Legislature(2015 - 2016)SENATE FINANCE 532
02/26/2015 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Juneau Access | |
| Presentation: Ambler Road | |
| Presentation: Knik Arm Bridge and Toll Authority (kabata) | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE
February 26, 2015
9:05 a.m.
9:05:12 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:05 a.m.
MEMBERS PRESENT
Senator Anna MacKinnon, Co-Chair
Senator Pete Kelly, Co-Chair
Senator Peter Micciche, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Mark Luiken, Commissioner, Department of Transportation and
Public Facilities; Gary Hogins, Manager, Juneau Access
Project, Department of Transportation and Public
Facilities; Judy Dougherty, Executive Director, Knik Arm
Bridge and Toll Authority, Department of Transportation and
Public Facilities.
PRESENT VIA TELECONFERENCE
Mark Davis, Chief Infrastructure Development Officer,
Alaska Industrial Development and Export Authority (AIDEA).
SUMMARY
PRESENTATION: JUNEAU ACCESS
PRESENTATION: KNIK ARM BRIDGE AND TOLL AUTHORITY (KABATA)
PRESENTATION: AMBLER ROAD
^PRESENTATION: JUNEAU ACCESS
9:06:44 AM
MARK LUIKEN, COMMISSIONER, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES, (DOT/PF) announced that he would be
addressing the Juneau Access project and the Knik Arm
Bridge. He discussed the PowerPoint, "Alaska Department of
Transportation and Public Facilities, Juneau Access
Improvement Project" (copy on file).
Co-Chair MacKinnon announced that there was an
administrative order that asked departments to hold several
megaprojects that were approved by past legislatures. She
shared that the conversation was intended to understand how
the current administration would move forward in assessing
the value of the projects, and whether there are ways to
prioritize the projects. Commissioner Luiken replied that
he would address the prioritization of the projects at the
end of the presentation.
Commissioner Luiken looked at slide 2, "Purpose and Need":
To provide improved surface transportation to and from
Juneau within the Lynn Canal corridor that will:
•Provide the capacity to meet transportation
demand in the corridor
•Provide flexibility and improve opportunity for
travel
•Reduce travel times between the communities
•Reduce State costs for transportation in the
corridor
•Reduce user costs for transportation in the
corridor
Commissioner Luiken highlighted slide 3, "Alternatives":
8 alternatives analyzed:
•Alt. 1- No Action
•Alt. 1B - Enhanced Service with Existing AMHS
Assets
•Alt. 2B - (Draft SEIS Identified Preferred) East
Lynn Canal Hwy to Katzehin, Shuttles Katzehin to
Haines and Skagway
•Alt. 3 - West Lynn Canal Hwy - Shuttle Berners
Bay to William Henry Bay
•Alt. 4A - Fast Vehicle Ferry, Service from Auke
Bay
•Alt. 4B - Fast Vehicle Ferry, Service from
Berners Bay
•Alt. 4C - Conventional Monohull, Service from
Auke Bay
•Alt. 4D - Conventional Monohull, Service from
Berners Bay
Commissioner Luiken looked at slide 4, "Alternative 1: No
Action." He remarked that there would be two new Alaska
class ferries, even with the particular alternative. The
Haines, Skagway, and Auke Bay ferry terminal need
modifications to align with the new "roll on, roll off
feature" of the new Alaska class ferries.
9:11:21 AM
Co-Chair MacKinnon remarked that the state was paying $115
million for operations of all roads, and a separate $115
million for marine highway, which served a very different
population. She did not intend to diminish the need for the
services, but noted the remarkable cost difference. She
stressed that the need for the road was intended to reduce
state costs for transportation in the corridor. She
wondered if there was an evaluation of the cost need for
this project. Commissioner Luiken replied in the
affirmative. He stated that it was part of the overall of
the analysis. He explained that there was an examination of
the initial capital cost related to any alternative, and an
evaluation of the long-term cost to the state in both
operating and residents of Alaska.
Co-Chair MacKinnon expressed concern over the cost of the
need to modify the ferry terminals. She wondered if the
modification costs were considered. Commissioner Luiken
responded in the affirmative, and stated that the costs
were included in the detailed analysis later in the
presentation.
Commissioner Luiken discussed slide 5, "Alternative 1B." He
stated that this alternative was requested by the courts,
as a result of the litigation from 2008. The 9th District
Court found that the state did not fully study and enhanced
ferry service option. He stated that Alternative 1B
included an enhanced ferry service and a discounted rate
for that ferry service in an effort to stimulate greater
use of the system. He remarked that that this alternative
required a ferry terminal modification.
Commissioner Luiken displayed slide 6, "Alternative 2B." He
announced that Alternative 2B was the current preferred
alternative, both in the 2006 Environmental Impact
Statement (EIS) and the most recent draft supplemental EIS
from September 2014. This alternative would extend the
Glacier Highway 48 miles on the east side of the Lynn Canal
to the Katzihin area. A ferry terminal would be built in
that area, and ferry service to Haines and Skagway would
operate from that terminal.
Vice-Chair Micciche wondered if the eventual goal would be
to connect directly to the road system. Commissioner Luiken
that it was an alternative in the original EIS. He shared
that there was national park property near Skagway, and it
was determined that the hurdles for building a road was too
great.
9:16:37 AM
Senator Hoffman wondered why there was a bridge over the
Katzihin, and only add a couple of miles of road. He felt
that the bridge would be a large expenditure, so he asked
if there was possibly some rugged terrain that did not
allow for a terminal to be built before the river.
Commissioner Luiken replied that it was a terrain issue. He
believed that the south side of the Katzihin did not allow
for a practical location for a ferry terminal.
Commissioner Luiken addressed slide 7, "Alternative 3."
stated that the alternative was not much different than 2B,
except that the road was on the west side of the Lynn Canal
extending to Haines. A ferry terminal would then be built
in Saw Mill Cove in Berners Bay, and another terminal in
William Henry Bay.
Commissioner Luiken stated that the next four alternatives
were a variation of fast ferries and main line ferries, or
the Alaska class ferries and main line ferries either
between Auke Bay, Haines, and Skagway; or between Saw Mill
Cove, Haines, and Skagway.
Commissioner Luiken discussed slide 8, "Alternative 4A." He
stated that this alternative was the fast ferry option
between Auke Bay, Haines, and Skagway.
Commissioner Luiken highlighted slide 9, "Alternative 4B,
Summer and Winter." He stated that the southern terminus
was Saw Mill Cove, so the fast ferries would be used to
Haines and Skagway.
Commissioner Luiken addressed slide 10, "Alternative 4C."
This option would run between Auke Bay, Haines, and Skagway
with the Alaska class ferries.
Commissioner Luiken discussed slide 11, "Alternative 4D,
Summer and Winter." This option would use the Alaska class
ferries between Saw Mill Cove, Haines, and Skagway.
Commissioner Luiken looked at slide 12, "Cost Factors." He
shared that the chart showed the initial construction
costs, total project life costs, estimated net annual state
GF maintenance and operation, state net cost per vehicle,
total out-of-pocket user cost one way from Juneau to
Skagway, and total out-of-pocket user costs one way from
Juneau to Haines.
Co-Chair MacKinnon noted that the out-of-pocket costs were
applied in the net portion of the state general fund,
because the potential revenue was subtracted from fares
against the operating costs. Commissioner Luiken agreed. He
stressed that it was a net projected cost minus revenue.
Commissioner Luiken highlighted slide 13, "Project
History":
•In 1992 the project was initiated
•In 1997 FHWA issued a Draft Environmental Impact
Statement (EIS) for the project
•In 2000 Governor Knowles declared Alternative 2, an
East Lynn Canal Highway, the State's preferred
alternative but suspended work on the project and
ordered construction of 2 fast vehicle ferries
•In 2002 Governor Murkowski directed that the EIS be
completed
•A Supplemental Draft EIS was released in 2005, with a
Final EIS in January 2006 stating the East Lynn Canal
Highway as the Preferred Alternative
•A Record of Decision (ROD) was issued by FHWA in
April 2006.
•In August 2006 a lawsuit was filed in District Court
9:22:30 AM
Commissioner Luiken addressed slide 14, "Project History,
Continued":
•In February 2009 the District Court ruled on one
count and vacated FHWA's ROD concluding that FHWA
failed to consider an alternative for improved ferry
service using existing ferries and terminals.
•DOTandPF appealed to the U.S. Court of Appeals for
the 9th Circuit in May 2011. The three judge panel
ruled 2-1 to uphold the District Court decision.
•As a result the DOTandPF and FHWA initiated
preparation of a Supplemental EIS in January 2012.
•Public review and comment period of Draft
Supplemental EIS closed November 25, 2014.
•DOT/PF Corps of Engineers (COE) 404/Section 10 permit
application public/agency review closed January 31,
2015.
Commissioner Luiken looked at slide 15, "Draft Supplemental
EIS":
Assess:
Court mandated new alternative that improves
marine ferry service in Lynn Canal using existing
AMHS assets, identified as Alternative 1B
Updates the 2006 Final EIS:
Reassessing the reasonable alternatives,
including
•Any changes to regulations
•Updated analysis
•Alternative revisions necessary to address
new environmental and engineering
information available since the 2006 ROD
Commissioner Luiken addressed slide 16, "Current Project
Status."
Sufficient funds are encumbered to complete the Final
EIS/ROD (estimated cost of $800,000)
Administrative Order No. 271
-Administration is currently reviewing Juneau
Access Project status
-Project staff are reviewing comments received on
the Draft Supplemental EIS
Co-Chair MacKinnon felt that, based on cost, the
appropriate alternative, 2B, was already selected by the
state. Commissioner Luiken agreed. He stated that 2B was
selected because of the lower cost.
Co-Chair MacKinnon wondered if there would be a discussion
regarding the other factors that an EIS may consider in
choosing a preferred route, in addition to cost.
Commissioner Luiken agreed to provide that information.
Co-Chair MacKinnon queried other factors that may
contribute to the selection outside of cost, and the
magnitude that criteria may be used in the decision.
Commissioner Luiken deferred to Mr. Hogins.
9:25:36 AM
GARY HOGINS, MANAGER, JUNEAU ACCESS PROJECT, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES, explained that the
evaluations of the alternatives took into account the
purpose and needs; and the EIS. He shared that the EIS
evaluated the socioeconomic and natural environment of all
alternatives. The EIS was weighed against the purpose and
need, and the preferred alternative was determined by that
comparison. He stated that there was a draft preferred
alternative, but required an assessment of all of the
comments. The evaluation of the extensive comments and
fiscal picture of the state fiscal situation would be
determined before the final draft alternative.
Senator Hoffman wondered if the administration was mandated
to conduct the assessment, or was the legislature included
in the mandate. Mr. Hogins asked for a restatement of the
question.
Senator Hoffman noted that the court mandated an assessment
of the review of the access alternatives for the project.
He wondered if the mandate was strictly for the
administration, or did the mandate include the legislature.
Commissioner Luiken responded that the court order was
mandated to the Federal Highway Administration.
Senator Hoffman asked if the mandate was met by the Federal
Highway Administration, and whether there was a requirement
for the state to review the mandate. Commissioner Luiken
responded that the mandate was complete when the Federal
Highway Administration issued a record of decision on the
supplemental EIS. He furthered that the interim would allow
for a review of the supplemental EIS, and allow individuals
to comment on the results of the draft supplemental EIS.
Senator Olson recalled that the 2006 lawsuit was against
the Federal Highway Administration, and the state was not
the defendant. Commissioner Luiken agreed.
Co-Chair Kelly asked for a restatement of Senator Olson's
comment.
Senator Olson wanted to ensure that any entity in the state
was not named as a defendant in the 2006 lawsuit.
Co-Chair MacKinnon asked for a restatement of the answer to
Senator Olson's comment. Commissioner Luiken replied that
he agreed with Senator Olson's comment.
9:29:56 AM
Vice-Chair Micciche looked at Alternative 3, with the
bridge from Pyramid Harbor to Pyramid Island. He wondered
if crossing the east fork of Chilkoot Inlet was an option
that was removed because of environmental concerns. He felt
that there would be reduced costs. He remarked that the
long-term operating costs would be dramatically reduced
with the absence of a ferry requirement. Commissioner
Luiken wondered if Vice-Chair Micciche was commented on
continuing north from the current 2B terminus to Skagway.
Vice-Chair Micciche wondered if there was a potential for a
crossing before the river that would allow for a road-to-
road option. He felt that the ultimate goal should be the
elimination of the requirement for any ferry service.
Commissioner Luiken agreed that long-term costs would be
significantly less with a road-to-road option. He stressed
that the EIS made it difficult to determine a road-to-road
option a valid alternative.
Vice-Chair Micciche surmised that the environmental impact
of crossing the west fork of the Chilkat Inlet was
environmentally possible, but the east fork was not
environmentally possible.
9:33:02 AM
AT EASE
9:35:17 AM
RECONVENED
9:35:20 AM
Co-Chair MacKinnon looked at Alternative 2B. She asked
Vice-Chair Micciche to point to his specific concern on the
map.
Vice-Chair Micciche remarked that many people are concerned
about why there was not a road-to-road option. He noted
that Alternative 2B provided a crossing. He queried the
possibility that would allow for a road-to-road option.
Commissioner Luiken responded that building the bridge on
the west side would be a lesser undertaking, because it was
primarily mud flats. Building a bridge across the east
channel would be very significant to the point of probably
a pontoon bridge, which probably would not be a viable
option.
Vice-Chair Micciche remarked that the Lake Union Bridge in
Seattle was a pontoon bridge used by very heavy traffic. He
felt that Juneau should be connected to the road system at
some point.
Co-Chair MacKinnon remarked that Lynn Canal had very heavy
winds, so the alternatives must be safe options.
Commissioner Luiken highlighted slide 17, "Current Project
Schedule":
•Final EIS/ROD: Early 2016
•Request for injunction relief: Follows Final EIS/ROD
•Corps of Engineers Permit: Follows injunction relief
•Forest Service easement: Follow injunction relief
•First construction contract: As early as FY16
(providing no legal challenge)
Co-Chair MacKinnon remarked that there was a concern that
the budget of $3.7 billion short. She noted that there were
GF moneys available to complete the EIS. Commissioner
Luiken agreed.
Co-Chair MacKinnon wondered how many national highways were
recognized in the state. Commissioner Luiken replied that
he believed that there were 9 major highways that were
recognized in the National Highway System. He announced
that the marine highway system was considered part of the
National Highway System.
Co-Chair MacKinnon asked if that was a new recognition.
Commissioner Luiken replied in the affirmative.
Co-Chair MacKinnon understood that the Juneau Access
Project would use national highway dollars. She stated that
part of the federal allocation each year would be used to
advance the project. Commissioner Luiken agreed.
9:40:09 AM
Co-Chair MacKinnon wanted to understand the maintenance
requirements for the national highway roads in Alaska. She
wondered if the federal funds could be used for maintenance
on those roads. Commissioner Luiken remarked that the
federal funds were primarily for capital projects. The
funds were not used for maintenance and operations.
Co-Chair MacKinnon wondered how the marine highways became
national highways. Commissioner Luiken replied that they
were recognized with part of the current federal highways
bill, Map 21, passed in 2012.
Co-Chair MacKinnon wondered if federal highways funds could
be used for ferry replacement. Commissioner Luiken replied
in the affirmative.
Senator Olson wondered how Juneau Access Road would affect
the entire state. Commissioner Luiken replied that it would
increase the cost to maintain and operated the section of
highway. It would also, reduce the cost to maintain and
operate that portion of the ferry system. The intention was
to run a day boat rather than a main line ferry.
Senator Olson surmised that the road would cause an
increase in operation and maintenance costs. Commissioner
Luiken agreed. He remarked that adding capacity to the road
system adds to the operations and maintenance costs.
Senator Olson noted that there was a $5 million request for
completion of the highway. He wondered if there was still
another $300 million to complete the project. Commissioner
Luiken responded that the $9 million was GF, and would
bring the total GF money appropriated for the project to
$57 million. That total money could be used as match for
the total project of $574 million. The $220 million
mentioned was authorization to spend federal receipts on
the project.
9:44:00 AM
Senator Dunleavy wondered if a toll concept was considered
for the road. Commissioner Luiken replied in the negative.
Senator Dunleavy asked if a toll could be considered for
the road. Commissioner Luiken responded that a toll was an
option for any of the state highway systems.
Senator Dunleavy felt that a toll should be considered,
given the current fiscal climate. He wondered what if the
money needed to be paid back, if the money could shift to
other projects, or if the money could be held for a year,
if the project does not move forward. Commissioner Luiken
responded that the funds were encumbered to bring the
project to a record of decision. At that point, the state
did not go forward immediately on the project. The Knik Arm
crossing already had a record of decision, and the right-
of-way portion of the project allowed for 20 years before
initial construction.
Senator Dunleavy surmised that there was still time on the
projects. Commissioner Luiken agreed.
Senator Dunleavy opined that the state would not be
penalized or lose money while waiting a year to move
forward on the projects. Commissioner Luiken responded that
stopping the Juneau Access Project, without a record of
decision, could cause the state to be liable for up to $26
million. He furthered that the state did not have to spend
money beyond the record of decision.
Senator Dunleavy surmised that the state would only
"possibly" be required to return the $26 million to the
federal government. Commissioner Luiken replied that the
Federal Highways administrator had verbally communicated
that stopping the project completely would cause the state
to return the $26 million to the federal government.
Senator Dunleavy wondered if there was a difference between
"stop" and "delay." Commissioner Luiken replied that the
state could complete the record of decision, and then there
was 10 years before the next step must be taken.
Senator Dunleavy remarked that the state did not currently
have more funding for the project. He queried the absolute
repercussions for not funding the projects in the current
budget. Commissioner Luiken agreed to provide that
information.
Co-Chair Kelly wondered how much GF money was required for
the record of decision. Commissioner Luiken responded that
$800,000 was already encumbered.
9:48:50 AM
Co-Chair MacKinnon supported the completion of the process
to avoiding paying back the federal government, and to
ensure that there was 10 years to examine the project. She
surmised that the money was already available for that
option. Commissioner Luiken agreed. He remarked that the
$800,000 was federal aid money. He stressed that the record
of decision did not require any additional state funds.
Co-Chair MacKinnon reiterated her support of reaching the
record of decision.
Vice-Chair Micciche wondered if obtaining a record of
decision would require additional state spending above the
$26 million. Commissioner Luiken replied that it depended
on the record of decision.
Vice-Chair Micciche wondered if there was any scenario that
would allow for payback of less money rather than following
through with a record of decision. Commissioner Luiken
agreed to provide that information.
Co-Chair Kelly surmised that the state did not need to pay
any more money to reach the record of decision. He queried
the amount of money in GF to make the road happen, if there
was a record of decision for Alternative 2B. Commissioner
Luiken looked at the slide titled, "Cost Factors." He noted
that the construction cost for 2B was $574 million for
construction. He stated that 10 percent of the $574 million
was state match funds. There was already $48 million in GF
already appropriated for the project, so there was roughly
$9.4 million of GF to meet the match requirement for the
construction costs.
Co-Chair Kelly surmised that there was only $9 million
remaining for the state. Commissioner Luiken responded that
the $9 million would get to construction.
Co-Chair Kelly queried the remaining funds from current
time until cars would operate on the road. Commissioner
Luiken replied that the total was $574 million.
Co-Chair Kelly queried the remaining GF funds required to
get cars on the road. Co-Chair MacKinnon further surmised
that there was 10 percent remaining, depending on the cost
estimates. Commissioner Luiken replied that $574 million
was the DOT/PF estimate of the total cost.
Co-Chair Kelly wondered approximately how much more GF
money was required from the current moment until cars could
operate on the road. Mr. Hogins replied that there was $48
million in hand. The ratio required another $52 million, so
the balance would be $4 million.
9:53:22 AM
Co-Chair Kelly wondered approximately how much more GF
money was required from the current moment until cars could
operate on the road. Mr. Hogins replied that 10 percent of
the $574 million would be approximately $52 million. The
balance would be $4 million.
Co-Chair Kelly asserted that the state would be required to
pay an additional $4 million in GF. Mr. Hogins agreed. He
stated that the construction would be phased over six to
eight years.
Co-Chair MacKinnon remarked that the project would be
substantially by the federal government. The state already
appropriated most of the money for the project. She
remarked that the numbers would be refined over time, so
the state would be responsible for that difference.
Commissioner Luiken agreed.
Vice-Chair Micciche stated that the project would spend a
half a billion dollars for a shorter ferry ride. He wanted
to understand how and why the administration would support
that project. Commissioner Luiken replied that he was
focused on the current preferred alternative. He stressed
that the administration had not made a decision on a
preferred alternative beyond the draft.
Co-Chair MacKinnon stressed that the issue had passionate
opinions on both sides of the issue. She understood that
many people wanted to protect the environment. She
furthered that the legislature wanted to protect the GF
dollars, and how the federal and state resources were
utilized.
Senator Dunleavy wondered if unused federal road money for
the project could be shifted other road projects in the
state. Co-Chair MacKinnon responded that the money would go
through a reappropriation process, and the federal
government would amend the state plan.
^PRESENTATION: AMBLER ROAD
9:58:54 AM
MARK DAVIS, CHIEF INFRASTRUCTURE DEVELOPMENT OFFICER,
ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY (AIDEA)
(via teleconference), introduced himself.
9:59:06 AM
AT EASE
10:00:00 AM
RECONVENED
Mr. Davis looked at the document titled, "Alaska Industrial
Development and Export Authority (AIDEA) Ambler Mining
District Industrial Access Road (AMDIAR) EIS Project" (copy
on file).
AIDEA's Ambler Mining District Industrial Access Road
(AMDIAR) Environmental Impact Statement Project was
designed to obtain a permit for the construction of
transportation access to the Ambler Mining District.
The State selected lands in the Ambler Mining District
for their mineral resource value and negotiated for
access across Gates of the Arctic National Preserve as
part of the Alaska National Interest Lands
Conservation Act which states that "the Secretary [of
Interior] shall permit such access…" (ANILCA Sec.
201(4)(b))
Status under Administrative Order 271
- AIDEA was in the process of filing for an EIS
when the Governor issued Order 271.
- At present, the project is on hold.
- Consistent with the Order, AIDEA has taken
steps to preserve the environmental base line
data that has been collected since 2010--first by
DOT/PF and, since the middle of 2013, by AIDEA.
What has been Spent
- To date, DOTandPF spent $9.25 million on the
EIS project.
- AIDEA has spent another $7.3 million with
another $1.7 million committed.
- AIDEA has approximately $8 million remaining.
- If AIDEA does not file for an EIS, it could
return between $7 million to $8 million to the
Treasury.
- If a decision was made to continue with the
EIS, AIDEA would need $6.8 million in additional
funds to reach a Record of Decision stage on the
EIS.
- If the EIS were filed for in the current fiscal
year, then additional funding would probably be
needed in Fiscal year 2017.
- An EIS is needed before any project of this
type can be planned or financed.
- An EIS would identify the potential benefits
and environmental effects of the project and
solicit comments from a variety decision makers
(the State, AIDEA, federal agencies, local
communities, and private landowners) as to
whether the road should be build. This would
include an analysis of a "no build" alternative.
Financing Model for AMDIR After an EIS
- If an EIS was obtained, AIDEA is proposing to
develop AMDIAR using a Public-Private Partnership
(P3) model. No general funds would be sought for
financing the road.
- AIDEA had proposed to complete the
environmental review of AMDIAR with the federal
agencies (develop the Environmental Impact
Statement), and then work to develop a P3 entity
to develop and operate the road.
- AIDEA's model is the Delong Mountain
Transportation System (DMTS) the industrial road
and port that support the Red Dog Mine.
- AIDEA proposes to initially construct a
seasonal pioneer road that would provide needed
access for exploration and development while
minimizing costs of construction and maintenance.
The pioneer road costs is currently estimated at
$234 million. The road would be upgraded to a
year-round road only if and when the level of
activity in the District is sufficient to support
the additional cost.
- By statute, AIDEA would have to make a return
on its investment on an industrial road.
Senator Olson wondered why the EIS process had not started.
He recalled that there was an appropriation of $8.5 million
in FY 14, and another $8 million was appropriated in FY 15
for the EIS process. Mr. Davis replied that there was a
draft notice to file the EIS, and it was delivered to the
Corps of Engineers. The governor delivered the
administrative order at the exact moment the EIS would have
occurred.
Senator Olson asked why the EIS was not begun before the
administrative order. Mr. Davis replied that the field
studies needed to be complete before filing for the EIS.
10:05:54 AM
Senator Olson wondered if the field study was made public.
Mr. Davis replied in the affirmative.
Senator Olson queried the date of the beginning of the EIS.
Mr. Davis responded that the EIS would begin, if they
received permission to move forward. He remarked that there
was an additional $6.8 million to reach the record of
decision. Approximately $10 million would be paid for a
third party contractor for the Corps of Engineers. He
stressed that it was a necessary process of an EIS.
Senator Olson expressed frustration related to why the EIS
was not started, in spite of the over $16 million
appropriation.
Senator Bishop surmised that there was a contract with the
National Park Service to conduct the caribous study. Mr.
Davis replied in the affirmative.
Senator Bishop recalled that the National Park Service
stated that there would be no impact on the caribou herd
from the road construction. Mr. Davis responded that there
would be limited impact on the caribou herd.
^PRESENTATION: KNIK ARM BRIDGE AND TOLL AUTHORITY (KABATA)
10:09:03 AM
JUDY DOUGHERTY, EXECUTIVE DIRECTOR, KNIK ARM BRIDGE AND
TOLL AUTHORITY, DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES, "Alaska Department of Transportation and Public
Facilities, KABATA" (copy on file).
Ms. Dougherty looked at slide 2, "Overview":
Public Finance Plan Review
•Flow of Funds Project Development Activities
•Environmental
•Right of Way
•Utilities
•New Socioeconomic Study
•New Traffic and Toll Revenue Study
•FHWA Major Project Requirements
•TIFIA
Ms. Dougherty addressed slide 3, "Public Finance Plan":
Construction Funding
$345M TIFIA Loan
$275 State Bonds (dependent on TIFIA loan)
$300 Statewide Transportation Improvement Program
(STIP)
$73 M previously appropriated
Ms. Dougherty highlighted slide 4, "'Waterfall' Flow of
Funds."
Toll Revenues
Operation and Maintenance
TIFIA Debt Service
TIFIA Reserve Requirements
Bond Debt Service
Surplus Revenue
Ms. Dougherty highlighted slide 5, "Project Development."
Environmental/Permitting
•2010 Record of Decision/challenge period is over
•All major permit applications submitted
Right of Way
•86 percent of ROW is purchased
•All privately owned parcels purchased, remaining
are ARRC, JBER, MOA and UA lands
Utilities
•Water and sewer relocation coordination
Senator Dunleavy queried the cost to purchase railroad
property. Ms. Dougherty responded that the purchase cost
was approximately $2 million.
Co-Chair MacKinnon wondered when the legislature could
expect any information regarding the impact on the beluga
whales. Ms. Dougherty replied that the permit application
was submitted in 2010, and the previous governor had
written letters on the issue. She furthered that there was
some statutory limits on permit application decisions. She
stated that there was an intent to have a decision in early
2015. She had recently received a letter that stated that
they were coordinating with the Federal Highway
Administration on that decision.
10:15:04 AM
Co-Chair MacKinnon noted that it would have taken 5 years
to receive one permit. She queried the timeline on the 404
permit. Ms. Dougherty replied that that the Corps of
Engineers had completed their work. She furthered that
every permitting agency was required to do their own
National Environmental Policy Act (NEPA), so the Corps of
Engineers had anticipated a favorable decision, except they
were waiting for an Incidental Take Statement (ITS).
Co-Chair MacKinnon wondered if "NEPA" was National
Environmental Protection Act. Ms. Dougherty replied in the
affirmative. She explained that the Federal Highway
Administration oversaw NEPA, and every other federal agency
conducted their own NEPA. She stated that the Section 7,
regarding endangered species to be complete until the
National Marine Fisheries Service (NIMFS) was complete.
Co-Chair MacKinnon queried the definition of "NIMFS." Ms.
Dougherty replied that NIMFS stood for the National Marine
Fisheries Service. She explained that there were two
branches of NIMFS.
Senator Bishop queried the cost of the dredge fill
placement. Ms. Dougherty replied that there was typically a
payment in fee in lieu for fill in wetlands. In this
particular case, there was not a proper credit to pay fee
in lieu. The anticipated cost was approximately $25
million.
Senator Olson queried how much of the current right-of-way
was taken by Eminent Domain. Ms. Dougherty replied that
none of the current right-of-way property was purchased
through Eminent Domain.
Ms. Dougherty looked at slide 6, "Project Development,
cont."
New Socioeconomic Study
Key Considerations include:
•MSB 2060 Futures Project
•MSB Density Build Out Study
•AMATS Anchorage Transportation System Plan
Update
•2011 Municipality of Anchorage Housing
Market Analysis
•2012 Municipality of Anchorage Commercial
Lands Study
•2014 Municipality of Anchorage Industrial
Lands Study Update (in progress)
Ms. Dougherty highlighted slide 7, "Project Development,
cont.":
New Traffic and Toll Revenue Study
•Uses New Socioeconomic Data
•Additional Traffic Studies
•More Robust Analysis
•Sensitivity Testing
Draft Tolling Operations Plan
•Toll Collection Plan
•Customer Service Plan
•Violation Enforcement Plan
10:21:34 AM
Ms. Dougherty highlighted slide 8, "Project Development,
cont.":
FHWA Major Project Requirements
•FHWA Cost Estimate Review
•Draft Project Management Plan
•Financial Plan
TIFIA
•KAC will now meet eligibility requirements
•Current interest rate is 2.67 percent (1.68
percent blended)
•$19B in Lending Capacity still available
10:24:46 AM
Senator Bishop queried the difference between the phrases
"now meet eligibility requirements" and "should meet
eligibility requirements." Ms. Dougherty required that the
project was waiting on legislation. She remarked that the
TIFIA website had listed all the submitted projects, and
identified what was missing for eligibility. She believed
that the legislation was still necessary for the bonds, but
until TIFIA had a new letter of interest it was unknown if
the eligibility test would be positive.
Co-Chair MacKinnon wondered if the letter had been
submitted. Ms. Dougherty replied in the negative.
Co-Chair MacKinnon asked why the letter had not been
submitted. She wondered if the delay was due to the
administrative order or for other reasons. Ms. Dougherty
replied that when the project moved from KABATA to DOT/PF,
and DOR was involved with the bond sales, both DOT/PF and
DOR wanted to ensure that the financing plan was
successful. She stated that TIFIA was not immediately
submitted. The project met with DOR and DOT/PF leadership
in the summer and fall, and presented all back up
documentation that TIFIA and other rating agencies
expected. The documentation and plan were tightened, and
she felt that the letter could be submitted. She said that
the project was waiting for the administration to allow the
letter to be submitted.
Ms. Dougherty addressed slide 9, "Projected Toll Revenue
and Costs." She stated that the graph was a product of the
traffic and revenue study, and it assumed a design and
construction start in late 2016. The delay of the project
would cause the axis to shift, and the numbers would be
slightly different.
10:29:02 AM
Ms. Dougherty discussed slide 10, "Sensitivity Tests." She
stressed that the sensitivity testing was important in
ensuring the receipt of the TIFIA loan. She shared that
sensitivity testing was conducted on the seven key
variables that were designed to answer the possibilities in
the assumptions.
Ms. Dougherty looked at slide 11, "Effect of Sensitivities
on Revenue." She noted that there were 5 percent, 25
percent, 75 percent, and 95 percent lines. She explained
that the lines represented the percentage of probability
that the revenue would be less that the representation in
the line.
Ms. Dougherty highlighted slide 12, "TIFIA Process":
Submit Letter of Interest
•Eligibility review (1-2 month)
Eligibility Approved
•Submit $100,000 Credit
Worthiness/Risk Assessment (3-4 months)
•Rating opinions
•Oral presentations
I
Invitation to Apply
•Submit Application
•Application Completeness Review (30 days)
Advance to Credit Council (60 days)
•Approval/Denial
Approval = Obligation of Budget Authority (total of 7
to 9 months)
Another 6-8 months to close the loan = lock in
interest rate
Ms. Dougherty addressed slide 13, "Preparing for Opening":
Other Considerations
•Schedule for toll rate increases
•Other fees and fines
•Commercial accounts
•Rental car companies
•Customer care issues
•Privacy issues
•Enforcement issues
10:33:44 AM
Senator Bishop wondered if there was an examination of best
practices of other toll authorities in the country. Ms.
Dougherty replied in the affirmative. She furthered that
there also some conversations with the Division of Motor
Vehicles (DMV) who faced some similar issues. She stated
that there was a possibility to partner with DMV, to ensure
no duplication of efforts.
Co-Chair MacKinnon wondered what would occur if the project
were delayed a year. Ms. Dougherty replied that it depended
on which phase would be delayed.
Co-Chair MacKinnon remarked that the state was in a waiting
pattern for the federal government to act, and the
administration was also determining whether the project
worthy of moving forward. Ms. Dougherty agreed.
Co-Chair MacKinnon wondered if waiting would possibly
eliminate a probability for the project to access the $19
million. Ms. Dougherty responded that waiting may risk the
financial plan completely falling apart. The only leg of
the financial plan that grows with inflation was the TIFIA
loan. The other two pieces were fixed dollar amounts.
Senator Dunleavy remarked that the state was in a
deflationary period, because of the lower cost of oil. He
wondered if the deflation was ever considered in the
inflation calculations. Ms. Dougherty replied that the
calculation was based on a 2.5 percent inflation estimate.
She furthered that construction estimates were difficult to
determine in a deflationary period.
Senator Bishop queried the number of projects in the queue
for TIFIA loans. Ms. Dougherty replied that she believed
that there were approximately 10 to 20 projects.
Co-Chair MacKinnon wondered how long the KNIK Arm Crossing
was on the books. Ms. Dougherty replied that the KNIK Arm
Crossing was on the books since 2003. She stated that there
was some initial planning work conducted by DOT/PF, and
KABATA was created in 2006.
Co-Chair MacKinnon announced that no additional GF money
was needed to advance the project. Ms. Dougherty agreed.
She furthered that there was an anticipated state match for
the capital budget in FY 16. She remarked that the bond
proceeds may be anticipated for a state match.
10:37:52 AM
Co-Chair MacKinnon wondered if the TIFIA process would
reveal whether the project's revenue stream and funding
proposition was adequate to move the project forward. Ms.
Dougherty agreed. She furthered that it was important for
the state to demonstrate support for the project during the
TIFIA project, otherwise the federal agencies were less
likely to participate.
Co-Chair MacKinnon remarked that the legislature had passed
a bill to support the financing of the project. She
supported the project, because TIFIA would discredit the
argument over traffic count. There would be an additional
analysis, to evaluate without the personal connection to
different issues along the corridor. Ms. Dougherty
announced that there had been discussion of a Knik Arm
Crossing as early as 1923. There was documentation about a
possible railroad.
Co-Chair MacKinnon wondered if a Knik Arm Crossing would
benefit the AKLNG project. Ms. Dougherty responded in the
affirmative, because the port to port connections were
positive for the AKLNG project.
Senator Dunleavy looked at a memo that stated that "all
environmental permit applications from 2010 to 2013, with
free permits outstanding." He wondered if that was still
the case. Ms. Dougherty agreed.
Co-Chair MacKinnon wondered if the memo Senator Dunleavy
was referencing was available to the public.
10:40:44 AM
AT EASE
10:41:37 AM
RECONVENED
10:41:51 AM
Co-Chair MacKinnon discussed housekeeping.
ADJOURNMENT
10:42:16 AM
The meeting was adjourned at 10:42 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 022615 AIDEA AMDIAR BRIEFING.pdf |
SFIN 2/26/2015 9:00:00 AM |
Administrative Order 271 |
| 022615 DOT Juneau Access.pdf |
SFIN 2/26/2015 9:00:00 AM |
Administrative Order 271 |
| 022615 DOT KABATA.pdf |
SFIN 2/26/2015 9:00:00 AM |
Administrative Order 271 |
| Response to House Transportation Committee 2 10 15 Hearing.pdf |
SFIN 2/26/2015 9:00:00 AM |
Administrative Order 271 |