Legislature(2011 - 2012)SENATE FINANCE 532
03/31/2011 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Department of Transportation Overview: Roads to Resources | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
March 31, 2011
9:08 a.m.
9:08:33 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:08 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lesil McGuire, Vice-Chair
Senator Johnny Ellis
Senator Dennis Egan
Senator Donny Olson
Senator Joe Thomas
MEMBERS ABSENT
None
ALSO PRESENT
Patrick Kemp, Deputy Commissioner, Highways and Public
Facilities, Department of Transportation and Public
Facilities; Laura Baker, Director, Division of
Administrative Services, Department of Transportation and
Public Facilities; Al Clough, Project Manager, Roads to
Resources, Department of Transportation and Public
Facilities.
SUMMARY
^Department of Transportation Overview: Roads to Resources
9:10:03 AM
PATRICK KEMP, DEPUTY COMMISSIONER, HIGHWAYS AND PUBLIC
FACILITIES, DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES, expressed that he felt that Laura Baker should
discuss the capital budget requests, followed by Al Clough
present the need for the funding for the Roads to Resources
projects.
9:10:41 AM
LAURA BAKER, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES,
DEPARTMENT OF TRANSPORTATION AND PUBLIC FACILITIES, stated
that the Department of Transportation and Public Facilities
(DOT/PF) had three Roads to Resources projects in the FY 12
Capital Budget.
9:11:22 AM
Co-Chair Stedman stated that there was some concern with
too many images in the Power Point and stressed the issue
of focusing on financial concerns.
Ms. Baker stated that there was $10.5 million requested for
the Roads to Resources. She stressed that funding-stream
for the three requests were from AIDEA dividend fund.
Ms. Baker referred slide 12 of the PowerPoint presentation,
and stated that the reference number in the capital budget
was 50844. She explained that the $8 million dollar request
for Foothills West was continuation funding and would allow
the construction from the Dalton Highway to Umiat, which
would continue in the multi-phased approach for the design
and up-front process for the project.
Senator Ellis requested information about what companies
are supporting these projects. He mentioned that some of
his constituents called this project "Corporate Welfare."
Ms. Baker replied that Mr. Klaugh would provide more
information.
9:14:04 AM
Co-Chair Stedman recommended a specific explanation of the
Roads to Resources project. Ms. Baker replied that she
would continue, and touch on some historical information.
Ms. Baker discussed the Ambler mining district on slide 14
and slide 15, which was a request for $1.25 million. She
stated that the purpose for the project was to provide all-
season access for exploration and development of potential
resources. The requested funds would help in the evaluation
of the transportation modes in that area to provide
additional roads to the resource areas.
Ms. Baker discussed the Western Access Project: $1.25
million. She explained that the funds would continue the
development of the planning of the transportation corridor
connecting the existing road system with the Nome-area road
system. She
Ms. Baker referred to the document "Roads to Resources
Historical Funding/Expenditures" (copy on file). She
pointed out that in FY 2004; DOT/PF received a state-
appropriation of $5 million for industrial development
roads, which had been spent on a number of road development
projects. She explained in FY 2005, DOT/PF received an
industrial road program appropriation for $17 million. She
pointed out that only $8 million was received, because the
$9 million in federal funds did not apply. She stated that
$8 million had been spent on many different transportation
projects.
Co-Chair Stedman wondered if the $9 million that was
included in the $17 million, simply did not exist. Ms.
Baker affirmed that the $9 million was not received.
Ms. Baker looked at FY 2006, and pointed out the language
section of the bill allocated a number of projects, but the
industrial roads section identified a $3 million allocation
for the industrial roads, and $4 million for the North
Slope Foothills West Road EIS. She furthered that that the
language section also allowed for some re-allocation among
the projects. She stressed that department had spent $6
million, with $71,000 leftover.
9:18:26 AM
Co-Chair Hoffman requested an estimate of the success of
the development of the projects since 2003. Ms. Baker
replied that Mr. Kemp could provide more information.
Co-Chair Stedman stressed that there was an issue about
whether the Roads to Resources program was too shattered.
He felt that the purpose of the presentation was to
determine whether there needed to be a greater focus on
important projects. Ms. Baker remarked that in recent years
there was a focus on individual projects, rather than one
appropriation going to multiple projects. She pointed out
that some projects were under a prior administration, so
there had been a change in focus.
Ms. Baker looked at the 2008 legislative session, and
stated that DOT/PF received $3 million in state funds, and
there was currently $1.9 million left. She explained that
$1 million was used for the Acutan airport access road
project.
Ms. Baker referred to an item from the 2010 session, with
money for the Ambler Mining Project for planning, design,
and engineering. She continued to discuss the historical
projects. She stated that the bottom of the chart displayed
the $10.5 million request for the FY 2012 budget.
9:22:42 AM
Mr. Kemp wondered if he should present details of the
project requests. Co-Chair Stedman replied that the focus
should be about the process, selection, and total cost of
Roads to Resources. He wanted to know the integration of
the industry on the projects.
Mr. Kemp explained that he had done extensive research
about how the money was requested, and his position was to
determine whether the projects were appropriate. He felt
that the history of capital budget requests used a region
or entity that asked certain funding for a project. He
stated that projects usually took a signature of a deputy
commissioner to approve that funding. He felt most projects
were worth-while, but DOT/PF did not keep track of projects
accurately. He stressed that DOT/PF would focus on capital
projects and the Resources Road Decision Matrix (slide 6 of
the PowerPoint Presentation).
Co-Chair Stedman wondered if there was a desire to look at
former projects. Mr. Kemp replied that there probably would
not be a revisiting of past projects, but stressed that the
three proposed projects are the most important.
Co-Chair Stedman stressed that there needed to be a focused
conversation about each Road to Resources projects, and
whether or not they were economic, and how the funding
would be used. Mr. Kemp replied that DOT/F was planning of
focusing on the cheapest access to the resource. He
stressed that the roadway would be considered an industrial
highway.
Co-Chair Stedman wondered at what point the legislature
would get engaged to determine the impact on the budget.
Mr. Kemp replied that it was the intent to evaluate the
projects. He stressed that they were not a resource
development agency.
9:29:50 AM
Co-Chair Stedman felt there was a challenge with the road
to Nome, and mentioned that he felt the overall cost might
be $1 billion. Mr. Kemp stated that they were planning on
using the Alaska Highway model, and hoped to bring up to
standard over the next 50 to 60 years. He stated that the
$1 billion referred to a complete finished highway.
Co-Chair Hoffman looked at 2014 on page 11 of the Project
Review Listing of the FY 2012 Governor amended budget (copy
on file). Mr. Kemp stressed that it was a work in progress.
Senator Thomas stressed that he supported the Roads to
Resources, and mentioned that there were possibly two roads
to Nome considered. He pointed that there were a variety of
minerals, and felt that the roads should be directed
towards active companies. He felt that there were many
mining companies near Fairbanks that needed roads, and
wondered why there was not a focus on those operating
successful business.
9:38:23 AM
Co-Chair Stedman understood that there was a change in
direction in the administration, so there was a shift in
focus.
AL CLOUGH, PROJECT MANAGER, ROADS TO RESOURCES, DEPARTMENT
OF TRANSPORTATION AND PUBLIC FACILITIES, answered Senator
Thomas's question, and stressed that the developer that
refused involvement with the state.
Co-Chair Hoffman wondered if there was any reason why the
Donlin Creek officials did not want to work with the state
of Alaska. Mr. Clough replied that their reason was to not
have government as a partner.
Co-Chair Hoffman wondered if there was pool of reserves was
estimated in Donlin Creek and wondered if the value was in
the billions. Mr. Clough replied that he did not know the
value.
Co-Chair Hoffman stressed that the knowledge of the value
of some of the proven reserves was necessary in determining
the impact of the projects.
Co-Chair Stedman stressed that there was a struggle in
determining the importance and selection of each project.
Mr. Clough agreed, and reinforced that he was new at the
job.
9:44:12 AM
Co-Chair Stedman He referred to possible columns added to
the matrix when determining the importance of the proposed
projects. Mr. Clough replied that in the past, projects may
have seemed meritorious, but it was fundamentally unclear
as to how they were derived at. He stressed that the matrix
was not intended to be the definitive decision tool, but
merely presented as an example that there needs to be a
detailed decision process.
Co-Chair Stedman stressed that it was the interest of the
committee to determine the impact over so many years
regarding the financial impact. He stressed that there were
several billion dollars of projects outside the Roads to
Resources. He referred to many very expensive projects. He
stressed that the committee was very cautious when
committing to large projects.
Mr. Kemp stressed that the process and the environmental
impact statement would "flush out the details" of why a
road was built. He mentioned that the roads were not built
without justification.
9:51:15 AM
Co-Chair Stedman wondered if they were too early in the
appropriation cycle to determine the value of the projects.
Mr. Kemp responded that he was confident in the request,
and felt the requests were not made too early.
Co-Chair Hoffman noticed that was no delineation of private
lands and considerations of native programs. He queried how
much was allocated for the right-of-way acquisition. Mr.
Kemp agreed to provide that information.
Co-Chair Hoffman wondered what time of process and time
frame would be needed to go through fish and wildlife
lands. Mr. Kemp replied that the lead agency was the Corps
of Engineers, and stressed that their staff could provide
that information.
Co-Chair Stedman stated that the concern about fish and
wildlife lands was a concern for all roads.
9:56:15 AM
Senator Thomas referred to the Great Bear project, and
noted that their development was right at the end of the
haul-road on leased land at Prudhoe Bay. He stressed that
the legislature could help them by building a mile or two
more of road. Mr. Kemp responded that any project could be
nominated.
Mr. Clough detailed the Ambler mining district project on
pages 13 and 14 of the PowerPoint Presentation. Mr. Clough
stated that it was a project, and there needed to be
underground arctic tunnels.
Co-Chair Stedman stated that the Ambler project would be
$5.25 million after the current capital request.
10:06:32 AM
Senator Olson mentioned that there was a multitude of
questions, and wondered if he should wait.
Co-Chair Stedman encouraged the questions.
Senator Olson mentioned that his issues dealt with Umiat
and Nome road. Co-Chair Stedman encouraged the questions.
10:07:48 AM
Senator Olson wondered how lease issues would be avoided
when developing the roads. Mr. Kemp replied that those
issues should be flushed out when considering the projects.
He stated that the environmental impact study would provide
more information.
Senator Olson felt that the department was not doing their
homework when determining the perspective of the boroughs
Mr. Kemp replied that there had been a solicitation from
communities of agencies.
10:15:54 AM
Senator Olson wondered if the projects would go through the
project evaluation board. Mr. Kemp replied that the Roads
to Resources program did not have a project evaluation
board.
Senator Olson requested permission to provide a list of
questions to the committee.
10:17:29 AM
Co-Chair Stedman noted that the state received $29.7
million in the FY 2010 mining tax, which was 25 percent of
DOT/PF's capital budget in FY 2012. He pointed out that the
legislature was facing a conversation regarding a mining
tax adjustment. He stressed a good working relationship
between the industry and the state to develop some of the
infrastructure. He wondered if DOT/PF would come forward
with a flushed out process of the ranking and analysis in
December. Mr. Kemp replied that DOT/PF could provide a list
of future potential projects by the following legislative
session.
10:19:19 AM
Co-Chair Stedman stressed that there would be further
discussion about the projects before they move forward.
Senator Olson stated that hearings needed to be held in
those communities to determine their desire for the
projects.
10:20:30 AM
Mr. Kemp replied that public meetings had been held on the
projects, and felt that most of the meetings were positive
towards road construction. He mentioned that the support
might be because of the state of the economy.
Senator Olson wondered if there was a public meeting held
in every possible affected community. Mr. Kemp agreed to
provide detailed information.
10:22:01 AM
Senator Thomas referred to page 15 of the presentation, but
questioned that there could be too many ambitions with one
projects. He continued that there should be a focus on what
is the best project. He encouraged more communication
between DOT/PF and DNR.
Co-Chair Stedman wondered if there were any more issues
DOT/PF would like to address in the meeting. Mr. Kemp
clarified that on page 15 the routes were corridors. He
stated that the public involvement process and preliminary
engineering would determine that the alignment be route 2.
10:30:11 AM
Mr. Clough continued to discuss the Umiat project.
Co-Chair Stedman wondered if there would be an exclusion of
some of the projects, with a construction ranking. Mr.
Clough stated that there was a gathering of information for
potential natural resource development throughout the
state. He stated that there would be internal business
done, to provide more detail.
10:34:03 AM
Co-Chair Hoffman referred to the pages on the historical
expenditures and wondered how the amounts were being spent
that was represented as encumbered. Mr. Kemp replied to
provide that information.
Co-Chair Stedman requested that information be provided
expeditiously.
ADJOURNMENT
10:36:04 AM
The meeting was adjourned at 10:36 AM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2011 03 31 DOT - Roads To Resources.pdf |
SFIN 3/31/2011 9:00:00 AM |
Overview: Roads To Resources |
| 2011 03 31 CAP Roads to Resource Projects.pdf |
SFIN 3/31/2011 9:00:00 AM |
Overviews: Roads To Resources |
| 2011 03 31 Roads to Resources Summary.pdf |
SFIN 3/31/2011 9:00:00 AM |
Overview: Roads to Resources |
| 2011 03 31 - Roads to Resource Sen. Olson backup.pdf |
SFIN 3/31/2011 9:00:00 AM |
Roads to Resources |
| 2011 04 07 - 1 - Cover Letter to SFin re Roads to Resources.pdf |
SFIN 3/31/2011 9:00:00 AM |
Overview: Roads to Resources |
| 2011 04 07 - 2 - DOT&PF Response to SFin R2R Overview of 3-31-11_4_.pdf |
SFIN 3/31/2011 9:00:00 AM |
Overviews: Roads to Resources |
| 2011 05 07 - 3 - Attachment - Roads to Resources Summary.pdf |
SFIN 3/31/2011 9:00:00 AM |
Overview: Roads to Resources |