE, Legislative Liaison
Office of the Commissioner
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Testified during the overview of the
aviation program.
ACTION NARRATIVE
1:04:09 PM
CO-CHAIR NEAL FOSTER called the House Transportation Standing
Committee meeting to order at 1:04 p.m. Representatives Stutes,
Claman, Ortiz, Hughes, and Foster were present at the call to
order. Representative Nageak arrived as the meeting was in
progress.
^OVERVIEW: DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES
(DOT&PF) - DEPARTMENT-WIDE
OVERVIEW: DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES
(DOT&PF) - DEPARTMENT-WIDE
1:04:24 PM
CO-CHAIR FOSTER announced that the first order of business would
be a department-wide overview of the Department of
Transportation & Public Facilities (DOT&PF).
1:05:02 PM
JOHN BINDER, Acting Commissioner; Deputy Commissioner -
Aviation, Department of Transportation & Public Facilities
(DOT&PF), stated that he currently serves as Acting Commissioner
and will for a few more days until the new commissioner, Marc
Luiken, arrives. In addition, he also serves as the Deputy
Commissioner - Aviation and he will continue in that position.
Today's briefing will be a broad overview of the DOT&PF since
the committee has previously heard overviews on the DOT&PF's
public facilities, surface transportation, and marine highway
system programs. He would like to spend most of his time
presenting a PowerPoint on the DOT&PF's aviation program.
1:05:49 PM
ACTING COMMISSIONER BINDER said that during times of fiscal
constraint it is very important to ensure that the department's
day-to-day activities feed back to the statutory requirements
[under AS 44.42.020] [slides 2-3]. Instead of reading the
entire statute to members, he focused on and identified key
words in the DOT&PF's statute that outline its authority,
including to plan, design, construct, and study existing
transportation modes; develop comprehensive long-range
transportation plans, and cooperate and coordinate with federal,
state, and local government agencies. He also emphasized that
the department "shall" study alternative means of transportation
in the state. In addition, the department has the
responsibility to develop and manage facilities and supervise
aeronautics, ensuring that air carriers operate in accordance to
statute. Further, the DOT&PF inspects weights and measures,
including monitoring commercial vehicle enforcement by operating
weigh stations.
ACTING COMMISSIONER BINDER highlighted the department's mission
to "Keep Alaska Moving through Service and Infrastructure"
[slide 4]. The department accomplishes this by providing day-
to-day services, such as maintenance and operations (M&O) to
keep roads cleared, airports open, and ferries running to serve
Alaskans. Alaska faces significant challenges compared to other
states since Alaska provides multi-modal access. He emphasized
the importance of transportation infrastructure to assist in
finding opportunities for exploration and development of areas
in Alaska that have not yet been touched.
1:07:51 PM
ACTING COMMISSIONER BINDER reviewed the DOT&PF's organizational
structure, commenting that the new commissioner, Marc Luiken,
will begin work next week [slide 5]. Currently, the DOT&PF has
three deputy commissioners, with Kim Rice overseeing highways,
the equipment fleet, and the new information systems and
services division. He stated that he serves as the deputy
commissioner overseeing the aviation system, including the
international airport system, the rural aviation system, and
measurement standards and commercial vehicle enforcement. The
department has one vacant deputy commissioner position that
oversees the marine highway system and special projects, he
said. Rob Campbell currently serves as the Central Region
director and also as acting director of the Northern Region. He
stated that the SouthCoast Region director's position recently
became vacant, as well. He anticipated that the DOT&PF will
work with the new administration to fill the vacant director
positions soon.
1:08:56 PM
ACTING COMMISSIONER BINDER highlighted that the Aviation
Advisory Board, Marine Transportation Advisory Board, and Knik
Arm Crossing, formerly KABATA, all fall under Commissioner
Luiken.
1:09:43 PM
ACTING COMMISSIONER BINDER directed attention to the executive
organization and the management team, consisting of the
commissioner, the three deputy commissioners and the three
regional directors [slide 6]. In the past 18 months, the
department has been working so all deputy commissioners work
across modes and avoid silos, noting each one will still have
the technical responsibility of overseeing their respective mode
of transportation. First, management has worked hard to improve
communications, attempting to avoid using jargon and using plain
talk instead. Second, despite the fiscal resource challenges,
the department has a policy of "no whining" and management, in
particular, recognizing it has sufficient assets to do the job.
In fact, many functions the department provides can't be
predicted due to the influences of the weather. Finally, the
department tries to find ways to achieve its goals without first
saying "no." Ultimately, "no" is sometimes the right answer,
but there's usually a better way to initially respond, he said.
1:11:19 PM
ACTING COMMISSIONER BINDER reviewed the DOT&PF's assets,
including highways, airports, harbors, ferries, and weigh
stations [slide 7]. In response to Representative Stutes, he
offered to provide information on how many of the 11 ferries
operate 12 months per year.
ACTING COMMISSIONER BINDER directed attention to the Governor's
Endorsed FY 16 Budget totaling $628 million. This includes a
small sliver of federal funds designated for federally-mandated
programs, $286 million in program receipts, and $85 million for
the International Airport System (AIAS), even though the airport
system generates its own revenue through rates and fees. He
said the general fund [of $339 million] is self-explanatory. In
response to a question by Representative Claman, he answered
that the Governor's endorsed capital budget figures being
discussed today were submitted by Governor Walker [slide 9].
1:13:30 PM
ACTING COMMISSIONER BINDER reported on the proposed capital
budget at $1.2 billion, with the majority of funding stemming
from federal funding. He pointed out slivers on the pie chart
that represent the general fund monies that cover deferred
maintenance, harbor grants to municipalities, and general fund
matching fund monies. Other slivers show the amount designated
for international airport funds, which are not general fund
funds, with about $12 million for statutory-designated program
receipts for cooperative reimbursable grants to municipalities
for the purpose of utility relocations that will be reimbursed
by municipalities.
1:14:20 PM
REPRESENTATIVE NAGEAK asked whether the [International Airport]
construction bonds are state bonds.
ACTING COMMISSIONER BINDER answered that those funds are derived
from airport-generated rates and fees to carriers. In further
response, he explained that the airport has statutory authority
to issue construction bonds via the Department of Revenue.
1:15:05 PM
ACTING COMMISSIONER BINDER offered that the department has
reported on some of its major capital projects and is scheduled
to go into a little more detail on the Knik Arm Crossing (KAC),
formerly the Knik Arm Bridge & Toll Authority (KABATA), and the
Juneau Access (JA) projects. Although the department currently
has contracts in place and has performed some preliminary design
work on these projects, any discretional funding or additional
funding has been placed on hold per the governor's
administrative order, AO 271. Commissioner Luiken and the
administration will review those projects and the DOT&PF will
keep the committee informed on updates to the projects [slide
10].
1:15:52 PM
CO-CHAIR FOSTER asked the department to provide expenditures and
budgets for the big transportation projects.
1:16:29 PM
CO-CHAIR HUGHES said she appreciated the department referring to
the projects as "big projects" instead of megaprojects. She
related her understanding that AO 271 directed the department to
halt discretionary spending on the Knik Arm Crossing (KAC) and
the Juneau Access (JA); however, she asked whether the
administrative order also halted spending on the Alaska Class
Ferry (ACF) and the MV Tustumena replacement or if these
projects were still on the "big projects" list.
ACTING COMMISSIONER BINDER answered that the department has
paused projects but AO 271 only affected the Knik Arm Crossing
(KAC) and the Juneau Access (JA) projects.
1:17:06 PM
REPRESENTATIVE STUTES presumed that the difference between the
Alaska Class Ferry (ACF) and the MV Tustumena is that the ACF is
essentially an inter-island vessel and MV Tustumena is an ocean
going vessel.
ACTING COMMISSIONER BINDER answered that is correct; the Alaska
Class Ferries will be smaller fast vessels designed for quicker
round trips of shorter durations whereas the MV Tustumena is a
larger mainline vessel designed to carry larger payloads.
1:17:58 PM
ACTING COMMISSIONER BINDER highlighted the DOT&PF's 2014
accomplishments, commenting that much of what the department
does goes unnoticed unless something goes wrong [slide 11]. The
department provides routine services and operations, including
maintenance programs to keep roads and airports functioning.
The department's capital program last year was slightly over $1
billion and that appropriation will provide funding on projects
for the next couple of years. In addition, the department
inspects several hundred commercial vehicles each day at weigh
stations. The department also measures scales, fuel dispensers,
and natural gas dispensers as part of its weights and measures
function. In response to a question by Co-Chair Foster, he
reported that Dan Smith is the current division director, but
the function also falls under his deputy commissioner
responsibilities. In further response, he agreed that Dan
Breeden was the prior director.
1:19:00 PM
ACTING COMMISSIONER BINDER directed attention to the Information
Services and Systems Division (ISSD) previously mentioned. He
offered that the department is excited about the information
techy consolidation. He characterized the prior information
technology function as a group of little groups performing well
in their respective functions and divisions; however, the IT
functions were not being coordinated department-wide. Thus, the
department had numerous versions of Adobe Acrobat, AutoCAD, and
other computer programs being used. The department has since
consolidated its IT functions into a single division in Juneau
and the DOT&PF anticipates great advantages, including planning
for future operations and infrastructure needs.
ACTING COMMISSIONER BINDER offered that the big driver to make
regional boundary changes [and create the SouthCoast Region] was
to even out the workforce. He reported that the Central Region
has experienced rapid growth in population in the Anchorage bowl
and the Matanuska-Susitna valley areas thereby dramatically
increasing the Central Region's workload, but the Southeast
Region remained constant. The federal MAP 21 [Moving Ahead for
Progress in the 21st Century Act] funding focused on larger
population urban areas and the National Highway System (NHS),
which has shifted capital project work to the Central Region.
He anticipated additional efficiencies in the department by
consolidating the harbors, ferries, and coastal environment,
coastal engineering and design in the SouthCoast Region in
Juneau.
1:21:12 PM
CO-CHAIR FOSTER asked for copy of the map that shows the
previous boundaries and the current boundaries.
1:21:22 PM
CO-CHAIR HUGHES asked for further clarification on what was
combined or shaved off.
ACTING COMMISSIONER BINDER asked members to imagine a map of the
state, noting that the area including the Aleutian Chain to
Southwest Alaska was moved to the Southeast Regions. Thus, the
two big peninsulas are now part of the SouthCoast Region, along
with Southeast Alaska. In response to Co-Chair Hughes, he
agreed that the Aleutian Chain was previously part of the
Southcentral Region.
1:21:53 PM
ACTING COMMISSIONER BINDER reiterated that the federal MAP 21
creates challenges since it directs federal funding to urban
areas. Therefore, the department will have considerably less
flexibility in funding projects in smaller communities or to
more evenly distribute the federal highway funds across the
state. He predicted that more state funds will be needed to
accomplish projects in smaller areas and communities.
ACTING COMMISSIONER BINDER advised members that the DOT&PF has
been consolidating and working to find efficiencies to reduce
its overall budget. Besides the IT consolidation, the
department has recommended increased use of deicing chemicals on
at intersections and on roads in larger population centers. In
fact, deicing chemical use saves time and overtime needed to
clear roads during freezing rain or heavy snow since the roads
clear much easier with the deicing coating. Next, DOT&PF has
also been using tow plows in several areas to allow for multiple
lane clearing using one vehicle. Further, the DOT&PF has
reclassified a maintenance and operations foreman who can fly in
a state-leased aircraft to rural villages and provide training
to rural contractors who often lack heavy equipment experience.
Since this "flying foreman" also has electrical expertise, the
DOT&PF can avoid contracting with Anchorage electricians. This
training also helps reduce damage to equipment, runways, and
lighting systems. The department hopes to expand this model to
other parts of the state, such as Fairbanks, Kotzebue, and Nome
[slide 12].
1:24:03 PM
ACTING COMMISSIONER BINDER directed attention to impacts the
fiscal constraints may have. While the department will maintain
its priorities of keeping the major roads and airports cleared,
budget reductions will likely result in increased time to plow
roads and depending on the weather events, will likely add a few
extra hours or an extra day to clear side roads.
^OVERVIEW: DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES
(DOT&PF) - AVIATION
OVERVIEW: DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES
(DOT&PF) - AVIATION
1:24:58 PM
CO-CHAIR FOSTER announced that the final order of business would
be an overview of the Department of Transportation & Public
Facilities - Aviation.
1:25:15 PM
ACTING COMMISSIONER BINDER said that his passion is aviation and
Alaska is an exciting place to be since Alaska has the largest
aviation system in the world. The Alaska International Airports
System (AIAS) consists of Anchorage and Fairbanks airports.
Although the Juneau airport is also an international airport, it
is not a state-owned facility. He directed attention to the
AIAS mission statement, "To keep Alaska flying and thriving,"
which relates to the AIAS's focus of generating its own rates
and fees. The rural or Statewide Aviation (SWA) mission
statement, "To sustain and improve the quality of life
throughout Alaska," relates to the importance of aircraft to
rural villages and with 82 percent lacking roads, the rural
airports provide critical access to services and goods, he said.
1:26:25 PM
REPRESENTATIVE NAGEAK expressed concern that the state aviation
system in Bush Alaska lacks competition. Constituents regularly
report that the cost of flying between the villages is extremely
costly and places hardships on them when they want to visit
family or friends in other villages. In fact, the cost is very
high even if the travel distance between villages is only 75-90
miles, he said. He asked what can be done to reduce costs and
increase competition.
ACTING COMMISSIONER BINDER answered that the message is "loud
and clear."
REPRESENTATIVE NAGEAK interjected by asking whether roads are an
option.
ACTING COMMISSIONER BINDER responded that it would be one
option, but in the long run roads are more expensive to maintain
than airports. In terms of competition, a large number of
communities fall under the federal essential air service. Thus,
the US Department of Transportation (US-DOT) does subsidize the
air carriers in villages to reduce costs, but it is still very
expensive.
1:28:31 PM
REPRESENTATIVE CLAMAN asked how well the Alaska International
Airports System (AIAS) is doing to reach its goal of self-
sufficiency, essentially self-funding through revenues.
ACTING COMMISSIONER BINDER answered that AIAS is required to be
self-sufficient. The AIAS covers all its costs through rates
and fees. He offered to cover this in more detail in his
PowerPoint; however, if the AIAS did not collect enough, the
carriers would be charged to make up the difference. He
reported that no state general funds are directed to the
international airports.
REPRESENTATIVE CLAMAN asked for further clarification as to
whether the funds are directed to the AIAS or if the funds go to
the general fund and are reappropriated.
ACTING COMMISSIONER BINDER answered that the funds are deposited
directly to the International Airport Revenue Fund and not to
the general fund.
1:29:28 PM
CO-CHAIR HUGHES asked for the amount of the federal subsidy to
rural carriers and if the subsidy is typical for other rural
areas in the Lower 48.
ACTING COMMISSIONER BINDER answered that it varies by each
location. The US Department of Transportation puts out request
for proposals (RFPs) for contracts to carriers, typically every
two years and the contracts are awarded to the lowest offers
with carriers subsidized to at least break even to operate the
route.
1:30:26 PM
CO-CHAIR HUGHES asked whether rural carriers receive greater
federal subsidies than those in the Lower 48 due to the longer
distances and associated cost of travel in Alaska.
ACTING COMMISSIONER BINDER answered that Alaska is essentially
the last state to receive an essential air service (EAS)
subsidy, noting the rest of the US does not receive any
essential air service funds.
CO-CHAIR HUGHES asked whether the DOT&PF is concerned about
losing the funds or if the department is confident that these
funds will continue.
ACTING COMMISSIONER BINDER answered that the essential air
service (EAS) and the bypass mail system funds continue to come
under scrutiny when the budget comes up in the Congress every
few years. The federal subsidy for the bypass mail system helps
to greatly reduce the cost of moving goods in Alaska, as well.
He said the DOT&PF keeps engaged with Alaska's Congressional
Delegation in Washington D.C., noting that the delegation is
aware of these subsidies.
1:31:38 PM
CO-CHAIR FOSTER asked whether many communities or just a few
receive the essential air service (EAS).
ACTING COMMISSIONER BINDER answered that approximately 50 very
small locations receive the essential air service (EAS) since
carriers would not be able to make enough money by providing
that level of service to the villages.
1:32:01 PM
CO-CHAIR FOSTER recalled there was an issue related to why
Little Diomede was not included on the EAS list.
ACTING COMMISSIONER BINDER answered that the Federal Aviation
Administration (FAA) changed its regulations in the late 70s,
with respect to eligibility. Any community that was currently
receiving air service was eligible for EAS, but since Little
Diomede did not have a runway at the time, it did not receive
service; and therefore, Little Diomede was technically not
eligible for the program. He reported that the DOT&PF has been
able to get Little Diomede into another program to help to
subsidize about half of the air service.
CO-CHAIR FOSTER commented that Little Diomede Island has a
runway a few months every year on the ice. He recalled that the
community uses a tractor to create a runway on the ice and
pretty decent sized airplanes land on Little Diomede.
1:33:11 PM
ACTING COMMISSIONER BINDER directed attention to the
organization and leadership structure for the aviation system.
He stated that he serves as the executive director for the
Alaska International Airport System (AIAS). He reported that
the AIAS was created by statute many years ago, that it
currently operates as a system although there were some years
when the Anchorage and Fairbanks airports competed with one
another [slide4]. The DOT&PF has combined many of the
functions, including the combined airport systems office that
handles administrative functions, the information technology,
leasing, and concessions. The FAA requires a master plan for
each of the international airports every few years.
ACTING COMMISSIONER BINDER AIAS reported that the majority of
the revenue for the AIAS system stems from Asian carriers
passing through with cargo. He emphasized the importance for
carriers to know they have an alternate airport to use, noting
that both airports have never been closed at the same time,
despite volcano eruptions and storms.
1:34:41 PM
CO-CHAIR HUGHES asked whether it was unusual for a state to own
the two major airports in the state.
ACTING COMMISSIONER BINDER answered yes; that most states have
an aviation division, but that typically entails cooperating
with municipalities that own the airports.
1:35:08 PM
REPRESENTATIVE ORTIZ mentioned that Juneau [International
Airport] is not owned by the state. He asked whether that is
also true for the Ketchikan airport.
ACTING COMMISSIONER BINDER answered it is true for Juneau, but
not for Ketchikan. The state actually owns the Ketchikan
airport and Ketchikan [Gateway Borough] leases it from the state
and operates it. They charge their own rate structure to try to
generate as much revenue as possible.
REPRESENTATIVE ORTIZ asked whether Ketchikan Gateway Borough
(KGB) has any financial commitment with the state.
ACTING COMMISSIONER BINDER answered that as of several years ago
the Ketchikan Gateway Borough has not been able to generate
sufficient revenue to cover its costs; in particular, since they
must operate the ferry between the mainland and the airport.
Thus, the state has started providing a subsidy to the KGB in
the past couple of years, he said.
1:36:18 PM
ACTING COMMISSIONER BINDER directed attention to the annual
revenues and operations, maintenance, and debt costs, stating
that generally the operating cost for the AIAS runs
approximately $85 million, with approximately $450 million in
debt in bonds [slide 5]. As stated earlier, this revenue is
generated from landing fees, fuel flowage, and terminal rates,
which typically are generated from the carriers. The rest of
the items are divided between concessions and public parking,
with passenger and facility charges (PFCs) being the few dollars
charged to each ticket that help to cover terminal costs. The
AIAS is required by debt service and bond covenants to raise 125
percent of the debt service for that year, which ends up driving
rates and fees, as well, he said.
1:37:35 PM
ACTING COMMISSIONER BINDER pointed to the graph that shows the
cargo activity [slide 6]. He indicated that the chart
represents cargo activity, color-coded, with cargo shown in
light blue, passenger traffic shown in green, and international
passenger traffic shown in purple. The intrastate cargo shown
in very dark blue is significant to the carriers and
communities, but represents a small percentage of the cargo
moved through the airports. He pointed out that since 2007, the
airports are down about 30 percent in overall cargo. In fact,
cargo is just now beginning to stabilize and passenger service
is beginning to increase, he said.
1:39:18 PM
REPRESENTATIVE CLAMAN said his district has continued interest
in the Anchorage International Airport. He referred to the
graph, on side 6, and said it was not likely that the airport
will stabilize back to the 2007-2008 levels. He asked for his
perspective on expansion issues and the length of time before it
will be necessary for the airport to expand. He suggested that
based on the chart, it might be many years before expansion will
be necessary.
ACTING COMMISSIONER BINDER answered that he is absolutely right.
The airport handled significantly greater traffic many years ago
without an issue. He predicted it would be quite some time
before the cargo activity reaches those levels. In addition,
Anchorage and Fairbanks international airports just completed
their master plans. For the first time ever, the two airports
worked together to designate the other as alternates. He
characterized the cohesiveness by stating that Anchorage already
has a fourth runway, but it just happens to be 150 miles to the
north. Rather than using a calendar, the department bases it on
trigger events, such that if carriers start complaining about
delays per flight, it will be time to consider expansion.
Further, the airports have other options such as flight
patterns, and which runway to use for departures. While those
decisions can optimize operations, it can create more of a noise
issue since it may mean aircraft taking off over the city during
some of the peak periods during the day.
1:41:42 PM
REPRESENTATIVE CLAMAN suggested that any trigger events that
could affect operations seems quite a long time away.
ACTING COMMISSIONER BINDER answered that is absolutely right,
that part of it relates to carriers using larger, more efficient
aircraft, which has resulted in the same amount of cargo being
transported with fewer landings. The effect is to increase
cargo capacity without impacting takeoff and landing times, even
though revenue is also reduced since the airport charges per
landing.
1:42:19 PM
CO-CHAIR HUGHES said she hopes for greater economic diversity in
the coming years, as well as an earlier trigger point resulting
perhaps from China's middle income population causing increased
demand for goods. Referring to the cargo depicted in light blue
on the chart on slide, she recalled hearing that planes arrive
in Alaska full, but do not return full so open capacity exists.
She asked for confirmation on whether open capacity exists on
flights returning to Asia.
ACTING COMMISSIONER BINDER answered yes; however, open capacity
is less due to the aforementioned dynamic, in which the growing
Asian middle class can now afford the higher dollar items
America tends to produce. This means less and less space is
available on the return travel, resulting in large cargo volume
and extra landings for refueling due to transporting extra
weight.
CO-CHAIR HUGHES remarked that this is good news.
1:43:45 PM
ACTING COMMISSIONER BINDER directed attention to the primary
revenue drivers and airfield activity through September 2014,
although he noted he has updated information through December
31, 2014 not shown on the graph [slide 7]. The green line
currently tracks slightly above the red line. He said this is
encouraging and speaks to the stabilization in the cargo market;
however, these trends are not just in Anchorage but are
worldwide trends. He explained that all airlines suffered
during the recent depression in 2008-2009, as well as from fleet
changes.
1:44:32 PM
ACTING COMMISSIONER BINDER turning to passenger activity, said
that Alaska has seen a dramatic increase in international
passenger traffic charter service in the winter. The Asian
market has been excited about experiencing northern lights in
the winter. He reported that Changsha, a city of 7 million
people in the Hunan province of China began its first flight on
December 28, 2014, and will have regularly scheduled
international service in March to several US destinations, all
passing through Anchorage.
ACTING COMMISSIONER BINDER directed attention to the operating
agreement with carriers, stating that the 10-year operating
agreement was established in July, consisting of 30 signatory
airlines who have the agreement with carriers. He explained the
process, noting that the agreement is a residual agreement.
This means the AIAS sets its fees based on projected operational
costs. At the end of the year, if costs are not met, the AIAS
will send out billings to charge for the difference. The
advantage for the airlines is slightly reduced rates over non-
signatory carriers, plus the carriers have a much greater say in
the type of infrastructure upgrades or terminal improvements, or
capital projects the airport will undertake since they have a
vested interest in the facility. The department has greatly
improved communication with carriers. He said the carriers love
the Anchorage and Fairbanks airports and he is excited about the
relationship.
1:46:37 PM
CO-CHAIR FOSTER asked whether it would be possible to obtain a
list of the signatory airlines and the members of the Alaska
Aviation Advisory Board (AAAB).
ACTING COMMISSIONER BINDER answered yes; noting the Alaska
Aviation Advisory Board (AAAB) consists of 11 members, but
includes representatives of companies such as Northern Air Cargo
and FedEx, as well as public members.
1:47:35 PM
CO-CHAIR HUGHES asked for interaction between the AIAS and the
Alaska Aviation Advisory Board (AAAB) and the role of the AAAB.
ACTING COMMISSIONER BINDER replied that Lee Ryan, Vice-
President, Ryan Air serves as the AAAB's Chair. He indicated
that he speaks with him regularly. The board holds regular
teleconferences, as well as several board meetings per year to
discuss aviation, the budget, and maintenance and operations
issues. Most of the board members are heavily involved in
carriers serving rural communities so they provide feedback and
suggested improvements. As the deputy commissioner of aviation,
the commissioner has delegated the primary interaction to him,
he said. Further, the commissioner often attends these board
meetings, he said.
CO-CHAIR HUGHES asked whether the Alaska Aviation Advisory Board
(AAAB) considers issues and challenges on an ongoing basis and
provides annual recommendations or if the board has statutory
guidelines. She further asked whether the board must make
annual recommendations and if he could expand on the AAAB's
role.
1:49:14 PM
ACTING COMMISSIONER BINDER answered that the AAAB has a charter
signed in 2003 or 2004, with specific guidelines, including
providing specific recommendations related to budgeting,
operations, maintenance, and capital projects. Thus, the AAAB
constantly reviews those documents and provides input from the
board's perspective. Members serve three-year terms and terms
are offset, he said.
ACTING COMMISSIONER BINDER stated that the airport works to keep
its business base and tries to expand the business [Strategic
Planning and Marketing, slide 10]. From the airport's
perspective, he characterized the task as nearly impossible to
accomplish; however, the airport works to invest in the business
it has, help carriers expand their business locally, and to
retain its customers. The strategic plan was just updated in
December, to figure out some of the key initiatives for this
next year. The airport has included a business plan that has
focused on how to add value to the cargo passing through the
airport. Currently, the AIAS is just serving the airports and
has very little input in what happens with the cargo. For
example, certainly if it is possible to receive lots of
different pieces for an assembly or distribution center, such as
Amazon, value could be added to the cargo, which could benefit
the community and the state.
ACTING COMMISSIONER BINDER, in terms of the marketing plans,
reported that 90-95 percent of the cargo that comes through the
AIAS is via Asian carriers. As executive director of the AIAS,
he helps carriers understand the uniqueness of using Alaska; for
example, the DOT&PF's laws have provisions regarding cargo
transfer rights that don't exist in the rest of the country.
Most of the leadership changes every few years so it's necessary
for the AIAS to provide ongoing information to these carriers.
ACTING COMMISSIONER BINDER stated that the AIAS accounts for
about 1 in 10 jobs in Anchorage [slide 10].
1:52:19 PM
CO-CHAIR HUGHES, in addition to the Economic Development
Corporation, said she hoped the AIAS communicates with the
Division of Economic Development for statewide opportunities,
especially with the open cargo.
ACTING COMMISSIONER BINDER, in terms of seafood, explained that
Asian markets have different preference, such as they want the
heads on fish whereas in Alaska, fish processing typically
removes the heads. The department has been working with
fishermen on issues such as these. He offered his belief this
could provide some opportunity for westbound cargo traffic.
1:53:19 PM
CO-CHAIR HUGHES also suggested contacting Greg Wolf, executive
director for the World Trade Center, to discuss the
aforementioned Asian market needs.
1:53:38 PM
ACTING COMMISSIONER BINDER directed attention to the master
plans, which are updated every ten years. He reported that the
master plans are finalized, the process went well, and the AIAS
had lots of community involvement. The last update in the 2005
was not very successful, in part, by trying to set dates for new
airport infrastructure; however, he said he is happy with the
direction the AIAS took this time.
1:54:10 PM
ACTING COMMISSIONER BINDER directed attention to the statewide
aviation scope and scale [slide 13]. He stated that of the 249
airports, DOT&PF personnel staff 50 airports and the remainder
are contract personnel with the local communities and villages.
Using local staff requires significant training and oversight to
ensure that the airports receive good maintenance and
operations. He related that the Federal Aviation
Administration's Code of Federal Regulations (CFR), Part 139,
relates to certificated airports and is based on the size of the
aircraft that fly into the airport. For example, any airport
that Alaska Airlines flies to must be certificated under the
FAA, Part 139, which requires increased maintenance and scrutiny
to ensure that the airport is operating safely. In addition,
these airports must have crash and fire rescue capability
available.
ACTING COMMISSIONER BINDER stated that the rural system is not
self-sustaining and incurs approximately $35 million in
operating costs, but only generates approximately $5 million
through leasing revenue from the tenants at those airports. He
characterized the rural airports as being heavily subsidized by
the general fund.
1:55:42 PM
ACTING COMMISSIONER BINDER highlighted some of the FY 15 and FY
16 projects. He said that the FAA breaks out the funding by
runway safety, pavement rehabilitation, rural access and
buildings. The runway safety project at ADAK was a
congressional mandate [slide 14].
1:56:11 PM
CO-CHAIR FOSTER asked whether communities seeking to have their
airport runway lengthened, which is federally funded, must
adhere to requirements and criteria so it largely determined by
the FAA or federal government. He asked if the FAA makes
decisions on runway lengthening or whether the state has any
role in the determination.
ACTING COMMISSIONER BINDER answered that the state has a large
say since the FAA requires states to have some type of scoring
system in place to prioritize projects. The FAA mandates that
it somewhat follows the national scale, although some leeway
exists for disparities or differences in Alaska as compared to
other states. The FAA has ascribed to the prioritization system
the state uses. He said that if the state decided to select
something with a lower priority, the state must have
justification to do so. For example, it's possible that
flooding at breakup might occur or some other situation could
counteract the funding. With respect to the grant assurance
process, the FAA requires "a whole bunch of strings" that the
state must do to maintain the airport for the future.
1:57:35 PM
CO-CHAIR FOSTER asked whether runway extensions are part of the
Surface Transportation Improvement Plan (STIP).
ACTING COMMISSIONER BINDER answered that the Division of
Statewide Aviation has an Aviation Spending Plan, which similar
to the STIP.
1:57:57 PM
REPRESENTATIVE NAGEAK, with respect to the Kotzebue and Barrow
airports in his district, reported that the terminals are very
small in Barrow and the parking is horrendous. Although there
isn't any room for expansion on the town side of the runways,
especially in Kotzebue, there is some space on the south side of
Barrow. He asked whether there are any plans to expand on the
state-owned land and remedy the problems.
2:00:05 PM
ACTING COMMISSIONER BINDER answered that the Division of
Statewide Aviation just completed the master plan in Barrow,
which is the starting point for the FAA. He acknowledged that
depending on the decisions on Shell offshore development, the
need for expanded infrastructure will be significant.
Currently, the division will determine the traffic need with be
there. He agreed that certainly south of the Barrow airport and
around Kotzebue, due to type of land, upgrades are tremendously
expensive. The FAA requires be a demonstrated need or valid
forecast for the air traffic need if the state is to pursue
upgrades; however, the FAA does not get involved in economic
development projects, which fall more on the state, he said.
Thus, the division must wait to show a demonstrated need, he
said.
REPRESENTATIVE NAGEAK maintained there is a need.
2:01:31 PM
CO-CHAIR HUGHES asked for further clarification on the rural
access category of FAA construction projects [slide 14].
ACTING COMMISSIONER BINDER stated that many rural areas have old
or outdated lighting systems, instrument approach navigational
aids to allow aircraft to use the facility in inclement weather
or at night that impact access. In addition, when carriers
upgrade their fleet to larger aircraft they need longer runways
to land and take-off. These projects are rolled into the
prioritization system since there would be a demonstrated need
for the expanded infrastructure.
2:02:21 PM
CO-CHAIR FOSTER, on a personal note, said he has flown into at
least 40 airports throughout the state. He characterized the
program as being first rate and commended Acting Commissioner
Binder.
ACTING COMMISSIONER BINDER acknowledged his staff does a great
job.
2:02:47 PM
ACTING COMMISSIONER BINDER said the FAA requires each state to
have an Alaska Aviation System Plan (AASP) [slide 15]. These
comprehensive plans must include the airports for that state.
Certainly, the DOT&PF owns so many airports that it tends to
focus on the state owned airports; however, he has been working
hard to include some of the rural airstrips and municipal-owned
locations, as well. He highlighted some of the projects and
plans in the AASP, including the Capital Improvement &
Maintenance Program essentially provides a comprehensive needs
assessment, including future forecast, an assessment of the
current status, and what needs to be upgraded and fixed.
Referring to the FAA Performance Measure Scorecards, he said the
FAA is required to provide personnel classification numbers for
all 19 airports. He said the FAA requires fees be at fair
market value and the state prepares an Economic Regions Report
that breaks up the state into economic regions to better
calculate the fair market value, which can be challenging due to
the subsistence in rural Alaska.
2:04:17 PM
ACTING COMMISSIONER BINDER directed attention to the aviation
challenges in the future [slide 16]. He said that the biggest
challenge in Alaska is the distance to Washington DC. He said
that when federal agency staff fly to Anchorage or Fairbanks,
they think they have seen Alaska. It doesn't begin to touch the
challenges Alaska faces in rural Alaska aviation so he works to
bring staff to fly to rural village communities to see the
challenges that these communities face. He reported that the
current FAA federal funding authorization bill will expire on
September 30, 2015 so the reauthorization process is underway.
Typically, Alaska has fared pretty well, usually approximately
$180-$200 million in airport funding. He hoped that would
continue. In terms of winter maintenance, the division is in
its second year for using chemicals the EPA requires for runway
icing. He expressed concern since the new chemicals are half as
effective and twice as expensive; however, the state doesn't
have any choice. Fortunately, Alaska has experienced milder
winters, which helps with road clearing and snow removal, but
airports hover at the freeze-thaw temperatures, which cause
icing and freezing rain conditions instead of colder
temperatures that allow easy snow removal at airports. In
response to Co-Chair Foster, he indicated the approximate costs
are $1 to $2 million in Anchorage and Fairbanks. He offered to
provide the statewide figures to the committee.
2:06:51 PM
CO-CHAIR FOSTER recalled that shipping oxygen in Nome was an
issue. He asked whether it was resolved and if the hospital
obtained a waiver.
ACTING COMMISSIONER BINDER was unsure. He surmised it is not an
issue, but he offered to track down the information.
CO-CHAIR FOSTER recalled it was a federal issue.
CONNIE MACKENZIE, Legislative Liaison, interjected [from the
audience], that she recalled the issue but did not recall how it
was resolved.
2:07:37 PM
REPRESENTATIVE STUTES referred to the earlier discussion on
essential air service (EAS). She mentioned that she
participated at a leadership conference on Kodiak Island. Some
village elders participated via teleconference. She recalled
they were asking about EMS, and she wondered if the commissioner
was familiar with a federal subsidy on marine service.
ACTING COMMISSIONER BINDER replied that he is not familiar with
the program, but he will check into it.
REPRESENTATIVE STUTES said she would appreciate being notified
if there is a program.
2:09:05 PM
REPRESENTATIVE CLAMAN complimented the department on the Airport
Master Plan Process. Judging by the number of people attending
and a general understanding of the significant community
involvement, he noted that the end product reflected a better
understanding in the community on the role the airport system
plays in the state but also satisfaction in the public process.
He said, "Nothing but compliments from me."
2:09:51 PM
CO-CHAIR FOSTER recalled that the state general fund for the
aviation portion is $35 million versus the $5 million offset by
the revenue. He recalled that the amount spent versus the
amount generated is often mentioned with the AMHS. He asked
whether the department can make a fair comparison of the three
modes of transportation. For example, he understood that with
surface transportation, there is a $.08 fuel tax and licensing
fees.
ACTING COMMISSIONER BINDER said that needs to be looked at a bit
more. He recalled hearing that the AMHS serves 1 percent of the
state population, whereas the aviation system serves a much
larger percent of the population. He offered to try to obtain
some figures.
CO-CHAIR FOSTER hoped the department could provide a one-page
comparison of general funding and any offsetting revenues for
all three modes of transportation.
2:13:21 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:13
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Jan 29 House TRA - DOTPF Department Overview 2015.pdf |
HTRA 1/29/2015 1:00:00 PM |
|
| Jan 29 House TRA - DOTPF Department Overview 2015.pdf |
HTRA 1/29/2015 1:00:00 PM |