Legislature(1999 - 2000)
01/29/1999 09:10 AM Senate FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
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
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