Legislature(2015 - 2016)CAPITOL 17
03/05/2015 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Adjourn | |
| Start | |
| Overview: Statewide Transportation Infrastructure Program by Jeff Ottesen, Department of Transportation & Public Facilities (dot&pf) |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
March 5, 2015
1:03 p.m.
MEMBERS PRESENT
Representative Shelley Hughes, Co-Chair
Representative Benjamin Nageak (via teleconference)
MEMBERS ABSENT
Representative Neal Foster, Co-Chair
Representative Charisse Millett
Representative Louise Stutes
Representative Matt Claman
Representative Dan Ortiz
COMMITTEE CALENDAR
OVERVIEW: STATEWIDE TRANSPORTATION INFRASTRUCTURE PROGRAM BY
JEFF OTTESEN~ DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES
(DOT&PF)
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
JEFF OTTESEN, Director
Division of Program Development
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions during the
overview of the Statewide Transportation Improvement Program
(STIP).
GINGER BLAISDELL, Staff
Representative Shelley Hughes
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified during the overview of the
Statewide Transportation Improvement Program (STIP).
ACTION NARRATIVE
1:03:24 PM
CO-CHAIR SHELLEY HUGHES called the House Transportation Standing
Committee meeting to order at 1:03 p.m. Representatives Nageak
(via teleconference) and Hughes were present at the call to
order.
^OVERVIEW: STATEWIDE TRANSPORTATION INFRASTRUCTURE PROGRAM BY
JEFF OTTESEN, DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES
(DOT&PF)
OVERVIEW: STATEWIDE TRANSPORTATION INFRASTRUCTURE PROGRAM BY
JEFF OTTESEN, DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES
(DOT&PF)
1:03:43 PM
CHAIR HUGHES announced that the only order of business would be
an Overview: Statewide Transportation Infrastructure Program by
Jeff Ottesen, Department of Transportation & Public Facilities
(DOT&PF).
1:05:35 PM
JEFF OTTESEN, Director, Division of Program Development,
Department of Transportation & Public Facilities (DOT&PF),
offered to provide details on the Statewide Transportation
Infrastructure Program (STIP), which is the document the DOT&PF
uses to obtain federal surface transportation funding. Some
amendments to this 100-year old program were 2,000 pages in
length, with general rules and exceptions to each amendment. He
reported that due to the complexity of the federal highway
funding, software doesn't exist that will integrate with the
state's IRIS [Integrated Resource Information System] program.
1:07:22 PM
MR. OTTESEN directed attention to slide 2, "Outline," which
covered today's overview of the general STIP mechanics and
project selection factors. Basically, the Statewide
Transportation Improvement Program (STIP) constitutes the
federal law and regulation covering the transportation funding.
States are required to prepare documents that must be approved
by two federal agencies in order to expend federal funding, the
Federal Highway Administration (FHWA) and the Federal Transit
Administration (FTA), but The STIP may also include state-funded
projects, especially projects of regional significance [slide
3]. For example, if the state decided to build the Knik Arm
Crossing project (KAC) with non-federal funds, it is such a
significant project that it would need to be shown in the STIP.
1:08:50 PM
MR. OTTESEN said fiscal constraint was one rule with greater
implication for the DOT&PF, since the STIP document must be
programmed to spend an expected funding level in the year
covered [slide 4]. The difficulty lies in the uncertainty of
federal funding since the Congress doesn't act on future years
nor has it even finalized the current year's funding, he said.
At the same time, the state must manage a list of up to 200
projects in various stages of development, consisting of unknown
costs since the DOT&PF projects cost estimates. The design
process results in new information regarding right-of-way and
environmental conditions. As issues arise and overall project
costs change, or federal funding changes, the four-year STIP
document "gets out of balance," is no longer fiscally-
constrained, and must be readjusted.
1:10:46 PM
MR. OTTESEN stated that the DOT&PF adheres to a strict public
involvement process and has developed procedures to inform the
public on changes to the STIP, which include how long to public
notice projects and whether the notice requires newspaper
notices or a broadcast e-mail. He identified two classes of
changes to the four-year STIP document: amendments, which
consist of more significant changes and require a public
involvement process; and administrative modifications, which
address minor changes that only require notifying federal
agencies [slide 4].
1:11:37 PM
CHAIR HUGHES asked for confirmation on whether the STIP
amendment required public comment.
MR. OTTESEN answered absolutely.
1:11:44 PM
MR. OTTESEN stated that the STIP includes different categories
of funding, each with unique eligibility requirements [slide 4].
Some require different levels of matching funds. Previously
some federal funds could be carried beyond the immediate fiscal
year, but that is no longer allowed, which means the DOT&PF
can't shelve that funding for future years.
1:12:34 PM
MR. OTTESEN directed attention to the project selection factors
for STIP projects [slide 5], and indicated a significant number
of rules in federal and state law apply to the STIP. The
National Highway System (NHS) in Alaska covers 2,000 miles of
high-level state highways in Alaska. Since local government
doesn't compete for the funding, the DOT&PF selects the NHS
projects using overall system plans, which are governed by state
and federal law and performance data, such as the condition of
pavement, bridges, and the pattern and causes of crashes.
MR. OTTESEN said the overall emphasis of the NHS project
selection was on safety and serving capacity. It's fair to say
that Alaska's Surface Transportation System (STS) has been an
important contributor to the economy, in fact, about 80 percent
of the surface freight continues to be transported on the STS
roads. Finally, continuity plays an important part since Alaska
has a sparse network of roads, which often means that if an
avalanche occurs or a bridge goes out, there isn't any
alternative route. More avalanches are occurring and a number
of bridges need replacement, he said, recalling that an
avalanche cut off service to Valdez two years ago.
1:15:28 PM
CO-CHAIR HUGHES asked how many more landslides are occurring now
as compared to 10 or 15 years ago.
MR. OTTESEN offered to provide the information. He noted that
the department has begun to categorize avalanche hazards, noting
small landslides often occur due to weather and are typically
easy to clear, but others, such as landslides on the Sterling
Highway are due to erosion of the bluff overlooking Cook Inlet,
which undercuts the road and will require a complete rerouting
of the highway at some point in the future.
1:17:06 PM
MR. OTTESEN highlighted a special category of funding in the
STIP that addresses safety, the [Highway Safety Improvement
Program (HSIP)], which has nearly tripled in the current federal
reauthorization [slide 5]. In fact, it has changed the nature
of the kinds of projects that are pursued. In prior years,
safety projects were often small, targeted projects, such as
projects for adding turning lanes, reflectors, or guardrail
installations of roughly $1-2 million each, totaling $17 million
statewide. However, when federal highway safety funding
tripled, the department had to develop larger projects since the
DOT&PF couldn't produce enough small projects to expend the
funds. He remarked that highway safety projects make meaningful
changes, such as adding lanes to the Parks, Sterling, and Seward
Highways, as well as widening shoulders, and constructing
roundabouts in various areas of the state. In fact, this summer
the DOT&PF will change two rail/highway crossings from at-grade
to grade-separated, and thus school buses and fuel trucks will
no longer need to stop. In response to a question, he said
these rail/highway crossing projects are located on the Parks
Highway outbound of Houston, Alaska.
CO-CHAIR HUGHES asked whether the highway safety funds can be
used for lighting, commenting the lighting changes on the Glenn
Highway were very helpful.
MR. OTTESEN answered yes. He pointed out that new lighting on
the Egan Expressway was accomplished using Highway Safety
Improvement Program (HSIP) funds. He said the lighting on the
Glenn Highway was primarily funded through stimulus funding
[American Recovery and Reinvestment Act of 2009 (ARRA)],
although this project would have been eligible for federal
highway safety funding. The department's only concern with
lighting has been the immediate increase in operating costs due
to the electricity required; however, the tradeoff is improved
safety, but it is a matter of policy.
1:20:08 PM
MR. OTTESEN highlighted that one focus of highway safety funding
is for use in areas of demonstrated injuries and fatalities.
Although people ask why the department is not proactive in
addressing safety issues, the department currently works to
address existing problems, and hopes to be more proactive once
it addresses them. Certainly, this program can have a positive
benefit to cost ratio for any investments made. In fact, the
DOT&PF measures the reduction in fatalities and major injuries
attributed to highway safety improvements.
MR. OTTESEN directed attention to the Surface Transportation
Program funding (STP), which is scored. The state shares that
funding with municipalities and tribes. Further, that funding
is sub-allocated to MPOs - the federal term for Metropolitan
Planning Organizations - which are essentially the decision-
making bodies for larger cities and their use of federal
funding. He explained that Alaska has two, one in Fairbanks,
FMATS [FMATS Fairbanks Metropolitan Area Transportation System];
and the second in Anchorage, AMATS [Anchorage Metropolitan Area
Transportation Solutions]. These MPOs are not strictly
municipal organizations, but are collaborative in nature and
include state and municipal representation. In the Lower 48,
some transit organizations are operated by cities by a separate
transit authority, with the transit authority having a voting
membership. For example, if the Knik Arm Crossing was built as
a separate toll road authority, it would have been a logical
addition to the AMATS board. He reported there are 450 MPOS in
the Lower 48, with many MPOs crossing state boundaries, which
means more than one legislature and governor are involved in the
decisions. He recalled that Portland, Oregon has been involved
in rebuilding the bridge across the Columbia River on Interstate
5. The new governor in Washington State decided not to fund its
share of the bridge, which halted the project.
1:23:43 PM
MR. OTTESEN stated that FMATS and AMATS both receive sub-
allocated funding and these MPOs make decisions on state or
municipal roads; however, the DOT&PF does have one vote on these
boards. Further, the state legislature doesn't have authority
over federal MPO funding, which falls exclusively to the MPOs,
he said. Although the remaining STP funding is available to any
other road in the state not on the NHS, this funding has shrunk
in the federal funding stream since the Congress has changed its
priority, which has created a tremendous backlog of projects.
The department has been unable to bring on new projects, which
has been frustrating to many communities, he said.
1:25:08 PM
CO-CHAIR HUGHES asked for clarification on the scoring process
for STP funding. She asked whether the AMATS performs all of
the scoring within the Municipality of Anchorage or if the state
helps score the projects. She further asked whether the state's
participation in scoring falls outside FMATS and AMATS.
MR. OTTESEN answered that it gets a little technical since the
AMATS and FMATS boundaries do not include the entire borough or
municipality, just the urban portions. Thus in Anchorage it
includes Eagle River to the Knik Bridge and the Mat-Su boundary.
However, in the southern direction, it stops near Potter's Marsh
so Girdwood does not fall under the AMATS domain.
CO-CHAIR HUGHES asked whether the state does the scoring for
Potter's Marsh.
MR. OTTESEN answered that Seward is an NHS route, but the state
has dominion on NHS decisions, even inside the MPOs. Although
it is supposed to be a collaborative decision inside the MPO,
the state still holds the primary decision-making power;
however, on all other roads within the MPO boundary, the
Anchorage Metropolitan Area Transportation Solution's (AMATS)
board has the primary decision-making power. He characterized
it as being a hybrid-model of decision making depending on the
class of road.
1:26:38 PM
CO-CHAIR HUGHES asked whether AMATS solely scores the non-NHS
roads within the MPO.
MR. OTTESEN replied that the DOT&PF has one vote. In further
response, he clarified the two MPO acronyms stand for Fairbanks
Metropolitan Area Transportation System [FMATS] and Anchorage
Metropolitan Area Transportation Solutions [AMATS].
1:27:34 PM
MR. OTTESEN directed attention to the process for the project
selection factors depicted on slide 6, beginning with law - both
federal and state law - that drives the requirement for the
Statewide Long Range Transportation Plan (SLRTP). The SLRTP
represents one of the prerequisites for selecting transportation
projects, he said. Both federal and state law require a
planning document, either a Statewide Transportation Improvement
Program (STIP) or something similar. He pointed out that in
Alaska it is referred to as a capital budget list, but
practically speaking it is the same thing. This document helps
the department decide which of the projects ready to be funded
need legislative authority to use federal funds. Under the
process, the department requests legislative authority to use
federal funds on the most immediate projects in the next fiscal
year. When all those steps for those projects are completed,
the DOT&PF can then move them into project development, which is
the point at which design, environmental, and ultimately, the
construction process occurs, he said.
1:28:32 PM
MR. OTTESEN directed attention to the Federal Highway
Administration (FHWA) program overview that illustrated the
steady federal funding, with few exceptions [slide 7]. In 2009,
the stated received a large spike of funding, depicted in purple
on slide 7, in which the state received $175 million in stimulus
funding [American Recovery and Reinvestment Act of 2009 (ARRA)].
In 2005-2012, the red bars show earmarked federal funding, which
was funding identified by the Congress for specific projects.
He explained that the Congress stopped earmarking so almost all
the funding is for the core program, which is depicted by the
blue bars in each year. He reported the three biggest programs
in the state's core program: the National Highway System (NHS),
the Surface Transportation Program (STP), and Highway Safety
Improvement Program (HSIP). The average core program funding
has been running approximately $500 million per year over the
past 10 years, he said.
MR. OTTESEN said the bar chart doesn't include any repurposed
earmarks or funds or funds captured from other states, or funds
that have carried over from prior years, so the program can
actually be larger than shown on slide 7.
1:30:38 PM
MR. OTTESEN directed attention to MAP-21 [Moving Ahead for
Progress in the 21st Century], the most recent federal
authorization that passed late in 2012 [slide 8. He reported
that MAP-21 increased the emphasis on the National Highway
System (NHS), as well as the number of road miles for the NHS.
In Alaska, every road considered to be a primary arterial that
was not previously categorized as the NHS, became an NHS route,
such that about 85 of 90 miles additional NHS road miles were
added in the Matanuska-Susitna Borough (MSB) and Anchorage.
1:31:43 PM
CO-CHAIR HUGHES asked for examples of some of the roads that
were added in the Matanuska-Susitna Borough (MSB), Anchorage,
and Juneau.
MR. OTTESEN answered that Knik-Goose Bay Road and the Palmer-
Wasilla Highway were the two main roads in the MSB, several of
the roads in the arterial grid in Anchorage - typically those
with stop lights - not previously on the NHS, and in Juneau
approximately one-tenth of a mile from Glacier Highway to the
bridge at the existing ferry terminal.
1:32:46 PM
MR. OTTESEN said that under the new MAP-21 reauthorization,
Highway Safety Improvement Program (HSIP) funding almost
tripled, as previously mentioned, but it must be used in areas
in which the department has a demonstrated safety concern based
on crash report records [slide 8]. He identified the biggest
shift in emphasis in MAP-21 was the idea of performance
standards, which will apply to the NHS routes. Thus the state
will essentially be receiving a report card, which will focus on
pavement conditions, bridges, and safety conditions. If the
state doesn't meet the standards set out in rulemaking, the
state will first need to direct more money to the problems to
attempt to remedy them. Over time, if the problems are not
remedied, the Federal Highway Administration (FHWA) will
increase the required state match ratio. He explained that
nominally the match formula was typically 20 percent state to 80
percent federal funds. Alaska and several other states with a
high land base of federal lands were given a discount on match
based on the percentage of federal lands in each state. Thus
Alaska's discount reduced the match ratio from 20 percent to
slightly more than 9 percent. He expressed concern that if the
percentage of match was increased, the nominal rate nationwide
would go from 20 to 35 percent, although Alaska's rate would be
discounted due to the federal lands in Alaska. Still, he
anticipated it could be a big increase, with Alaska's rate
possibly increasing to the high teens, which could result in
$40-50 million in additional costs to the state.
1:35:49 PM
MR. OTTESEN stated that the bridge standard, which the Congress
placed in law, does not allow more than 10 percent of the deck
area on bridges on the NHS to fall below standard. Currently,
10 percent of DOT&PF bridges are below standard, but the DOT&PF
has been working to improve the percentage.
CO-CHAIR HUGHES related her understanding that MAP 21 passed in
2012. She asked whether the state has received its first
"report card" or if the first one will be forthcoming.
MR. OTTESEN answered it has not yet received a report card. The
DOT&PF has been measuring bridge standards for decades so it
knows the condition of the pavement, bridges, and safety
conditions. However, the department does not know the target it
will need to meet since the federal rulemaking is underway, with
some comment periods closed, although the final rule has not
been issued. The department believes its safety record will be
fine, since it is generally pretty good and has gotten better
since 2007. In 2000, about 100 fatalities occurred, but the
figures have been reduced to approximately 60 fatalities per
year, in part due to air bags, anti-lock brakes, and other
warning systems, as well as seat belt use improvements. In
addition, the department has installed rumble strips, wider
lanes, and roundabouts, that all help to reduce the severity of
crashes. He stated that the DOT&PF has been doing significant
work behind the scenes for performance standards.
1:39:50 PM
CO-CHAIR HUGHES asked how much time the state will have to
provide data once rulemaking ends. She asked whether bridges
were the biggest concern.
MR. OTTESEN offered his belief that the DOT&PF was close to
meeting the bridge standards since significant work has been
done. However, he identified pavement as the major problem.
One of Alaska's disadvantage Alaska has been that most of its
NHS roads have driveways or side road accesses so vehicles pick
up and drop gravel on its highways creating roughness. In
addition, Alaska also has permafrost, which creates additional
roughness. Finally, some highways are gravel roads, such as
half the Dalton Highway. He was uncertain how the rulemaking
will affect these aforementioned conditions, reiterating that
Alaska has some built-in disadvantages compared to other states
in the Lower 48 that don't experience these kinds of issues.
1:42:12 PM
MR. OTTESEN stated that Alaska has been asking for consideration
and exceptions for Alaska and the DOT&PF wants to avoid spending
all its dollars "chasing pavement" since do so will mean it will
not be able to do other projects that the citizens expect.
1:42:31 PM
CO-CHAIR HUGHES asked whether the department has been weighing
in during the rulemaking process.
MR. OTTESEN answered absolutely.
1:42:43 PM
MR. OTTESEN discussed additional MAP-21 changes [slide 9]. He
stated that 58 percent of the public bridges and 77 percent of
all public roads are not on the NHS, which means that the
Surface Transportation Program (STP) must provide repair and
maintenance funding, which represents a very large set of needs.
In addition, a significant number of mandatory tasks must be
funded using STP funds, such as the two-year inspection of all
bridges for safety needs, or for transit improvements, such as
the current project to build a transit bus barn in Sitka, or to
pay for ferry terminal needs. Thus, a large number of types and
needs all cling to a small slice of the federal STP funding,
which has led the department to slow or terminate projects in
some parts of the state, he said.
1:44:49 PM
MR. OTTESEN directed attention to the emphasis on the National
Highway System (NHS) [slide 10]. He explained that the circle
graph on the left depicts the federal-aid funding, with the blue
category representing the National Highway Performance Program
(NHPP), which relates to the performance measures he mentioned
earlier. The number of road miles that are considered to be
part of the NHS are depicted in blue on the right of the chart,
which represents less than a quarter of the state's inventory.
This means the smallest slice of roads will be garnering most of
funding under MAP-21, he said.
MR. OTTESEN referred to the graph on the left, to the Surface
Transportation Program (STP) funding, noting that the red and
green road miles on the right were ones eligible for the STP
funding. He pointed out safety funding as the third largest
area, and congestion mitigation air quality, or CMAQ, as the
fourth largest funding area. He identified the remaining funds
for planning, research, and transportation alternatives, which
are shown in orange and blue. He reported that 23 percent of
the road miles garners 57 percent of federal-aid funding. In
summary, Congress has prioritized the National Highway System
(NHS) as the highest priority, but state and local jurisdictions
must take care of non-NHS road needs.
1:46:57 PM
MR. OTTESEN directed attention to the $108 million of Surface
Transportation Program (STP) funding, which is further divided
into five subcategories [slide 11]. He pointed out that the
bridge funding for "off system bridges" totals $3.7 million, but
these funds are insufficient to even conduct the necessary
inspection for bridges that he mentioned earlier.
MR. OTTESEN directed attention to the red slice of $20.3 million
in the circle graph for urban areas larger than 200,000 people,
with Anchorage as the only community in Alaska large enough to
qualify [slide 11]. He highlighted that the green slice of $15
million goes to seven urban areas over 5,000, including
Fairbanks, Sitka, Ketchikan, Kodiak, Palmer, Wasilla, and
Juneau, which is allocated based on a per capita share, with
about half of the funds are allocated to Fairbanks and
approximately $8 million to be shared among the remaining six
communities.
1:49:47 PM
CO-CHAIR HUGHES recalled that the core area of Wasilla is
90,000, yet half of the Surface Transportation Program (STP)
funding was allocated to Fairbanks.
MR. OTTESEN answered that the allocation is all driven by the
census bureau and that agency determined the boundaries. The
third category of STP funding was designated to populations
under 5,000, with numerous communities in the Mat-Su area,
Kenai, Nome, and Kotzebue qualifying to share the $21 million;
however, the funding is clearly inadequate to meet the
transportation needs. He then directed attention to the Mat-Su
Urban Cluster map [slide 12].
1:51:47 PM
CO-CHAIR HUGHES commented on the inadequate STP funding for
small communities. She asked whether he could identify any real
"winners."
MR. OTTESEN answered that there are not any winners and everyone
would feel the pain, for example, a community the size of Juneau
will receive less than $2 million, but it is not possible to
maintain all the non-NHS roads in Juneau and still keep the
pavement intact and bridges repaired.
CO-CHAIR HUGHES asked whether Anchorage funding was
proportionately similar.
MR. OTTESEN agreed, noting that Anchorage previously received
close to $40 million, but it has been reduced to $20 million.
1:52:51 PM
MR. OTTESEN also mentioned that the "any area of the state" MAP-
21 funding of $47.7 million was funding not restricted to a
specific population, but it must be used to cover mandatory
services, such as data collection, civil rights office costs,
bridge inspections, and to extent that any funds remain, will be
used for projects nominated four years ago [slide 11].
MR. OTTESEN related a scenario that illustrated the department's
perspective on STP funding choices, such that Kotzebue requested
an estimated $20 million in funding to build a road project to
its proposed port, but if funding was taken from STP funds
designated to the under 5,000 communities, it would have
depleted the fund [slide 11]. Therefore, the only possible
funding source for a project of that size would be the $47.7
million in the "any area of state" MAP-21 funding.
1:54:25 PM
MR. OTTESEN directed attention again to slide 12. Although the
DOT&PF doesn't design the urban clusters, the US Census Borough
does, the state was allowed to smooth the boundaries and make
them more rational. The MAP-21 Mat-Su Urban Cluster takes in
the core of Palmer and Wasilla; however, it doesn't include all
of the actively-growing areas of the Mat-Su Borough. One slice
of MAP-21 funding goes to the area depicted in yellow, but the
cluster represents less than 1 percent of the Mat-Su Borough by
land area. Maps are available for each of the census areas, he
said.
MR. OTTESEN directed attention to the 2012-2015 Statewide
Transportation Improvement Program (STIP) [slide 13]. This
document provides details, including the program, region,
election district, title, description, type of funding, and what
year the funding will be used. In addition, the department must
show technical requirements, including the phase, the source of
funding, and for instances in which the STIP doesn't cover the
whole project, it also identifies the amount needed to complete
the project. He explained that the state is nearly through the
halfway point of fourth year of the STIP. The DOT&PF has had
three major amendments, including Amendment 12, which was to
address the regional boundary change within DOT&PF, and the
changes that occurred during the closeout for 2014. Thus the
DOT&PF needed to adjust the STIP to reflect what occurred in
2014, for example, to indicate which projects proceeded and
others did not and were moved to the next fiscal year in the
STIP.
1:57:03 PM
CO-CHAIR HUGHES asked whether there was a 2013 - 2016 Statewide
Transportation Improvement Program (STIP) document.
MR. OTTESEN answered that the DOT&PF is currently working on the
2016-2019 Statewide Transportation Improvement Program (STIP).
CO-CHAIR HUGHES related her understanding that as the DOT&PF
finishes one STIP some projects will move to the next one.
MR. OTTESEN replied that the department would like to adjust the
STIP on a two-year cycle. In doing so the DOT&PF would prepare
a four-year STIP, refresh it with a new four-year STIP in the
third year, but never reach the tail end as it currently does.
CO-CHAIR HUGHES asked whether the years would also be bumped.
MR. OTTESEN said the department was asked not to do that by the
previous administration.
MR. OTTESEN offered that the election cycle and administration
change have slowed the department down, but the DOT&PF must
prepare the 2016-19 Statewide Transportation Improvement Program
(STIP) or the state will not receive federal funding.
1:58:11 PM
CO-CHAIR HUGHES asked whether work was currently being done on
the Statewide Transportation Improvement Program (STIP).
MR. OTTESEN answered absolutely.
1:58:16 PM
MR. OTTESEN said that Amendment 13 addresses the governor's
administrative order, AO 271, which halted the Knik Arm Crossing
and Juneau Access Road Project. Thus the department had to find
a different set of projects that were eligible for the funding
that could not go to the Knik Arm Crossing (KAC) and the Juneau
Access [Road Project] this fiscal year. He reported that the
DOT&PF made the necessary changes, closed the public comment
period, and sent the document to the federal agencies for
approval yesterday. He explained that Amendment 14 consisted of
a technical amendment to address the normal ebb and flow of
project development since some projects are delayed for reasons
specific to each project and other projects have changes in cost
estimates. He offered that the department tries to keep STIP
amendments on a two-month cycle.
1:59:23 PM
CO-CHAIR HUGHES asked whether Amendment 13 stayed in the STIP.
MR. OTTESEN answered that the public comment was closed on
Friday, February 13, 2015 and the STIP was submitted to the
federal partners for approval. He indicated that $154 million
in projects were made eligible in the process.
2:00:04 PM
CO-CHAIR HUGHES asked what would happen if the legislature
wanted the two delayed projects to go forward.
MR. OTTESEN answered that each of these projects received prior
legislative approval through the capital budget process. In
fact, he advised that the DOT&PF cannot add projects to the STIP
without prior legislative authorization.
CO-CHAIR HUGHES asked for further clarification that the $154
million replaced the Juneau Access Road Project (JA) and the
Knik Arm Crossing (KAC).
MR. OTTESEN agreed.
2:00:38 PM
CO-CHAIR HUGHES related her understanding that the STIP included
the projects prior to Amendment 13.
MR. OTTESEN agreed, but clarified that the projects had been
listed in the advance construction phase.
CO-CHAIR HUGHES asked whether the STIP would be amended if the
legislature decided to move forward with the projects.
MR. OTTESEN offered his belief that the department could not use
the funds this year even if the administration and the
legislature agreed to move forward with the two large projects.
He characterized the reasons as unique, for example, the DOT&PF
has not yet applied for the TIFIA [Transportation Infrastructure
Finance and Innovation Act] loan for the Knik Arm Crossing and
the draft supplemental Environmental Impact Statement (SEIS)
will not ready this fiscal year on the Juneau Access Road
project. Thus both projects would be ineligible for federal
funding so at this stage the DOT&PF must change the STIP. In
further response to Co-Chair Hughes, he agreed that at the time
the aforementioned projects were placed in the STIP, the
department hoped that both projects would be ready. Again, the
KAC awaits approval to release the TIFIA application; however,
most of the work has been done on the application. He further
clarified that both projects would be included in the 2019 STIP.
2:02:29 PM
CO-CHAIR HUGHES asked whether anything in AO 271 would prevent
the two projects from being included in the 2019 STIP.
MR. OTTESEN said Commissioner Luiken will make specific
recommendations to Governor Walker to proceed to the Record of
Decision (ROD) for the Juneau Access Road project (JA) to ensure
that the state is not obligated to repay federal funding spent
to date. Once the state reaches the ROD, the state will have
options in terms of how to proceed since completing the ROD
doesn't predetermine the chosen alternative. He felt certain
that the commissioner would recommend proceeding with the TIFIA
loan on the Knik Arm Crossing (KAC), since without the TIFIA
determination, the state will never know if the project is
eligible. He characterized it as being the next meaningful
point in the timeline for the project.
2:03:59 PM
CO-CHAIR HUGHES asked for further clarification that the
department can move forward on the two aforementioned projects -
the ROD and TIFIA application without the projects listed on the
Statewide Transportation Improvement Program (STIP).
MR. OTTESEN replied that the funding has already been allocated
to the STIP, the funding was approved by the Federal Highway
Administration (FHWA,) and the department has allocated the
matching funds. From a funding standpoint the work can
continue, but the department will need the administrative policy
decision addressed on AO 271, he said.
2:05:03 PM
MR. OTTESEN advised members that the department faces some
technical constraints with respect to the current STIP and the
2016 STIP. In fact, if the Federal Highway Administration
(FHWA) was asked to approve an environmental document, but the
STIP did not include the project for the next project phase,
FHWA will not approve it, and will place the project in
suspense, he said. He emphasized the importance of completing
the 2016 STIP since a large number of projects throughout the
state could be stalled without it. In response to Co-Chair
Hughes, he agreed the STIP was behind schedule and the delay was
beginning to have some "on the ground" impacts.
CO-CHAIR HUGHES further asked for the reason that the DOT&PF was
behind schedule on 2016 - 2019 Statewide Transportation
Improvement Program (STIP).
MR. OTTESEN offered his belief that Governor Parnell didn't want
to publish a STIP that showed delays for many local government
projects. In further response to Co-Chair Hughes, he
anticipated that the 2016 STIP would be completed by mid-April
2015.
2:07:39 PM
MR. OTTESEN compared the programming considerations to a "river"
since the funding cycle tended to be relentless and the DOT&PF's
goal was to use funding rather than allow it to pass by unused
[slide 15].
MR. OTTESEN stated that federal funding was almost entirely "use
or lose," but it wasn't as simple as just identifying a project,
since the Federal Highway Administration (FHWA) requires the
department to seek project approval by phases [slide 16]. He
explained the FHWA process was to allocate funding for each
stage of the project, including design, right-of-way
acquisition, and utility relocation, if needed, followed by
permitting, and construction. He reported that to get through
these series of steps can take from two to seven years,
depending on the complexity of the project. For example, the
complicated Cooper Landing Bypass on the Sterling began in the
70s, which has the distinction of being the oldest federal aid
project in the US. Although federal funding can be very
challenging, the department has an almost a perfect track record
in not allowing federal funding to lapse. In fact, the state
has also been able to acquire lapsed funding from other states.
Further, the state has been able to respond late in the federal
fiscal year, while other states are not able to react as quickly
as Alaska. He characterized programming as the art of
determining which projects to spend funds on, while keeping in
mind that the state currently has over 1,200 active FHWA
projects.
MR. OTTESEN reported that the department has dozens of design
squads working on the myriad of projects that lie in a variety
of phases, with its overarching goal to absorb the federal
funding in order to better the state's transportation system.
In response to Co-Chair Hughes, he agreed one year the
department lost a total of $.30, remarking that the DOT&PF has
done an excellent job in assuring federal funding stays in the
state.
2:11:11 PM
MR. OTTESEN returned to programming considerations on slide 16,
noted that funding cannot be carried over from year to year, nor
can it be assigned to a project at the time the legislative
capital budget authority occurs. He likened it to having the
state's authority to spend in one spot and federal funding being
in another spot, but these funds are not "married" until the
projects are obligated. He indicated that obligation actually
occurs when a project is certified as having met all federal
requirements and a funding agreement is signed by FHWA and the
state. In Alaska - and nationwide - 30 percent of projects end
up being delayed to a subsequent year since the process to
achieve project funding must address or meet numerous laws and
requirements, such as environmental, air quality, or
archeological concerns. Although these processes are important,
he said, it makes projects expensive, time consuming, and prone
to delays.
2:13:29 PM
MR. OTTESEN, in response to Co-Chair Hughes, replied that he was
referring to federal funding, not state funding, since state
funding is provided in a single block. The state matching funds
would be applied at the same time the federal funding happens.
He described the process, such that the DOT&PF would create a
project identification and acquire a federal aid agreement
signed by the FHWA that will guarantee reimbursement. He
clarified that the FHWA program was not a grant program with
funding happening up front; instead, the FHWA provides certainty
on reimbursement for state expenditures on projects - so federal
reimbursement follows the state expenditures on projects. Thus
the DOT&PF typically will bill the FHWA twice weekly
electronically, he said, noting that the DOT&PF accumulates
receipts for any contractor and staff labor as well as for
materials and bills these expenditures electronically. In
further response to Co-Chair Hughes, he responded that the 90
percent federal and 9 percent state matching funds relate to
most federal funding, including STIP or National Highway System
(NHS) projects, but a few categories are matched at 20 percent.
2:14:57 PM
MR. OTTESEN reiterated that projects were often delayed, but
large, controversial projects have a much higher risk of
slipping due to project complexity and to political support or
opposition. The department manages these uncertainties by
having projects in the queue that can be plugged in to use the
funding. He said, "You absolutely have to have those extra
projects working. It's the only way we ensure that we use all
the funding."
2:15:43 PM
MR. OTTESEN directed attention to slide 17, stating that it's
somewhat embarrassing that the department has not been
obligating its federal funding until well into second part of
the year. He estimated that in the first six months about 20
percent of the program was obligated and in the second six
months the remaining 80 percent were obligated.
MR. OTTESEN stated this pattern started in 2009 when the state
received the American Recovery and Reinvestment Act of 2009
(ARRA) funding. The state funded its current projects, then
depleted the extra projects it had on the "shelf." He explained
that the "shelf" projects were ones that have been developed and
met the federal tests, but were ones that tended not to be the
highest priority projects for the year. Instead, these projects
were projects that are ready to go and are ones that can absorb
federal funding when other projects become stalled. The overall
effect has impacted the department since it must work closer to
the deadline. In fact, the department has continually been
struggling to catch up and add projects to the "shelf," he said.
2:17:14 PM
CO-CHAIR HUGHES asked for further clarification on the line
depicting the 2015 obligation.
MR. OTTESEN explained that these figures are current until
February, but the line will start to rise as the months are
reported. He elaborated by directing attention to the final
column labeled "Total + Transfers," explaining that transfers
were funds that have been transferred to another federal agency.
For example, the Inter-Island Ferry Authority might be doing a
project with the Federal Transit Administration (FTA) and
receive some FHWA funding to complete its budget. In such an
instance, the DOT&PF would ask its federal partner to transfer
funds to the FTA to administer. Thus, each year a certain
number of projects will be transferred and not administered
directly by the state. In further clarification, he stated that
the chart relates to a month-by-month federal fiscal year.
2:19:14 PM
MR. OTTESEN directed attention to other program considerations
[slide 18]. He highlighted recent trends that resulted in
surplus funding due to underbidding, in which the project bid
comes in lower than the obligated federal funds. He said these
funds will be returned to the program; however, the funds must
be expended by the end of the year. In addition, similar
surpluses occur during project closeouts when project costs fall
under the obligated amount; these two trends have brought in
about $100 million to the program in the past five years. Last
year he said he testified before the Senate Finance Committee to
inform the committee that surplus funding could be used for a
major project such as the Juneau Access Road Project (JA) or the
Knik Arm Crossing Project (KAC), yet have very little impact on
other planned projects. Ultimately, the department must develop
more "shelf" projects to absorb the surplus funds, which he
characterized as "use or lose" funds that will lapse by
September 15th if it is not used.
MR. OTTESEN declared that the department must obtain legislative
authority, too; however, the eligibility process has also become
more complicated. As previously mentioned, the DOT&PF shifted
$150 million into the STIP due to AO 271, plus it received $100
million surplus funds from underbidding and project closeouts.
This combined funding totals $250 million this year and the
DOT&PF must identify and certify eligible projects to absorb
this funding or the state will lose these federal funds. He
acknowledged DOT&PF's challenge was to develop "shelf" ready
projects that will meet eligibility requirements - with all of
the steps for each project completed.
2:22:39 PM
MR. OTTESEN, in response to Co-Chair Hughes, identified AC
[advance construction] as being the means for the department to
show its "shelf" projects [slide 18]. He characterized advance
construction as being similar to going on vacation and using a
credit card. He elaborated that federal rules allow projects to
be shown as AC in the STIP and to proceed with signature
approval, but to inform Federal Highway Administration (FHWA)
that the state would like to postpone reimbursement to a
subsequent year. This tool provides the certainty of federal
authorization, but slows down reimbursement in projects, he
said. He described how the AC process would work. He related a
scenario in which the DOT&PF planned to purchase two large
engines for the Alaska Marine Highway System (AMHS), but the
manufacturer estimated the engine delivery date would be in two
years. In that case, the DOT&PF would place the proposed
engines in advance construction (AC), award the bid to the
manufacturer, issue the order, but not execute the terms for
payment until the engines were delivered. In this way, the
department could lock up $30 million in federal funding for the
engines, but request federal funding at the time of delivery by
matching the cash flow to the federal receipts, he said.
2:24:59 PM
MR. OTTESEN offered that advance construction (AC) could also be
used on large projects, for example, ones of three years'
duration [slide 18]. For example, if the DOT&PF had a $90
million construction project with a three-year horizon, the
state could [advance construction] AC $60 million in the first
year, place $30 million in the STIP in funding in anticipation
of contractor construction costs, but receive $30 million in
each of the following two years. He said this process allows
the state to use federal funding in line with the cash flow to
contractors, followed by reimbursement from the FHWA, but it
also allows the state to show additional projects in the STIP,
but avoid the fiscal constraint limitation. Another way the
DOT&PF uses advance construction is in instances in which
shortfalls are anticipated in the fourth quarter. In those
instances, the department will AC [advance construction] a
project in August - with the knowledge the project will not
proceed during the winter months - and payoff the AC in the
first quarter of the next federal fiscal year. Although this
process does not impact the state fiscally, it allows the DOT&PF
to time its projects to take advantage of the maximum federal
funding available, he said.
MR. OTTESEN turned to ILLU [illustrative], which he said was a
little different, such that if extra funding occurs due to
another project being delayed, this project is one that would be
ready to take advantage of the extra money that comes along
[slide 18]. He offered to cover this in more detail later, but
noted that several events can occur that could bring additional
funding to the state rather suddenly.
2:27:53 PM
MR. OTTESEN turned to slide 19, "Programming Considerations,"
and reiterated that the FHWA priority will be on the National
Highway System and on asset management.
2:27:59 PM
GINGER BLAISDELL, Staff, Representative Shelley Hughes, Alaska
State Legislature, asked about federal dollars that don't get
spent at the end of the year. She recalled that typically
general funds are spent first and federal reimbursement follows.
In the event a project comes in under the bid amount, she asked
whether general funds are also forwarded with surplus federal
dollars. In other words, she wondered what happens to the state
matching funds at the end of a project in the event a FHWA
project falls under the bid amount and if the state would then
be required to pay another 10 percent in matching funds.
MR. OTTESEN answered that unexpended funds that are released
from the obligation are released back in the same ratio of $91
federal funding to $9 state general fund matching funds. He
characterized this as "one good thing" that happens since the
federal dollars would also release the state matching funds,
which goes back to the state's "match pot."
2:29:06 PM
MR. OTTESEN directed attention to slide 20, "Funding Wild
Cards," and related instances of additional funding.
Historically, when the Congress has reauthorized the highway
funding bill, it has increased its funding by about 20 percent.
Currently, both the Republican and Democratic leadership in the
Congress have been considering an increased transportation
program although the funding mechanism still hasn't been
decided. Historically, the FHWA Trust Fund has been funded via
gas taxes from vehicles using the highway system; however, the
model has been declining in recent years. Although these gas
taxes still generate 80 percent of the current funding needed,
the taxes no longer generate 100 percent of the funding. This
decline has been happening, in part, since cars are more
efficient, and because some vehicles don't use gasoline or
diesel fuel. In addition, reduced driving occurred after the
recession and although it has been increasing, driving has been
rising at a much slower rate. Therefore, the Congress must find
another funding mechanism, such as a mileage tax; however, he
predicted that the technical and social implications will take
time to develop. In addition, a tax forgiveness program for
overseas profits might come back to the state, which would
generate revenue that could be allocated to the Highway Trust
Fund. If that were to happen, it would mean the state would
have additional funds, he said, and it could solve some of the
other problems with projects in the queue.
2:31:59 PM
MR. OTTESEN turned to "Repurposed Earmarks" [slide 20]. He
reported that the state still has approximately $153 million in
funding from federal earmarks, which do not lapse. In 2012, the
Congress repurposed some earmarks, changing the title of all the
earmarks. So instead of the earmarks identified as project "x,"
"y," and "z" in location "y," these funds became eligible like
Surface Transportation Program (STP) dollars, and the funds were
directed to the Alaska DOT&PF, and had all the same eligibility
requirements as formula funds, except that the state was
required to use the repurposed funds within three months.
Fortunately, the state had projects ready, with sufficient
matching funds and legislative approval, he said, so the DOT&PF
was able to generate a list and obligate the repurposed funds or
Alaska would have lost the funding.
2:33:38 PM
MR. OTTESEN cautioned that if something similar were to occur
with respect to the remaining $153 million in earmarks, it will
be difficult, especially if the Congress repurposed the funds
outside of the legislative session.
CO-CHAIR HUGHES asked whether the legislature could take advance
action so it could trigger legislative authority if the Congress
took action.
MR. OTTESEN answered that she has identified the challenge. He
suggested it takes time to get projects ready, such that the
department can't get projects ready in six months, so it would
need to look at projects already in the process. Certainly, the
state will spend next year's funds on the highest priority
projects, so the remaining projects that are extra ones. In
addition, it is helpful to have some projects in advance
construction since the AC can be paid off, but timing challenges
exist, he said. The list for 2016 will be different than the
2017 list; however, the DOT&PF cannot predict when the
repurposing might happen. In response to Co-Chair Hughes, he
predicted that if the department learned it needed to respond to
repurposed earmarks in May 2015, that the DOT&PF could spend
next year's state matching funds and request additional matching
funds in January [based on the federal fiscal year]. Thus there
are ways to temporarily borrow; however, he exclaimed that state
matching funds are an issue and the state has not been carrying
much balance in its "match fund." Thus state matching funds
pose one issue and having sufficient projects ready to go poses
another issue. In further response to Co-Chair Hughes, he felt
confident that the department could find 30 to 50 percent of the
total $153 million in repurposed earmark funding; however, he
was uncertain whether the DOT&PF would have enough "shelf ready"
projects, unless one of the major projects became eligible.
2:36:59 PM
CO-CHAIR HUGHES related her understanding that the state could
potentially lose some funding. She asked whether the department
has been holding any conversations with Alaska's Congressional
Delegation.
MR. OTTESEN answered yes; stating that the DOT&PF holds ongoing
discussions with the governor's Washington D.C. staff. He
explained that the DOT&PF has been discussing earmarks since
2012. He predicted that the next set of earmarks the Congress
will likely take action on will be the SAFETEA-LU
[Transportation Equity Act: a Legacy for Users earmarks in
2005] era earmarks. He surmised that the Congress could lapse
the earmarks, and if so, Maine and Alaska would lose the most
since they have the most earmarks. Although Alaska stands to
lose the most, Alaska stands to lose the most in the event it is
not ready to obligate. In response to Co-Chair Hughes, he
agreed that it would be triggered by the Congress reauthorizing
MAP-21 [Moving Ahead for Progress in the 21st Century Act].
MR. OTTESEN commented that the Congress has set a deadline for
the end of May 2015 to achieve reauthorization. At the last
national meeting, the DOT&PF learned that the Congress will
likely do a short-term extension, but it does plan to
reauthorize MAP-21 by mid-summer; however, the legislature will
be out of session so the DOT&PF will manage it with the tools it
has at its disposal.
2:39:10 PM
MR. OTTESEN remarked that the Statewide Transportation
Improvement Program (STIP) document constantly changes, but he
said it was important to have the flexibility to change the
document. In response to Co-Chair Hughes, he stated that the
STIP can be accessed from the DOT&PF's home page
[http://dot.alaska.gov/stwdplng/cip/stip/index.shtml].
MR. OTTESEN explained that the link includes the amendments, the
current Statewide Transportation Improvement Program (STIP),
along with an interactive map that also allows people to access
project status reports. He concluded by acknowledging that the
STIP is complicated.
2:41:09 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:41
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| STIP Overview 3-4-15.pdf |
HTRA 3/5/2015 1:00:00 PM |