Legislature(1999 - 2000)
01/28/1999 09:02 AM Senate FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
GENERAL SUBJECT(S): SB 31-CAPITAL BUDGET; SB 32-MENTAL HEALTH BUDGET OVERVIEW BY THE DEPT. OF TRANSPORTATION AND PUBLIC FACILITIES The following overview was taken in log note format. Tapes and handouts will be on file with the Senate Finance Committee through the 21st Legislative Session, contact 465-2618. After the 21st Legislative session they will be available through the Legislative Library at 465-3808. Time Meeting Convened: 1/28/99 9:02 AM Tape(s): SFC-99 # 10 Sides A & B PRESENT: Senator Parnell Senator Adams Senator Torgerson Senator P. Kelly Senator Donley Senator Phillips Senator Leman Senator Wilken Senator Green - excused ALSO PRESENT: Joe Perkins, Commissioner, Department of Transportation & Public Facilities; Nancy Slagle, Director, Division of Administrative Services, Department of Transportation & Public Facilities; BOYD BROWNFIELD, DEPUTY COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND PUBLIC UTILITIES; Kurt Parkan, Deputy Commissioner, Department of Transportation and Public Utilities; Dennis Poshard, Legislative Liaison/Special Assistant, Office of the Commissioner, Department of Transportation and Public Utilities; Bob Doll, System Director, AK Marine Hwy System, Department of Transportation and Public Utilities; Mike Downing, Director, Division of Statewide Design and Engineering Services, Department of Transportation and Public Utilities; Tom Bringham, Director, Division of Statewide Planning, Department of Transportation and Public Utilities; John Horn, PE, Regional Director, Central Region, Department of Transportation and Public Utilities; Tony Johansen, Regional Director, Northern Region, Department of Transportation and Public Utilities; Bob Martin, Regional Director, Southeast Region, Department of Transportation and Public Utilities; David Teal, Director, Division Of Legislative Finance; Fred Fisher, Fiscal Analyst, Division of Legislative Finance Tape SFC-99 #10 0 CO-CHAIR JOHN TORGERSON Chairing this meeting. He introduced committee members. He referred to memo setting out guidelines for subcommittee budget process. AK Railroad was scheduled to give a presentation on Feb. 11, but might give a short presentation today. 46 JOE PERKINS Commissioner Department of Transportation and Public Facilities Introduction of DOT&PF staff present at this meeting. 69 JOE PERKINS I will begin with general comments about transportation. 80 JOE PERKINS Transportation in general - look at the big picture of transportation in AK. It is the lifeblood of AK economy. Both rural and urban Alaskans depend on this. Important to look at national transportation picture. 11% commerce is dependent on transpiration in US. 1/5 of total American expenditures spent on transportation. Jobs - construction of facilities contributes many jobs in Alaskan. Transportation is a prime contributor of the economy of AK. 125 JOE PERKINS Talk about the state of the Department of Transportation and Public Facilities We commissioned a customer satisfaction survey. We found some interesting things. 52% of AK were completely satisfied. 90% were completely satisfied with Anch and Fbx Airports. Many are happy with Marine Hwy System. 51% felt their area was dealt fairly with funding allocations. It is our intention to do this survey every year with federal grant money. Our lowest score was with the food service at Anch Int'l Airport. We've made upgrades adding Burger King and Cinnabuns. We have a long way to go with transportation. Increased fed funds will help us to do those changes. We've done good planning to allow us to do programs of this size We can construct most beneficial projects with this money. Over past several years Department of Transportation and Public Facilities budget has decreased. 189 JOE PERKINS (He began to address a handout.) In the past, we had been allowed to be more flexible with fed. funds. The federal requirements now allow us to do preventive maintenance on roads. We are able to substitute summer money with federal money. Winter projects are not covered by federal funds. Many of the Department of Transportation and Public Facilities employees are working summers using federal funds for those construction projects. This federal program is good for another three years. For now we're in good shape. If federal funds are eliminated we'll need state general funds. 227 We've taken many steps to make the department more efficient. I will list: 2 years ago we reorganized Department of Transportation and Public Facilities We are now seeing results. We consolidated engineering services into one area. It is working. We also consolidated fiscal services and payroll in our headquarters. We've implemented technology into our operations. Using liquid chemicals on the roads, which saves on sanding. We've acquired combined vehicles to do many tasks such as sanding and plowing without the need to switch equipment on the vehicle. It is call a Concept Truck. We've established equipment pools. On the facilities side we've upgraded system controls in many of our buildings. One thing I don't like is the fixed cost of electric bills. We've implemented computer upgrades and now offer website bidding services information. We've also implemented many little changes. Refer to use of cellular phones for snowplowers and others working alone and at risk. How you measure work accomplished? Lane miles per employee - AK has the highest at 34.9. We have staff all over the state. To operate over that area is a challenge. We are constantly in the state's eye. 312 Employee Staff Positions. The department has 178 engineer positions. (Reference to Budget Dispositions) The department has 82 new positions requested in Gov. Budget. This has caused some misunderstanding because 52 positions were for the Malespina, which the legislature mandated operation but did not fund the personnel to operate. We are asking for eight new positions for the Anch. airport He listed other misc. new positions requested. 333 Conclude general introduction SENATOR LOREN LEMAN With regard to the use of federal funds, what is forced account? JOE PERKINS It is not a contract and cost plus. We are using our people to do the work. Without this work we will have to lay off the people. SENATOR LOREN LEMAN Are you able to decrease your print advertising with the use of the electronic technology? Are print ads still a federal requirement? JOE PERKINS We area looking at that. We have tremendous newspaper costs. We follow old rules and regulations. We are looking at those policies and making changes. SENATOR LOREN LEMAN If you still print advertising, can you make it a short ad and direct readers to web for more information? JOE PERKINS We will look at that. Refer to North Dakota bidding process. 375 JOE PERKINS TEA-21 Refer to trials and tribulations on passage of this federal measure. It is a confusing arena. We were successful in utilizing all 1998 federal funds. Plus we collected more funds from states that were unable to utilize funds in time for the Oct. 1 deadline. We have completed new programs. (TEA-21 Available Funding handout) This was basically a bill dominated by formula funding. Describe that some of the projects are very complicated. Program is further complicated by federal requirements. We are receiving earmarked projects in the federal budget. Listing some of these projects: a road in the Kenai area that is flanked by federal lands, a King Cove road, etc. We are seeing a trend across the country. The well-organized and efficient DOT's will get the federal funding. Under the old ISTEA bill, there was a Provision 18 that allowed federal funds to be used on any public road. It was accidentally dropped out of final. SENATOR DAVE DONLEY Is that the same as the National Highway System? JOE PERKINS Basically. It tore our system up. We had to stop work on community roads. We got US DOT to back off and give us an exemption. Refer back to chart. We anticipate $395.5 in federal funding this year. We're unsure of FY00 fed funding. It is dependent on amount of gas taxes collected. The fed.'s underestimated federal gas tax revenues. Because of this AK could get more. However the law says every state gets 90% of tax collected in their state returned. That could mean a reduction in our funds. This makes it difficult to estimate what our funds will be. We also need to estimate state match. It could be up $60 million. Governor proposed 9-cent increase in gas tax. Estimated revenues from this increase will meet state match requirements if we get all fed funding. CO-CHAIR JOHN TORGERSON Did AK's congressional delegation fund the King Cove road? JOE PERKINS That was a direct fund for that project. It didn't affect us. CO-CHAIR JOHN TORGERSON Question status of the STIP requests. JOE PERKINS I don't have that in my presentation. I will be passing out the STIP information, which I just received last night. (determined this information was included in members' handout) CO-CHAIR JOHN TORGERSON Regarding discretionary projects of Sen. Stevens and Murkowski, do you have information in your packet about this JOE PERKINS Yes CO-CHAIR JOHN TORGERSON Did TEA21 extend the amount of time you are obligated to spend federal funds? JOE PERKINS It did, but not easily. (Explain the formula program) Discretionary programs are now stretched out 4 years. Refer back to same handout and describe items on list. AK Ferryboat AK/HI Ferryboat. We were told majority of funds would go to AK since HI doesn't really have a ferry system. CO-CHAIR JOHN TORGERSON Some confusion whether this fund could be spent on only large or smaller vessels. JOE PERKINS Suggestions from Congressional delegation say build another Kennicot, but we are under no obligation. CO-CHAIR JOHN TORGERSON We could hold the funds and allow the pot to build up? JOE PERKINS Yes Ferryboat Discretionary. We have to apply for funds each year. Public Lands Discretionary. We were successful last year in obtaining these funds. (Describe various projects.) Again this is a competitive process between states. (Speak to getting projects done in phases.) If phase one is funded, pretty sure phase two will also. Bridge Discretionary. We don't have good projects. SENATOR RANDY PHILLIPS Nominate the Ketchikan bridge. JOE PERKINS It's a requirement that the project must be over $10 million SENATOR DAVE DONLEY How does this relate to demonstration of need? JOE PERKINS I will get to that. Demonstration Projects. (Refer to another page in the handout.) These were not Department of Transportation and Public Facilities projects but $16 million worth of projects suggested by the House of Representatives. Tape: SFC - 99 #10, Side B 4:20 PM JOE PERKINS (Continue with handout.) We asked for comment on these suggested projects but really haven't gotten any feedback. One exception is the Dalton Hwy. SENATOR RANDY PHILLIPS Where on the Dalton? JOE PERKINS I will show you later. JOE PERKINS There is sufficient money in demonstration money to do DIS and the design and have some to apply toward construction. However, it won't cover all the construction costs. He gave an example of a hypothetical project. CO-CHAIR JOHN TORGERSON Can you accumulate this money? JOE PERKINS Yes. It never runs out. CO-CHAIR JOHN TORGERSON You would hold onto the money until the pot builds up before beginning the project? JOE PERKINS This pot will never build up. Most of the funds will be needed for design. This money can't be used on any other projects. There is not enough money in here to complete the project. CO-CHAIR JOHN TORGERSON It will cost $27 million to design this bridge? JOE PERKINS It will cost us about 15% of total construction cost for design, about $20 million CO-CHAIR JOHN TORGERSON JOE PERKINS If we request construction money it would be in the bridge discretion fund on top of money already here. The rest will have to be funded some other way CO-CHAIR JOHN TORGERSON What is the department's criteria to say that some communities had to match and some did not? JOE PERKINS Some projects the community will undertake and we will monitor. (List some examples.) CO-CHAIR JOHN TORGERSON What about the Seward ferry facility? Will they be expected to make a match? JOE PERKINS We expect the project will be done by the AK Railroad. CO-CHAIR JOHN TORGERSON Have you talked to Ketchikan to see if they want to contribute to the bridge project? JOE PERKINS No. SENATOR DAVE DONLEY Ask for explanation on Ship Creek project. JOE PERKINS Money will either go to the railroad or the municipality, depending on who undertakes the construction. SENATOR DAVE DONLEY Is this the same money that was designated to go to the Seward Hwy? JOE PERKINS Unsure, this is not our project; we did not submit it. SENATOR DAVE DONLEY So it's structured as a federal grant to the state or the Municipality of Anchorage. JOE PERKINS To the state, I will pass on to whoever does the work. SENATOR DAVE DONLEY Request additional information in writing. JOE PERKINS I'm almost in the same fix. Most of the projects, I'd never heard of before they came out in the bill. CO-CHAIR JOHN TORGERSON Is money subject to reappropriation if project does not go through? JOE PERKINS Congressman Don Young is the person to talk to. CO-CHAIR JOHN TORGERSON What about the Shakwak project? JOE PERKINS Alaska Shakwak. This money is there, but US DOT have a history of making appropriation less than what is in the trust fund. Authorized by not appropriated. This happened to many states. TEA-21 said money could be given to Canada for their portion of road. But we could give our money, if we wanted, to Canada to do the Alaska portion of the road. It also said we could use the funds for the Haines Hwy or the AK Marine Hwy. We are the only state allowed to do this. Disagreement with feds on balance of the account. Only strings attached are that the funds must be spent on either the Haines Hwy or AK Marine Hwy. No match required. Since the funds may disappear, I propose we use them on projects that will be completed with this portion of the funds. Other states won't be happy when they find out about this. Detail proposed breakdown of expenditure of funds. That money will be handed out this year and next. SENATOR RANDY PHILLIPS Remainder of funds for the Shakwak project? JOE PERKINS No. There is no remainder. SENATOR RANDY PHILLIPS What about the northern route of the road? JOE PERKINS We have no say. Federal government is giving funds to Canadians. SENATOR DAVE DONLEY You mentioned spending $30 million of this allocation for a new ferry. Are you talking about building new large ferry like the Kennicott? JOE PERKINS I was thinking about Dayboats. I suggest a separate briefing on this matter for the committee. That's not in concrete. What needs to be done is get rid of $20 million quickly on the Haines Hwy. Basically the funds need to be spent on projects in Southeast AK. SENATOR DAVE DONLEY I have concerns with operation costs. CO-CHAIR JOHN TORGERSON We will schedule subcommittee overview to get into this matter. SENATOR RANDY PHILLIPS What about the Juneau Access road? Will it be eliminated with this improved ferry system? JOE PERKINS We're still working on our recommendation on the Juneau Access road. Right now I don't know what that will be. We're looking at every angle before we make a recommendation. SENATOR RANDY PHILLIPS Is there a possibility you will recommend both ferry and a road? Is that an option? JOE PERKINS Don't know. We are looking at all alternatives. Ferry is a must, no way to get to Haines without a ferry to cross Lynn Canal. You can't build a bridge. SENATOR DAVE DONLEY How much money so far has been spent of this proposal? JOE PERKINS About $5 million. SENATOR DAVE DONLEY How has this process been funded? JOE PERKINS Funded before me. Through the Legislative process and STIP. SENATOR DAVE DONLEY Please describe. JOE PERKINS It's been feeding off past appropriations. But now funding is getting tight. If needed, we will ask the Legislature for about $100,000 more. I want this process locked up once an for all SENATOR DAVE DONLEY Will you list it as a separate line item in STIP? JOE PERKINS Will ask for it specifically. We received over 5000 comments on our draft DIS. That is a big job to interpret all those comments. They are not all one- liners. Many detail issues such as avalanches and sea lions. SENATOR RANDY PHILLIPS When do you expect to have your recommendation complete? JOE PERKINS We would like to have within next 3 months before you leave. CO-CHAIR JOHN TORGERSON Is Shakwak already appropriated? JOE PERKINS In last year's program. Instead of including in regular funding program, I want to turn the project over to the special Shakwak trust fund allocation. CO-CHAIR JOHN TORGERSON Are you going to seek authorization to change these funding sources? JOE PERKINS Don't think will we will need authorization unless you tell us. CO-CHAIR JOHN TORGERSON Want to talk about more. I'm unsure that the funds shouldn't be spent on the marine dayboat system. SENATOR AL ADAMS Funding is only restricted to these two systems in SE AK. CO-CHAIR JOHN TORGERSON Realize. Ferry funding source requires a 20 percent match, this requires none. I think we should put money in where we can get the most out of it. JOE PERKINS One thing we are looking at is that the funds it must be obligated very quickly. Don't think ferry money could be obligated before 3 years. Concerned about our congressional delegation's ability to maintain the allocation once other states find out. CO-CHAIR JOHN TORGERSON I have confidence that Senator Stevens is not going to let that happen. SENATOR RANDY PHILLIPS Are you going to talk about other road projects later? JOE PERKINS Yes. Refer back to the handout. Scenic Byways Discretionary. Natl. Corridor Preservation Grant. Coordinated Border Infrastructure Grant. Intelligent Transportation System. We are doing well at getting our portion of that money Able to implement a system that requires no stopping at weight stations. This funding will also pay for weather alert systems. Conclude We intend to pursue these programs aggressively and get what funding we can. SENATOR DAVE DONLEY National Highway System and other program dollars. Are these funds divided from the $280. JOE PERKINS Yes. SENATOR DAVE DONLEY What's the $315 figure? An extra shot from August? JOE PERKINS No, it is my estimate of what we'll get in 2000. SENATOR DAVE DONLEY So the $280 amount can go up and down? JOE PERKINS Less so than $315 figure for 2000. SENATOR DAVE DONLEY How will that impact our state match? JOE PERKINS State match will have to be fairly flexible. CO-CHAIR JOHN TORGERSON My intent is to go back to what is authorized. Unhappy with legislature authorizing projects and DOT&PF rating them and knocking off projects. Understand that there is more authorization on the books than money to spend. JOE PERKINS Respond. SENATOR AL ADAMS TEA-21 funding is high from gas tax receipts. Refer to federal motor fuel tax and the proposed raise of the state gas tax. What do you anticipate will be the effect if the proposed tax does not pass? Can we replace with general funds for the state match? I do not support the gas tax because of the high price of gas in rural areas. I feel exception must be made for communities with high prices. JOE PERKINS Good question. We have to come up with $50 million to meet match. It is the Legislature's decision on how to fund. My concern is that we get enough state match so we don't turn federal funds back. SENATOR GARY WILKEN How much would the additional nine cents leverage? JOE PERKINS About $2.5 million for each cent of tax. That will be about $24-25 million add-on. About $50 million total gas tax CO-CHAIR JOHN TORGERSON The TEA-21 only shows and increase in the fund from 41 to 46. Doesn't track with the news releases SENATOR AL ADAMS I had the same question. JOE PERKINS Explanation. CO-CHAIR JOHN TORGERSON Move to next portion of presentation. JOE PERKINS STIP Development Process handout. Explain where we are in the process. We are in the "development of needs" step. We are not redoing, but modifying, STIP for 2000. We still have our same 3 programs. **SOUND SYSTEM MALFUNCTION** Individual road and where they stand. Alaska Highway. The only projects will be rehabilitation projects. Richardson Hwy to Fairbanks. The only projects will be rehabilitation projects. Richardson Hwy past Fairbanks. There are portions that are all out of standard but are our last priority. Glennallen to Valdez. Basically complete. Tok Cutoff. Refer to supplemental approved last year and major improvements made. Tok Junction straight section. Needs shoulders widened. Christochina. This area will have one major project. Tape: SFC - 99 #11, Side A 4:20 PM JOE PERKINS Glenn Highway Seward Hwy. In good shape to the Sterling "Y", past that we need to rebuild all. Snow River. 2 projects. Soldotna to Kenai. Cooper Landing. Next summer. Past Cooper Landing about 8 miles. The road crosses the river about 5 times. We propose staying on the north side of the river. Summarizing priorities. Haines Hwy. Describe areas in need of improvement. Skagway to border crossing. Doesn't meet NHS standards because there are no shoulders. I don't plan to put in shoulders. It is just too big of an undertaking. Dalton HWY. Schedule of planned projects. I want to see the elimination of ungraded rail crossings. We are doing one per year, routing the road over the train tracks. SENATOR PETE KELLY Are you planning to do this in North Pole? JOE PERKINS Paradock 20 is scheduled for next year. Mondarosa is scheduled for next summer. SENATOR RANDY PHILLIPS What about areas along the Dalton Hwy? Tape Malfunction JOE PERKINS Scheduled in the 2000 project. Should be completed in summer of 2000, but it could take longer than one year. SENATOR RANDY PHILLIPS Along the Haines Hwy will our roads be as wide as the sections in British Columbia? JOE PERKINS The shoulders will be. However, they clear a wider right of way than we do, giving a different perspective. There are several reasons why we don't clear as much: economic and environmental reasons. SENATOR RANDY PHILLIPS The Glenn Hwy between Muldon and Eagle River is running thin. Will talk to you later about that project. SENATOR DAVE DONLEY I will add to that the Glenn Hwy to the Seward National Highway. Where does the federal portion of the Seward Hwy actually begin? JOE PERKINS They will be in the STIP and we'll do resurfacing of those roads. CO-CHAIR JOHN TORGERSON Question on the ranking system, do you anticipate change JOE PERKINS Will do public comments again and if we get good reasons we'll change the system. CO-CHAIR JOHN TORGERSON So you are not planning to make any changes at the present? JOE PERKINS No. I could look at if you like. SENATOR DAVE DONLEY We've discussed extensively last year and year before. I would welcome your personal involvement. JOE PERKINS I have been stretched far enough with TEA- 21. CO-CHAIR JOHN TORGERSON Conclude presentation. Announcements for tomorrow's meeting. JOE PERKINS Hand out copy of STIP modification. JOE PERKINS Speak to handout CO-CHAIR JOHN TORGERSON Adjourn 10:50am SENATE FINANCE COMMITTEE LOG NOTES 01/28/99 Page 1
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