Legislature(2015 - 2016)CAPITOL 17
02/19/2015 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing(s): Department of Transportation & Public Facilities (dot&pf), Commissioner | |
| 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 19, 2015
1:03 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Shelley Hughes, Co-Chair
Representative Louise Stutes
Representative Matt Claman
Representative Dan Ortiz
MEMBERS ABSENT
Representative Charisse Millett
Representative Benjamin Nageak
COMMITTEE CALENDAR
CONFIRMATION HEARING(S):
Department of Transportation & Public Facilities, Commissioner
Marc Luiken - Anchorage
CONFIRMATION(S) ADVANCED
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
MARC LUIKEN, Commissioner Designee
Department of Transportation & Public Facilities (DOT&PF)
Anchorage, Alaska
POSITION STATEMENT: Testified and answered questions during his
confirmation hearing as appointed commissioner to the Department
of Transportation & Public Facilities (DOT&PF).
ACTION NARRATIVE
1:03:13 PM
CO-CHAIR SHELLEY HUGHES called the House Transportation Standing
Committee meeting to order at 1:03 p.m. Representatives Claman,
Ortiz, Foster, and Hughes were present at the call to order.
Representatives Stutes arrived as the meeting was in progress.
^CONFIRMATION HEARING(S): DEPARTMENT OF TRANSPORTATION & PUBLIC
FACILITIES (DOT&PF), COMMISSIONER
CONFIRMATION HEARING(S): DEPARTMENT OF TRANSPORTATION & PUBLIC
FACILITIES (DOT&PF), COMMISSIONER
1:03:31 PM
CO-CHAIR HUGHES announced that the only order of business would
be the confirmation hearing for Marc Luiken, Commissioner,
Department of Transportation & Public Facilities (DOT&PF).
1:04:06 PM
MARC LUIKEN, Commissioner Designee, Department of Transportation
& Public Facilities (DOT&PF), said he is honored to be selected
to serve as commissioner of the Department of Transportation &
Public Facilities (DOT&PF). He stated his focus as commissioner
will be to organize the department to meet the budget challenges
that Alaska and the DOT&PF currently face. He said he intends
to accomplish this by consolidating where possible and creating
efficiencies throughout the department.
COMMISSIONER LUIKEN stated that a $3.5 billion deficit demands
that state government operate differently in the future. Any
change that is made now must be sustainable. That being said,
the DOT&PF will strive to maintain the core services that are
vital to Alaskans every day.
1:05:26 PM
COMMISSIONER LUIKEN reported that for FY 16 the Department of
Transportation & Public Facilities (DOT&PF) must reduce its
operating budget by $12 million, which will equate to
approximately a 4 percent reduction from the prior fiscal year.
These reductions will eliminate 9 full-time, 3 part-time, and 4
non-permanent positions. He assured members that his staff has
done their best to spread these reductions across the department
so that no one area of service is significantly affected more
than another.
COMMISSIONER LUIKEN related that during this period of fiscal
uncertainty, it is ever more important to foster better
communication with the DOT&PF's stakeholders. This includes how
DOT&PF's staff communicates with the legislature, enhancing how
the department involves and communicates with the public and
cultivating better communications with staff across the state.
Improving communications doesn't mean that the DOT&PF is better
at explaining what it can and cannot do, but it does mean that
DOT&PF's staff must be better listeners. Stakeholders provide a
wealth of knowledge and experience that can benefit the
department. Every citizen has the potential to add value to
project design and delivery. He recognized that much can be
gained by improving upon the way DOT&PF involves Alaskans in the
decision-making process, and it must engage the public in a
customer-client focused manner. Under his direction the
department will also explore new revenue generating
opportunities, for example, instituting a 4.5 percent increase
in fares to the Alaska Marine Highway System (AMHS) beginning in
May. The department also plans to introduce landing fees at
Deadhorse Airport in FY 16 and by 2017 he estimated that the
revenue generated from landing fees will offset the operating
costs for the airport. He acknowledged that the Deadhorse
Airport serves as one of the most important transportation hubs
for the North Slope. He suggested that taking proactive steps
to increase the department's revenue will help protect the core
services the DOT&PF provides to Alaskans, which in turn will
help create a more sustainable operating budget.
1:07:36 PM
COMMISSIONER LUIKEN said he begins his tenure by bringing back
some familiar faces to the organizational leadership team,
including that he has asked Steve Hatter to rejoin the
department as deputy commissioner. He characterized Mr. Hatter
as a very talented leader with a background similar to his.
During his previous tenure as deputy commissioner, Mr. Hatter
made outstanding progress in the aviation arena, for example,
fostering an unprecedented 10 year user agreement with the air
carriers at the AIAS [Alaska International Airport System]. In
addition, he has also asked Mike Neussl to serve as the deputy
commissioner for the Alaska Marine Highway System (AMHS). He
stated that Mr. Neussl brings over 30 years of marine and
leadership experience as a former US Coast Guard captain, with
12 years spent in Alaska. Finally, deputy commissioner John
Binder will continue to oversee statewide aviation for the
department, as well as having recently served in the role of
Acting Commissioner for the Department of Transportation &
Public Facilities (DOT&PF).
1:08:56 PM
COMMISSIONER LUIKEN highlighted that his first priority is to
the organization. His vision as commissioner will focus on the
department's core mission and functions, including mobility,
access, and commerce. As a department, the DOT&PF must continue
to provide safe, environmentally responsible, and sustainable
mobility for travelers. Further, the department must improve
access and opportunity for individuals and businesses, as well
as access to Alaska's vast resources. Finally, the DOT&PF must
support commerce to help Alaska's economy grow, he said.
COMMISSIONER LUIKEN highlighted that his second priority will be
to focus on the department's culture. He emphasized that the
DOT&PF must become one department rather than three independent
regions and although improvement has been made since 2012, there
is still more to do. He said that the DOT&PF's service must
reflect an attitude of responsibility and service to the public
rather than arrogance and superiority. The DOT&PF will strive
to provide continuous improvement, operating in a learning mode,
and to ensure that these changes stick, the DOT&PF will
regularly measure its performance and publish the results so
Alaskans can hold the department accountable.
1:10:07 PM
COMMISSIONER LUIKEN offered that the DOT&PF must also become
efficient with its most important resource: its people. The
department stands to lose 30 percent of its staff, primarily due
to an aging workforce. He indicated his desire to create an
organization that people will want to be a part of - one that
encourages growth, and recognizes and rewards collaboration and
innovation. Further, he strives to build an organization that
promotes integrity, transparency, and outstanding service,
accountable to the legislature and to Alaskans. He acknowledged
that he already has a professional and dedicated workforce who
work to serve Alaska, but his goal is to give his employees the
resources, training, and focus to be even better. Governor
Walker said the fiscal challenges before the state present an
opportunity to reset and reevaluate the proper and effective
role for state government. He looks forward to taking on this
challenge so the department may better serve Alaskans today and
in the future, he said.
1:11:25 PM
CO-CHAIR HUGHES recalled that during his previous tenure as
commissioner, he had worked to centralize the department to make
it more functional. She related her understanding that he now
has plans to continue that process. She asked him to elaborate
on his specific plans to consolidate the department.
COMMISSIONER LUIKEN acknowledged that he made progress four
years ago and since then the department has continued to make
progress, but there is more to do. Yesterday he met with one
division and discussed the need to have consistent standards
throughout the state. He stressed the importance of the
department to have consistent specifications, the same vision,
and communicating the same response across the organization to
consultants, contractors, and the public. He emphasized that
his number one priority is to provide leadership and experience,
which is what it will take to change the culture.
1:13:38 PM
CO-CHAIR HUGHES asked what his plans are during these lean
fiscal times in terms of filling any vacancies. For example, as
staff retires, she asked whether he will try to maintain
services without filling these positions. She asked for further
clarification on the percentage of staff that will be retiring
in the next five years.
COMMISSIONER LUIKEN answered approximately 30 percent of his
staff will retire in the next five years. How he will handle
these vacancies will depend on the individual's role and
function, and whether the position is in design and engineering
or maintenance and operations. He envisioned the process of
examining what roles to continue to fill will be an ongoing
process over the next few years.
1:14:50 PM
CO-CHAIR HUGHES directed attention to the proposed 4.5 percent
tariff increase for the Alaska Marine Highway System (AMHS) and
instituting landing fees at Deadhorse. She asked whether other
fee increases will be considered in this budget cycle, and if
so, if he could inform the committee of any planned revenue
increases. In addition, she recognized members of the Aviation
Advisory Board (AAB) are present at today's hearing. She
acknowledged the work the board has done to assist the AIAS in
becoming self-sufficient. She asked whether the commissioner
will use the AAB's expertise when considering landing fees or
other ways to increase revenue without adversely impacting the
business industry.
COMMISSIONER LUIKEN reported that he recently informed the AAB
that he will not make decisions without consulting with the
governor's advisory boards, whether it is the Marine
Transportation Advisory Board (MTAB) or the Aviation Advisory
Board (AAB) since the department needs their expertise and
input. He assured members that unilateral decisions won't be
made.
1:16:50 PM
REPRESENTATIVE ORTIZ, with respect to new opportunities to
generate revenue, asked whether the department has considered
highway tolls.
COMMISSIONER LUIKEN answered yes; that the department currently
charges tolls on the Klondike Highway, such that ore trucks pay
tolls to run heavier loads and in turn these toll fees are used
for maintenance to keep the roadway safe. He agreed that the
department will consider opening up other industrial roads.
1:18:15 PM
REPRESENTATIVE ORTIZ asked whether additional tolls will be
considered for industry rather than for the general public.
COMMISSIONER LUIKEN answered the starting point will be to
consider industry fees, in fact, user fees are being enacted in
Texas, California, Washington, and Oregon as a means to generate
revenue to defray maintenance costs.
1:19:02 PM
REPRESENTATIVE STUTES understood the Alaska Class Ferries (ACFs)
may have encountered a snafu since the design did not include
berthing capabilities for crew. She asked for his approach to
solve this situation.
COMMISSIONER LUIKEN answered that he did not consider this as a
snafu, since the Alaska Class Ferries (ACFs) were intentionally
designed to operate with a 12-hour day crew. He stated that if
the option is to run the ACFs from Auke Bay [rather than
Katzehin] it becomes somewhat problematic, since the roundtrip
run from Auke Bay to Haines and on to Skagway cannot be
accomplished in 12 hours. He directed attention to a response
distributed to the committee today [e-mail of February 18, 2015
from Mike Lesmann, DOT&PF Commissioner's office], noting that
the governor has asked the DOT&PF to provide costs for designing
crew quarters and the department is currently investigating
these costs.
1:20:38 PM
CO-CHAIR HUGHES related her understanding that if the Juneau
Access Road Project (JA) is built, the berthing quarters will
not be required. She asked for further clarification on the
expected completion date for the two Alaska Class Ferries
(ACFs).
COMMISSIONER LUIKEN said he was unsure, but he believes the
first Alaska Class Ferry (ACF) completion date is scheduled for
2017 and the second one is scheduled to be completed in 2018.
1:21:13 PM
CO-CHAIR HUGHES asked for the completion date of the Alaska
Class Ferries (ACFs) without crew quarters if the Juneau Access
Road Project (JA) were to proceed on schedule.
COMMISSIONER LUIKEN said he was unsure, but he estimated the
completion date would roughly be in 2017 or 2018. In response
to a question on the added cost for crew quarters, he replied
that the department is still investigating these costs.
1:22:14 PM
CO-CHAIR HUGHES pointed out that members of the House Finance
Subcommittee received an explanation of the $6.2 million in
additional funding to be transferred from other parts of the
DOT&PF to the Alaska Marine Highway System (AMHS). She asked
him to address this.
COMMISSIONER LUIKEN answered that the AMHS's summer schedule was
published in 2014, prior to oil prices falling and adversely
impacting the state budget. In October the DOT&PF made a
commitment to customers with ferry reservations based on the
ferry schedules, so the department transferred funding to the
AMHS to allow ferries to continue to run.
1:23:49 PM
CO-CHAIR HUGHES related her understanding that the AMHS's
reservations involved approximately 5,600 passengers for about
$700,000 in fares and stateroom fees; however, dividing the $6.2
million into the $700,000 totals about $125 per person.
Therefore, in terms of the $6.2 million, for every $125
generated by customers, the department would be putting in
$1,000. She acknowledged subsequent reservations will be made,
but expressed concern about the subsidized cost since the
aforementioned $6.2 million will take service from other
regions.
1:24:48 PM
CO-CHAIR FOSTER asked for further clarification on the amount of
funding transferred from the other three regions. He asked for
further clarification on whether it was $3 million from the
Northern Region, $2 million from the Central Region, and $1
million from the [SouthCoast] region. He further asked how
these reductions will impact services in the Northern Region.
COMMISSIONER LUIKEN responded that the hardest hit will be
airport and highways maintenance and operations (M&O) funds,
which is primarily the bulk of the M&O funding.
1:25:43 PM
CO-CHAIR FOSTER said often the DOT&PF contracts with one person
to keep a rural airport open. He asked him to specifically
identify how the reductions to statewide airports would be
applied.
COMMISSIONER LUIKEN answered likely it would come from
commodities that are related to managing and maintaining the
airports. In response to a question on where the Klondike
Highway is located, he replied that the Klondike Highway comes
out of Canada and drops down to Skagway.
1:26:43 PM
REPRESENTATIVE CLAMAN asked for the current timeline for the
administration's decisions on the two major projects under the
DOT&PF's jurisdiction: the Knik Arm Crossing (KAC) and the
Juneau Access Road Project (JA).
COMMISSIONER LUIKEN anticipated a decision from the governor
will be forthcoming granting authority to move forward with the
[draft Supplemental] Environmental Impact Statement (EIS) for
the Juneau Access Road Project (JA). He suggested the decision
for the Knik Arm Crossing (KAC) will be made prior to the end of
the legislative session.
REPRESENTATIVE CLAMAN asked for further clarification on whether
the decision on the Knik Arm Crossing (KAC) will be for the EIS
or whether to move forward with the project.
COMMISSIONER LUIKEN reported that the EIS for the Knik Arm
Crossing (KAC) is completed, that the project is currently in
the right-of-way phase. The decision will be whether to move
forward to continue with the application for the TIFIA loan.
1:28:09 PM
REPRESENTATIVE CLAMAN, in terms of the Juneau Access Road
Project (JA), asked whether the commissioner is recommending
completing the [draft Supplemental] EIS, but to put off the
decision to move forward on construction to a future date.
COMMISSIONER LUIKEN answered that his recommendation is to
complete the [draft] Supplemental EIS for the Juneau Access Road
Project (JA). At the end of that period, there will be a ROD
with a preferred alternative. He said he recommends completing
the process so the department has identified a preferred
alternative and obtained a record of decision (ROD) from the
Federal Highway Administration (FHWA).
1:28:52 PM
REPRESENTATIVE CLAMAN asked what year he entered the U.S. Air
Force Academy.
COMMISSIONER LUIKEN answered in 1977.
1:29:44 PM
REPRESENTATIVE STUTES asked whether the funding has been secured
for the [draft Supplemental] EIS for the Juneau Access Road
Project (JA).
COMMISSIONER LUIKEN answered yes; that $800,000 in funding was
encumbered.
1:30:14 PM
REPRESENTATIVE ORTIZ, returning to the potential change order
for the Alaska Class Ferries (ACFs). He related his
understanding that the ACFs were designed to serve the Lynn
Canal area. He asked whether it will provide more flexibility
in the system if the change orders to add the berthing occur
since these features will allow ferries to serve other
locations.
COMMISSIONER LUIKEN answered yes.
1:31:10 PM
CO-CHAIR HUGHES asked whether the funds for the proposed crew
quarters will come from capital funds slated for something else
or if the governor will propose new general funds for the
capital budget.
COMMISSIONER LUIKEN answered that it is too early in the process
to have even broached the issue.
1:31:49 PM
CO-CHAIR HUGHES asked whether the department has been re-
evaluating any other projects on the horizon besides the major
projects [under Administrative Order 271].
COMMISSIONER LUIKEN reported that the department is currently at
the beginning of the next four year Statewide Transportation
Improvement Program (STIP) cycle so his intention will be to
review all of the projects underway to consider which projects
are valid and likely to move forward. He predicted that the
number of projects that will not move forward is probably very
small.
1:32:50 PM
REPRESENTATIVE STUTES asked whether the department has plans to
update docks to accommodate the bow-loading ferries or if the
current docks can accommodate the vessels.
COMMISSIONER LUIKEN replied that if the DOT&PF builds any new
terminals, the facilities will be capable of accommodating bow-
loading ferries, but the Alaska Class Ferries (ACFs) also have
side doors, so modification of existing docks will not be
necessary.
1:33:55 PM
CO-CHAIR HUGHES, after first determining no one wished to
testify, closed public testimony on the confirmation hearing.
1:34:15 PM
CO-CHAIR HUGHES reminded members that signing the reports
regarding appointments to boards, commissions, or as
commissioner in no way reflect individual members' approval or
disapproval of the appointees, and that the nominations are
merely forwarded to the full legislature for confirmation or
rejection.
1:34:39 PM
CO-CHAIR HUGHES [briefly] adjourned the House Transportation
Standing Committee at 1:35 p.m.
1:36:26 PM
CO-CHAIR HUGHES reconvened the meeting for the purpose of
addressing a technicality with respect to the committee report.
1:36:41 PM
CO-CHAIR FOSTER moved to advance the confirmation of Marc
Luiken, as commissioner designee for the Department of
Transportation & Public Facilities to a joint session of the
House and Senate for consideration. There being no objection,
the confirmation was advanced.
1:37:20 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 1:37
p.m.
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