Legislature(1999 - 2000)

01/29/1999 09:10 AM Senate FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                                                                                
                                                                                                                                
GENERAL SUBJECT(S): Overview,  Department of Transportation and Public                                                          
Facilities, Statewide Transportation Improvement; Overview, Alaska                                                              
Housing Finance Corporation                                                                                                     
                                                                                                                                
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:  9:10 A.M.                                                                                               
                                                                                                                                
Tape(s):  SFC-99 #13, Sides A and B                                                                                             
                                                                                                                                
                                                                                                                                
PRESENT:                                                                                                                        
                                                                                                                                
                                                                                                                                
Senator Parnell                                                                                                                 
                                                                                                                                
Senator Adams                                                                                                                   
X                                                                                                                               
Senator Torgerson                                                                                                               
X                                                                                                                               
Senator P. Kelly                                                                                                                
X                                                                                                                               
Senator Donley                                                                                                                  
                                                                                                                                
Senator Green                                                                                                                   
                                                                                                                                
Senator Leman                                                                                                                   
X                                                                                                                               
Senator Phillips                                                                                                                
X                                                                                                                               
Senator Wilken                                                                                                                  
                                                                                                                                
                                                                                                                                
ALSO PRESENT:  JOSEPH PERKINS, Commissioner, Department of                                                                      
Transportation and Public Facilities; KURT PARKAN, Deputy                                                                       
Commissioner, Department of Transportation and Public Facilities;                                                               
DENNIS POSHARD, Legislative Liaison, Office of the Commissioner,                                                                
Department of Transportation and Public Facilities; NANCY SLAGLE,                                                               
Director, Division of Administrative Services, Department of                                                                    
Transportation and Public Facilities; DAN FAUSKE, Executive                                                                     
Director, Alaska Housing Finance Corporation; JOHN BITNEY, Alaska                                                               
Housing Finance Corporation; DAVID TEAL, Director, Division of                                                                  
Legislative Finance; FRED FISHER, Fiscal Analyst, Division of                                                                   
Legislative Finance; GINGER BLAISDELL, Fiscal Analyst, Division of                                                              
Legislative Finance, and aides to committee members and other                                                                   
legislative members.                                                                                                            
                                                                                                                                
                                                                                                                                
LOG                                                                                                                             
SPEAKER                                                                                                                         
DISCUSSION                                                                                                                      
000                                                                                                                             
CO-CHAIR TORGERSON                                                                                                              
Convened the meeting.  Noted absent                                                                                             
members.  Asked Commissioner Perkins to                                                                                         
continue departmental overview.                                                                                                 
017                                                                                                                             
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
Was invited to join the committee.                                                                                              
                                                                                                                                
                                                                                                                                
Explains gravel surface and how much they                                                                                       
lose during use.                                                                                                                
                                                                                                                                
                                                                                                                                
Once it is gone it is impossible to retain.                                                                                     
It does not cost much to patch and repair                                                                                       
asphalt.  Most people prefer paved roads.                                                                                       
                                                                                                                                
                                                                                                                                
Each fiscal year in three regions they will                                                                                     
pave a certain amount of roads.                                                                                                 
                                                                                                                                
                                                                                                                                
1999: 65 miles of road to be paved.                                                                                             
                                                                                                                                
Majority of state-owned roads will be paved                                                                                     
in four years with hard surface.                                                                                                
                                                                                                                                
In response to Senator Torgerson,                                                                                               
Commissioner Perkins said these roads were                                                                                      
the most beneficial in reducing maintenance                                                                                     
costs.                                                                                                                          
                                                                                                                                
                                                                                                                                
Commissioner Perkins said they would like                                                                                       
to have these roads transferred to local                                                                                        
governments however there is not much                                                                                           
incentive to do such.                                                                                                           
117                                                                                                                             
SENATOR PHILLIPS                                                                                                                
Asked about the roads and who maintains                                                                                         
them.                                                                                                                           
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
Explained the primary driving factor for                                                                                        
maintaining roads.  A few roads have been                                                                                       
switched to local governments in Kenai and                                                                                      
Mat-Su.  Local governments in general are                                                                                       
not welcoming this program because they                                                                                         
pick up a maintenance cost they don't have.                                                                                     
Winter maintenance in particular scares the                                                                                     
local governments.                                                                                                              
140                                                                                                                             
SENATOR PHILLIPS                                                                                                                
Asked further clarification of the roads                                                                                        
and how the agreements with local                                                                                               
governments worked.  He was concerned about                                                                                     
this.                                                                                                                           
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
This was also a concern of his.  There are                                                                                      
local governments that will not be taking                                                                                       
over their roads.  He wants to take                                                                                             
maintenance off the gravel roads and put it                                                                                     
on paved roads.  He would also like to see                                                                                      
the roads turned over to local governments                                                                                      
in order to minimize departmental costs.                                                                                        
168                                                                                                                             
SENATOR PHILLIPS                                                                                                                
Thinks this system should be put into                                                                                           
effect on all roads in Alaska.  There                                                                                           
should be an incentive provided the local                                                                                       
governments.                                                                                                                    
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
Said there had been incentive for the past                                                                                      
three years.  However, the world of reality                                                                                     
was that no one wanted to take them over.                                                                                       
He was still providing maintenance for                                                                                          
these roads.  The Commissioner said he did                                                                                      
not feel most roads would ever be taken                                                                                         
over.                                                                                                                           
196                                                                                                                             
SENATOR DONLEY                                                                                                                  
Was there such a program last year?                                                                                             
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
This program comes from the CTP program.                                                                                        
                                                                                                                                
SENATOR DONLEY                                                                                                                  
AMATS comes out of CTP?                                                                                                         
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
Yes, it does.                                                                                                                   
                                                                                                                                
SENATOR DONLEY                                                                                                                  
Anchorage roads are far behind the rest of                                                                                      
the State.  He felt that Anchorage has been                                                                                     
subsidizing the rest of the State roads.                                                                                        
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
38.8 percent of the total transportation                                                                                        
program goes to Anchorage.  This did not                                                                                        
include any of the surrounding areas.  (The                                                                                     
Commissioner passed out a chart for the                                                                                         
members to refer to.)                                                                                                           
                                                                                                                                
SENATOR DONLEY                                                                                                                  
Have been very few road projects over the                                                                                       
past few years.  DOT postponed several                                                                                          
projects.  The Anchorage caucus was                                                                                             
interested in the AMATS program.  They                                                                                          
would like to see some sensitivity to their                                                                                     
needs in Anchorage.                                                                                                             
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
Concurred with Senator Donley.  He                                                                                              
explained the program had been broken down                                                                                      
to see where monies were needed most.                                                                                           
Anchorage urban projects take six to seven                                                                                      
years to complete.  Presently they were                                                                                         
looking at a 3-lane highway.  Studies                                                                                           
before a project takes place are very                                                                                           
important.  He specifically referred to the                                                                                     
Anchorage intersections. This was an                                                                                            
ongoing project.  However, they cannot                                                                                          
spend this kind of money now without the                                                                                        
proper study and design. In about three                                                                                         
years there will be projects seen in urban                                                                                      
Anchorage.                                                                                                                      
                                                                                                                                
SENATOR DONLEY                                                                                                                  
Asked for increase from $20 million to $30                                                                                      
million.  This was badly needed monies.  He                                                                                     
felt jobs done by DOT were not done                                                                                             
properly nor completed.  Proper planning                                                                                        
should have been done.  The municipality is                                                                                     
also to blame as they come under AMATS.                                                                                         
There may be some middle ground.                                                                                                
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
Anchorage will also receive $5 million in                                                                                       
TRAAK funds.                                                                                                                    
                                                                                                                                
                                                                                                                                
AMATS (Anchorage Metropolitan Area                                                                                              
Transportation Study), CMAQ (Congestion                                                                                         
Management Air Quality) and TRAAK (Trails                                                                                       
for Access for Alaskans).                                                                                                       
                                                                                                                                
JOHN HORN                                                                                                                       
Invited to join the committee.  He                                                                                              
explained what CMAQ monies could be used                                                                                        
for.  Promotion of the public                                                                                                   
transportation system.  Flow of public                                                                                          
traffic, intersection improvements are also                                                                                     
included.                                                                                                                       
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
City of Fairbanks also receives funds under                                                                                     
CMAQ.  They do not receive as much as                                                                                           
Anchorage, however.                                                                                                             
                                                                                                                                
SENATOR DONLEY                                                                                                                  
Asked about the scoring system.  He felt                                                                                        
the scoring system for urban areas did not                                                                                      
have any waiting period.  This made the                                                                                         
system biased against Anchorage, and                                                                                            
possibly Juneau.                                                                                                                
                                                                                                                                
                                                                                                                                
There was a brief reference to SB 263.                                                                                          
Senator Torgerson was sponsor of the bill                                                                                       
that was passed last year.                                                                                                      
                                                                                                                                
                                                                                                                                
One-fifth volume ranking against use.                                                                                           
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
This was the whole scoring system.  There                                                                                       
will be a separate meeting sometime next                                                                                        
week in order to explain the criteria used                                                                                      
in this system.  He would prefer to defer                                                                                       
any further questions regarding this matter                                                                                     
to that meeting.                                                                                                                
                                                                                                                                
CO-CHAIR TORGERSON                                                                                                              
The Commissioner can answer the question at                                                                                     
this time.  However, he explained to the                                                                                        
committee that the Commissioner would be                                                                                        
back next week to explain the ranking                                                                                           
system and other criteria.                                                                                                      
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
12 to 14 factors were used in the scoring                                                                                       
system. The main question was where does                                                                                        
one put the points.  Questions have been                                                                                        
put out for public comments many times.                                                                                         
DOT has not done this in the dark.  The                                                                                         
department is still welcoming comments,                                                                                         
however, realizes there will be no perfect                                                                                      
system.  He thinks the meeting for Thursday                                                                                     
is good.  Those on "help" side will be                                                                                          
happy, those on the "hurt" side will be                                                                                         
unhappy.                                                                                                                        
                                                                                                                                
SENATOR DONLEY                                                                                                                  
Asked that there be a clear explanation                                                                                         
regarding the fact that Anchorage is so                                                                                         
desperately behind.  He is concerned with                                                                                       
the ranking system being in violation of                                                                                        
statute.  There are Supreme Court decisions                                                                                     
to back this up.  By law it should be under                                                                                     
regulations and not the whim of the                                                                                             
department.  Should not be based on an                                                                                          
internal decision.                                                                                                              
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
Concurred with Senator Donley.                                                                                                  
                                                                                                                                
SENATOR P. KELLY                                                                                                                
Also agreed with Senator Donley.  Does not                                                                                      
want to see this become a popularity                                                                                            
contest with public input.  If everything                                                                                       
were based on population Anchorage would                                                                                        
become Rome and the others would be left                                                                                        
out.                                                                                                                            
                                                                                                                                
SENATOR PHILLIPS                                                                                                                
Does not think Anchorage will become Rome                                                                                       
as those in Anchorage can't even agree                                                                                          
amongst themselves.                                                                                                             
                                                                                                                                
SENATOR TORGERSON                                                                                                               
No one really understands the ranking                                                                                           
system.  The frustration of the public was                                                                                      
because something that makes it through the                                                                                     
Legislature, the Governor signs the bill                                                                                        
and then the department decides not to do                                                                                       
the project.  This did not make any sense.                                                                                      
There needs to be some serious changes in                                                                                       
the ranking system.  Will request                                                                                               
Legislative Legal and Legislative Finance                                                                                       
to be present for the Thursday meeting.                                                                                         
475                                                                                                                             
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
Continued his presentation with the Alaska                                                                                      
Marine Highway System.  The Malaspina was a                                                                                     
success in its first year as a day boat.                                                                                        
They operated 71 days with 541 passengers.                                                                                      
Cabins were put out to bid.  He said this                                                                                       
should work out.                                                                                                                
                                                                                                                                
SENATOR PHILLIPS                                                                                                                
In reference to the success story of the                                                                                        
Malaspina he Will ask in reference to the                                                                                       
road and how it will affect the rest of the                                                                                     
State at the next meeting.                                                                                                      
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
Came in $100,000 under the cost.  This was                                                                                      
a good test.  Day boats do work and                                                                                             
supported a lot of conclusions in the                                                                                           
Southeast day boat plan.  Attendance at the                                                                                     
Haines Fair was up because many could catch                                                                                     
the ferry up and back the same day.                                                                                             
                                                                                                                                
                                                                                                                                
Delivery of the Kennicott proved to be a                                                                                        
success. Unfortunately it received much                                                                                         
publicity as to many little things wrong                                                                                        
with the ferry.  However, he felt this                                                                                          
happened because there was nothing else to                                                                                      
write about.  They should compare the                                                                                           
running record of the Kennicott with the                                                                                        
running of the Columbia when it first came                                                                                      
on line.  He did not feel bad about water                                                                                       
on the deck of the Kennicott because the                                                                                        
new Disney boat also had water on the deck.                                                                                     
Took a trip himself on the Kennicott even                                                                                       
though they did run into some rough water.                                                                                      
Feels the Kennicott can be used on Gulf                                                                                         
trips.                                                                                                                          
                                                                                                                                
                                                                                                                                
The Kennicott has proved to be a vessel                                                                                         
that can be used in Alaska.                                                                                                     
                                                                                                                                
                                                                                                                                
Some challenges he foresees with an                                                                                             
increase in federal mandates for training                                                                                       
in these mandates and compliance.  New                                                                                          
Coast Guard regulations were costing lots                                                                                       
of money to provide training.  He hoped to                                                                                      
use Federal monies.  Another challenge                                                                                          
would be the implementation of the                                                                                              
Southeast Regional plan.  It would                                                                                              
significantly alter the way transportation                                                                                      
is provided.  They will be making use of                                                                                        
more day vessels and smaller vessels                                                                                            
between communities.  At the next meeting                                                                                       
he will explain where the funds are being                                                                                       
used for this implementation.  He noted the                                                                                     
work with the Legislature last year was                                                                                         
paying off.                                                                                                                     
                                                                                                                                
Will also look at the Southwest Marine                                                                                          
system, specifically the Yukon-Kuskokwim                                                                                        
area and what transportation can do.  It is                                                                                     
about 40% complete at this time.  He will                                                                                       
provide data sheets.                                                                                                            
                                                                                                                                
Another plan is the Northwest plan. It will                                                                                     
be the most critical of plans.  They will                                                                                       
look at resources and figure out between                                                                                        
water, land and air as to what can be done.                                                                                     
They want to use the funding in the                                                                                             
demonstration program to do this.                                                                                               
                                                                                                                                
                                                                                                                                
He next went to aviation.  This program is                                                                                      
presently in the same fix as the Marine                                                                                         
Highway was last year.  This is extremely                                                                                       
contentious.  They will run out of money in                                                                                     
March unless another extension is passed.                                                                                       
He does not know what Congressional plans                                                                                       
are.  He thinks they will pass another                                                                                          
extension come March but it is not for                                                                                          
sure.                                                                                                                           
                                                                                                                                
                                                                                                                                
Explained how aviation projects are chosen.                                                                                     
FAA makes the decision not the department.                                                                                      
They can only nominate programs.  This is a                                                                                     
federally operated system.  There is a                                                                                          
separate group in the department to                                                                                             
evaluate aviation projects.  There is                                                                                           
detailed                                                                                                                        
                                                                                                                                
                                                                                                                                
Tape: SFC - 99 #13, Side B    9:40 AM                                                                                           
                                                                                                                                
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
Continued explaining the aviation program.                                                                                      
Not a lot of State money is used in this                                                                                        
program.  FAA requires legislative                                                                                              
authority before they request discretionary                                                                                     
funding.  They will not accept a project                                                                                        
that the Legislature has not approved.                                                                                          
                                                                                                                                
                                                                                                                                
He referred to runway lengths.  They are                                                                                        
sticking with 3,000 feet and are trying to                                                                                      
get lighting for all runways in the State.                                                                                      
There is a lot of critical work that has to                                                                                     
be done on our airports.                                                                                                        
                                                                                                                                
                                                                                                                                
He referred to the International Airport.                                                                                       
The work is on schedule.  Anchorage                                                                                             
International Airport is a very viable                                                                                          
project.  He will be happy to provide                                                                                           
further data on the airport and how                                                                                             
everything stands to date.  Fairbanks has                                                                                       
also done quite well.  There is excellent                                                                                       
management there.  Some VIP projects are                                                                                        
going in.                                                                                                                       
                                                                                                                                
                                                                                                                                
He commented on the deferred maintenance                                                                                        
bill passed by the Legislature for harbors.                                                                                     
Those involved were Seward, Kodiak and                                                                                          
Homer.  Seward had some controversial                                                                                           
problem with users.  There were two public                                                                                      
meetings held.  The transfer from the State                                                                                     
to the city will be made soon.  In Kodiak                                                                                       
the city counsel will vote Feb 11 on taking                                                                                     
their harbor over.  Homer is currently                                                                                          
under the municipal staff review.  There                                                                                        
are no problems but the transfer is just                                                                                        
taking a little longer.  Would like to see                                                                                      
the Juneau harbors transferred along with                                                                                       
many others in the State.  Feels these                                                                                          
transfers are good.                                                                                                             
                                                                                                                                
SENATOR PHILLIPS                                                                                                                
Are local governments cooperative in these                                                                                      
transfers?                                                                                                                      
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
He said they were getting good reactions                                                                                        
from the municipalities.  However, they                                                                                         
want the harbors fixed up before transfers                                                                                      
are made.  Most communities want their own                                                                                      
harbors.                                                                                                                        
                                                                                                                                
SENATOR DONLEY                                                                                                                  
Asked about the harbor budget?                                                                                                  
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
Are not in the budget for this year.                                                                                            
Explained normal harbor maintenance.  It is                                                                                     
a line item in the capital budget.  Will                                                                                        
only cover emergency repairs.  Does not                                                                                         
cover updating required by municipalities                                                                                       
to take them over.                                                                                                              
                                                                                                                                
SENATOR DONLEY                                                                                                                  
Re:  Corp of Engineers                                                                                                          
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
He explained how much money the Corps would                                                                                     
be bringing.                                                                                                                    
                                                                                                                                
                                                                                                                                
Will explain this matter later.  Would like                                                                                     
to continue in presentation on the                                                                                              
Railroad.                                                                                                                       
                                                                                                                                
                                                                                                                                
Alaska Railroad is owned by the State but                                                                                       
not subsidized by the State.  Have about                                                                                        
600 employees.  Railroad is in excellent                                                                                        
situation to keep growing.  Have reinvested                                                                                     
their profit back into the railroad.                                                                                            
Should remain profitable in the foreseeable                                                                                     
future.  This is a passenger railroad.  Has                                                                                     
eligibility in TEA-21.  Have succeeded in                                                                                       
getting funds from the Federal government.                                                                                      
Tie replacement was done because the                                                                                            
Federal government did not do it before                                                                                         
they turned the system over to the State.                                                                                       
                                                                                                                                
                                                                                                                                
They will add new locomotives and replace                                                                                       
ties this year.  Denali Park is going to                                                                                        
get full service depot.  Taxi and rail                                                                                          
service in Fairbanks.  Most curves to be                                                                                        
removed out near the military reserves.                                                                                         
Make possible the commuter service between                                                                                      
Wasilla and Anchorage.  Monies received                                                                                         
from the military.  Haul cruise ship                                                                                            
passengers up to Anchorage to be covered by                                                                                     
a Federal grant.  All airports want rail                                                                                        
service.  This is a good project.  Explains                                                                                     
a lot of work to be done in Whittier.  This                                                                                     
is a real good program and notes the                                                                                            
Railroad will provide necessary information                                                                                     
in their presentation before the committee.                                                                                     
                                                                                                                                
                                                                                                                                
Legislative issues:  International Airport                                                                                      
                                                                                                                                
                                                                                                                                
Requested a bonding number.reduced by $25                                                                                       
million because they wanted to get this                                                                                         
money from FAA.  They did get this money,                                                                                       
however it is over ten years.  They need                                                                                        
the monies this year and next year.  They                                                                                       
are going to request a $25 million bond                                                                                         
from the Legislature to be paid back from                                                                                       
these funds.  Gas tax, 9% increase request.                                                                                     
They will use as much flexibility as                                                                                            
possible.                                                                                                                       
                                                                                                                                
                                                                                                                                
Wants to talk about design.  Not a                                                                                              
legislative bill but important in how their                                                                                     
budget is constructed.  Feels there are                                                                                         
middle ground for discussion.                                                                                                   
                                                                                                                                
                                                                                                                                
Will discuss sunset policies.  Wants to get                                                                                     
old projects off the books from the past                                                                                        
ten years.                                                                                                                      
                                                                                                                                
                                                                                                                                
Refers to Alaska transportation programs                                                                                        
from 1999 and 2000.  These projects will                                                                                        
benefit Alaskans for years to come, even                                                                                        
though this presents such a large                                                                                               
challenge.  They will make a major economic                                                                                     
impact on the State beginning this summer.                                                                                      
                                                                                                                                
SENATOR PHILLIPS                                                                                                                
How much federal dollars for capital                                                                                            
improvements for the railroad as                                                                                                
appropriated.                                                                                                                   
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
Would prefer the question be posed before                                                                                       
the Railroad, however it was a sizeable                                                                                         
amount.                                                                                                                         
                                                                                                                                
CO-CHAIR TORGERSON                                                                                                              
Governor Sheffield will be here in February                                                                                     
for the Railroad presentation.                                                                                                  
                                                                                                                                
SENATOR DONLEY                                                                                                                  
Asked about the Anchorage airport project                                                                                       
with the Railroad terminal.  Where is the                                                                                       
money from?  And who asked for it?  He said                                                                                     
the Anchorage caucus does not want it held                                                                                      
against them.  They feel there are more                                                                                         
important traffic problems to be solved                                                                                         
that they have right now.                                                                                                       
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
This is not coming out of highway monies.                                                                                       
                                                                                                                                
SENATOR DONLEY                                                                                                                  
How is the money coming to the project?                                                                                         
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
Coming directly from FRA to the Railroad.                                                                                       
They are only making sure the project fits                                                                                      
into their plans.  This project will help                                                                                       
DOT on their airport project because it                                                                                         
will give them one more tunnel.                                                                                                 
                                                                                                                                
SENATOR DONLEY                                                                                                                  
Will this show up in the STIP?                                                                                                  
                                                                                                                                
COMMISSIONER                                                                                                                    
PERKINS                                                                                                                         
No, it will not.                                                                                                                
                                                                                                                                
CO-CHAIR TORGERSON                                                                                                              
Thanks commissioner Perkins                                                                                                     
                                                                                                                                
                                                                                                                                
10:20 a.m.  Co-chair Torgerson recessed for                                                                                     
approximately three minutes.  Tape number                                                                                       
1, Side B at log number 357.                                                                                                    
                                                                                                                                
CO-CHAIR TORGERSON                                                                                                              
Reconvened the meeting.                                                                                                         
                                                                                                                                
DAN FAUSKE                                                                                                                      
Invited to join the committee.  Explains                                                                                        
AHFC projects for the next year.  Budget                                                                                        
request reflects AHFC policies.  Have                                                                                           
established specific criteria.  AHFC plays                                                                                      
major role in State housing.                                                                                                    
                                                                                                                                
                                                                                                                                
(Brief tape malfunction log number 387 to                                                                                       
364 countdown on side B.)                                                                                                       
                                                                                                                                
                                                                                                                                
All communities around the State reported                                                                                       
healthy recovery.  Personally proud of                                                                                          
accomplishments over the last four years.                                                                                       
Offers lowest interest rates to Alaska                                                                                          
homebuyers.                                                                                                                     
                                                                                                                                
Streamlined paperwork process for loan                                                                                          
applications.  Provide workshops for                                                                                            
purchasers and also for builders.                                                                                               
                                                                                                                                
Explains urban and rural loans.  Staff                                                                                          
processed re-finance loans.  Increase                                                                                           
activity in multi-family loans.  This is a                                                                                      
more popular program AHFC is offering                                                                                           
around the State.                                                                                                               
                                                                                                                                
Amendment to front section may be requested                                                                                     
for increase of loans.  Commercial paper                                                                                        
program returned to domestic from foreign.                                                                                      
HUD recognizes them of leading in the U.S.                                                                                      
                                                                                                                                
                                                                                                                                
AHFC received upgrade on bond rating.  They                                                                                     
had been penalized for years.  Commends                                                                                         
Legislature and Governor for making this                                                                                        
possible.                                                                                                                       
                                                                                                                                
                                                                                                                                
Working very hard to maintain good record.                                                                                      
$36 million requested for FY 2000 and                                                                                           
explains the breakdown.  Three positions                                                                                        
for mortgage department to keep up with                                                                                         
loan program.  One position for Gateway in                                                                                      
Anchorage to help provide training to be                                                                                        
funded by Federal HUD dollars.                                                                                                  
                                                                                                                                
CO-CHAIR TORGERSON                                                                                                              
Asks cash flow and assets be explained.                                                                                         
                                                                                                                                
MR. FAUSKE                                                                                                                      
Many funds restricted because they are                                                                                          
operating cash.  They do not have taxing                                                                                        
authority.  Must have adequate fund                                                                                             
balances that allow them to move in and out                                                                                     
of the market.  They do have cash on hand                                                                                       
which allowed them to go into the market on                                                                                     
their most recent bond.                                                                                                         
                                                                                                                                
                                                                                                                                
Do well on their loan activity.                                                                                                 
                                                                                                                                
CO-CHAIR TORGERSON                                                                                                              
Needs more data on this but will not take                                                                                       
up committee time.                                                                                                              
                                                                                                                                
MR. FAUSKE                                                                                                                      
Will provide the co-chair with requested                                                                                        
information.                                                                                                                    
                                                                                                                                
SENATOR PHILLIPS                                                                                                                
Re:  slowdown in request for loans.  Feels                                                                                      
this is barometer of the economy.  However                                                                                      
recognizes this is January.                                                                                                     
                                                                                                                                
MR. FAUSKE                                                                                                                      
Have been following oil prices carefully                                                                                        
and latest situation of British Petroleum                                                                                       
layoff of approximately 600 employees.                                                                                          
Will furnish information to Senator                                                                                             
Phillips office as soon as possible.                                                                                            
                                                                                                                                
SENATOR PHILLIPS                                                                                                                
Refers to sister working in credit office                                                                                       
and feels this could be a critical                                                                                              
situation.  AHFC will be first indicator of                                                                                     
this situation.                                                                                                                 
                                                                                                                                
SENATOR DONLEY                                                                                                                  
Subsidy or discount less than the going                                                                                         
rate for certain communities in the State                                                                                       
and not others.  List of communities that                                                                                       
this applies to.  Is cut-off at 1,400?                                                                                          
                                                                                                                                
JOHN BITNEY                                                                                                                     
It is 1,600 and no accessible by rail or                                                                                        
road.                                                                                                                           
                                                                                                                                
SENATOR DONLEY                                                                                                                  
Poor folks in Anchorage, Fairbanks or                                                                                           
Juneau may not be able to qualify?  This is                                                                                     
inequitable.  Should be based on need and                                                                                       
not where one lives.  Requests spreadsheet                                                                                      
reflecting this information.                                                                                                    
                                                                                                                                
MR. FAUSKE                                                                                                                      
AHFC builds up arbitrage and explains how                                                                                       
it must be used.  If exceeds the rate must                                                                                      
be reimbursed to the Federal government.                                                                                        
Actual cost on favorable side for AHFC                                                                                          
however if they do not use the monies they                                                                                      
leave the State.                                                                                                                
                                                                                                                                
                                                                                                                                
Can provide information as to how loan                                                                                          
works.                                                                                                                          
                                                                                                                                
SENATOR DONLEY                                                                                                                  
May want to apply left over arbitrage to                                                                                        
another program.                                                                                                                
                                                                                                                                
MR. FAUSKE                                                                                                                      
Have provided extra funds in Anchorage and                                                                                      
Fairbanks; also the North Slope.                                                                                                
                                                                                                                                
SENATOR DONLEY                                                                                                                  
What would it cost to expand some of the                                                                                        
other programs into other areas?  He cited                                                                                      
AS 18.56.420(a).                                                                                                                
                                                                                                                                
MR. FAUSKE                                                                                                                      
Have not done much taxable work, however                                                                                        
there is a great need.  Great deal of                                                                                           
discussion to expand savings benefits to                                                                                        
all programs in the State and he supports                                                                                       
this concept.  He is looking into federal                                                                                       
reins attached to some loan programs.  Will                                                                                     
report as they are trying to fast track                                                                                         
this also.  They are currently at about 30%                                                                                     
of the market.  Want to be able to compete                                                                                      
more to keep dollars in Alaska.                                                                                                 
                                                                                                                                
He explained They were the tax-exempt side.                                                                                     
Have been analyzing this for some time.                                                                                         
070                                                                                                                             
SENATOR WILKEN                                                                                                                  
Asks explanation of homeownership.  Asks                                                                                        
for data to be provided.                                                                                                        
                                                                                                                                
MR. FAUSKE                                                                                                                      
Uses data from Department of Labor and will                                                                                     
supply information to the committee.                                                                                            
                                                                                                                                
JOHN BITNEY                                                                                                                     
Invited to join the committee.                                                                                                  
                                                                                                                                
                                                                                                                                
All programs operated at the level they                                                                                         
were approved.  Homeless, weatherization                                                                                        
funds being requested at same level as                                                                                          
always.  Public housing and renovation have                                                                                     
different projects.  Showing more than the                                                                                      
total of last year.  This may be because                                                                                        
they were not funded in prior years.                                                                                            
                                                                                                                                
                                                                                                                                
In response to Senator Torgerson, only new                                                                                      
program energy efficiency program.  Trying                                                                                      
to come up with new standards as mandated                                                                                       
by law.                                                                                                                         
                                                                                                                                
MR. FAUSKE                                                                                                                      
Would like to see more testing done in                                                                                          
Alaska.  Fairbanks represents the best area                                                                                     
to test according to scientists.                                                                                                
                                                                                                                                
Tape: SFC - 99 #14, Side A    9:40 AM                                                                                           
                                                                                                                                
                                                                                                                                
MR. BITNEY                                                                                                                      
Continues comments to committee.                                                                                                
                                                                                                                                
Re:  low-income senior housing facility in                                                                                      
Fairbanks and the Riverbend school in                                                                                           
Juneau.                                                                                                                         
                                                                                                                                
MR. FAUSKE                                                                                                                      
Closing comments.  Contacted by Union Labor                                                                                     
Life Insurance.  Wanted to know if they are                                                                                     
interested in purchasing the building they                                                                                      
are in.  Has notified Legislature this                                                                                          
offer was made to them.  Would provide a                                                                                        
savings for them.  Presently in lease                                                                                           
situation.  However, situation must be                                                                                          
analyzed. Vacancy rate for commercial is                                                                                        
only at 2% in Anchorage.  If AHFC does not                                                                                      
own it some other Alaska firm should.                                                                                           
                                                                                                                                
SENATOR DONLEY                                                                                                                  
Real tough time with the capital budget                                                                                         
this year.  Asks impact of spreading out                                                                                        
some of the phasing on projects.  Would                                                                                         
there be any options?                                                                                                           
                                                                                                                                
MR. FAUSKE                                                                                                                      
Will provide breakdown.                                                                                                         
                                                                                                                                
SENATOR DONLEY                                                                                                                  
Perhaps this could be done over several                                                                                         
years rather than all at once.                                                                                                  
                                                                                                                                
SENATOR TORGERSON                                                                                                               
Thanked AHFC for their presentation.  Next                                                                                      
meeting for Monday regarding Y2K at 9:00                                                                                        
a.m.                                                                                                                            
                                                                                                                                
                                                                                                                                
Adjourned meeting at approximately 10:51                                                                                        
a.m.                                                                                                                            
                                                                                                                                
SENATE FINANCE COMMITTEE                                                                                                        
LOG NOTES                                                                                                                       

01/29/99 SFC-99 12 01/29/99

Document Name Date/Time Subjects