Legislature(2007 - 2008)FAHRENKAMP 203

01/22/2008 01:00 PM Senate TRANSPORTATION


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01:05:11 PM Start
01:09:58 PM Aviation Overview
02:35:49 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Please Note Location Change --
Aviation Overview: Department of
Transportation & Public Facilities
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE TRANSPORTATION STANDING COMMITTEE                                                                          
                        January 22, 2008                                                                                        
                           1:05 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
Senator Albert Kookesh, Chair                                                                                                   
Senator Donald Olson                                                                                                            
Senator Bill Wielechowski                                                                                                       
Senator Gary Wilken                                                                                                             
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                              
Senator John Cowdery, Vice Chair                                                                                                
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
Aviation Overview                                                                                                               
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                              
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                              
FRANK RICHARDS, Deputy Commissioner                                                                                             
Department of Transportation and Public Facilitates (DOT)                                                                       
Juneau AK                                                                                                                       
POSITION STATEMENT: Presented overview of rural aviation in                                                                   
Alaska.                                                                                                                         
                                                                                                                                
JESSE VANDERZANDEN, Manager                                                                                                     
Fairbanks International Airport                                                                                                 
Fairbanks, AK                                                                                                                   
POSITION STATEMENT: Presented an overview of Fairbanks                                                                        
International Airport.                                                                                                          
                                                                                                                                
MORT PLUMB, Manager                                                                                                             
Ted Stevens Anchorage International Airport                                                                                     
Anchorage, AK                                                                                                                   
POSITION STATEMENT: Presented an overview of Ted Stevens                                                                      
Anchorage International Airport.                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR ALBERT KOOKESH called the Senate Transportation Standing                                                                
Committee meeting to order at 1:05:11 PM. Present at the call to                                                              
order  were  Senators  Wilken,  Wielechowski,  Olson,  and  Chair                                                               
Kookesh.                                                                                                                        
                                                                                                                                
                       ^AVIATION OVERVIEW                                                                                   
                                                                                                                              
CHAIR  KOOKESH announced  the committee  would  hear an  aviation                                                               
overview.                                                                                                                       
                                                                                                                                
FRANK    RICHARDS,    Deputy    Commissioner,    Department    of                                                               
Transportation  and  Public  Facilitates  (DOT),  introduced  the                                                               
managers of  the Anchorage  and Fairbanks  airports respectively,                                                               
Mort  Plumb, Jesse  Vanderzanden, and  legislative liaison,  Mary                                                               
Siroky.                                                                                                                         
                                                                                                                                
JESSE  VANDERZANDEN,  Manager, Fairbanks  International  Airport,                                                               
said he would address five  things: capitol improvements program,                                                               
passengers,  cargo, general  business and  aviation. The  capitol                                                               
improvements  over the  past five  years and  projected into  the                                                               
future  were as  follows: 2001-02,  they extended  and rebuilt  a                                                               
runway to 6500 feet from an  original of 4200 feet. De-icing pads                                                               
were completed in 2006 on the  end of the taxiway -it allows then                                                               
to isolate  their glycol  and remediate it  for less  expense. In                                                               
the same year,  Taxiway Alpha was rebuilt after 25  years of use.                                                               
The cargo apron was relocated south  to a new area because of the                                                               
terminal  expansion. Taxiway  Alpha  will be  prepped  to be  the                                                               
alternative runway for 2009 for  when the main runway is rebuilt.                                                               
The float pond and ski strip was expanded.                                                                                      
                                                                                                                                
1:09:58 PM                                                                                                                    
MR. VANDERZANDEN said that from  2006-2009 the terminal will have                                                               
greater  development. The  old terminal  was 143  thousand square                                                               
feet and the new terminal  will measure 151 thousand square feet.                                                               
He said it's really  a net gain if we consider  it from the point                                                               
of view of efficiency. The  terminal was approved by the airlines                                                               
and the legislature for $99  million. The current budget forecast                                                               
is $93.5  million. Completion  is on track  for 2009  and they're                                                               
currently ahead of schedule.                                                                                                    
                                                                                                                                
1:11:08 PM                                                                                                                    
SENATOR WILKEN joined the meeting.                                                                                              
                                                                                                                                
MR. VANDERZANDEN  pointed out  which parts  of the  terminal were                                                               
open  for business  and which  parts were  under construction  in                                                               
2007 and 2008. They expect the  new terminal addition to open May                                                               
1 2008  in time for summer  season. All of the  mainline carriers                                                               
will  operate out  of this  new terminal  addition. The  regional                                                               
carriers will  operate out of  the existing terminal.  The middle                                                               
part will be demolished this  summer. In spring 2009 the facility                                                               
will be completed except for  demolition of the regional terminal                                                               
in  winter  2008.  An  artist's rendering  of  the  terminal  was                                                               
displayed, front and landside views.                                                                                            
                                                                                                                                
He said domestic  passenger service has seen a  steady growth for                                                               
the past  20 year  averaging 2.3 to  2.9 percent.  Delta Airlines                                                               
was new  in 2004.  They're planning  on expanding  from 5  days a                                                               
week  to 7  days a  week with  weekend service.  Alaska added  an                                                               
additional  Seattle route  in 2007  and another  Anchorage route.                                                               
ERA came  into the  terminal this  fall with  3 flights  daily to                                                               
Anchorage. The  airport also  has a  small community  air service                                                               
development  grant  that  they're  using  to  solicit  additional                                                               
service to the Rocky Mountain States, primarily Denver.                                                                         
                                                                                                                                
MR. VANDERZANDEN said International  Enplanements have taken off.                                                               
Japan Airlines (JAL)  started with three winter  charters in 2005                                                               
and has  since expanded  its schedule to  19 flights.  He pointed                                                               
out  on   the  slide   how  the   passenger  counts   have  grown                                                               
exponentially.   The  Condor/Thomas   Cook   direct  flights   to                                                               
Frankfurt, Germany started slowly but have become more popular.                                                                 
                                                                                                                                
1:15:21 PM                                                                                                                    
MR. VANDERZANDEN said  that the cargo component  hasn't worked as                                                               
well  and is  underutilized. Fairbanks  International Airport  is                                                               
the  primary diversion  for Ted  Stevens Anchorage  International                                                               
Airport.  They have  cargo transfer  authority and  they are  9.5                                                               
hours from 90 percent of  the northern industrialized hemisphere.                                                               
He  said the  big hit  to  Fairbanks was  the loss  of Europe  to                                                               
central Asia  traffic. With the  opening of the  Soviet airspace,                                                               
it's  a four  hour savings  one  way for  the airlines  to go  to                                                               
Tashkent,  Uzbekistan rather  than transiting  through Fairbanks.                                                               
In 2006, the airport got Volga-Dneper Charters.                                                                                 
                                                                                                                                
He explained that the airport  funds its operations, absent rates                                                               
and fees from  airlines, with concession and  land revenue. There                                                               
has  been significant  growth  in  both over  the  last years.  A                                                               
portion  of this  was created  by an  increase in  fees, but  the                                                               
majority increase  came from additional lease  lots. The increase                                                               
in concession revenue came primarily from passengers.                                                                           
                                                                                                                                
Fairbanks International  Airport is the largest  general aviation                                                               
airport north  of the Alaska Range.  It has one paved  runway and                                                               
one gravel  runway. The float  pond has  185 spaces and  365 tie-                                                               
down spaces. There's a pilot's  lounge and an airpark that's very                                                               
popular in the summer, but it's not open in the winter.                                                                         
                                                                                                                                
1:18:01 PM                                                                                                                    
SENATOR OLSON  asked if there was  a need to increase  the number                                                               
of float slips and if there's a waiting list.                                                                                   
                                                                                                                                
MR. VANDERZANDEN  replied currently  there's not a  waiting list.                                                               
The increase  in slips is  a by-product of expanding  the general                                                               
aviation runway.                                                                                                                
                                                                                                                                
SENATOR OLSON asked  how they have dealt with people  who were on                                                               
the waiting list for 10 to 12 years.                                                                                            
                                                                                                                                
MR. VANDERZANDEN  explained that  opening up  the new  float pond                                                               
gave the  airport 43  new spaces. They  currently have  14 vacant                                                               
slips.                                                                                                                          
                                                                                                                                
SENATOR OLSON  asked if the  increase in new carrier  service was                                                               
at the expense of established carriers.                                                                                         
                                                                                                                                
1:19:55 PM                                                                                                                    
MR.VANDERZANDEN  replied it's  too early  to tell,  but hopefully                                                               
more people travel and the pie will get bigger.                                                                                 
                                                                                                                                
SENATOR OLSON asked  how they plan on to get  passengers from one                                                               
side of the terminal to the other in the winter.                                                                                
                                                                                                                                
MR. VANDERZANDEN  replied they don't  expect much  cross traffic,                                                               
but if it  becomes a concern, some kind of  accommodation will be                                                               
provided.                                                                                                                       
                                                                                                                                
SENATOR OLSON said  some of his constituents  from Anaktuvuk Pass                                                               
or Barter Island continue on to Seattle.                                                                                        
                                                                                                                                
MR. VANDERZANDEN agreed to take a closer look at the situation.                                                                 
                                                                                                                                
SENATOR  OLSON asked  what kind  of provisions  are in  place for                                                               
earthquake proofing the terminal.                                                                                               
                                                                                                                                
MR.  VANDERZANDEN  replied  three  studies showed  that  the  old                                                               
building was seismically deficient so  the new terminal has a lot                                                               
of cross bracing and steel foundation work.                                                                                     
                                                                                                                                
SENATOR OLSON asked about cost overruns for the project.                                                                        
                                                                                                                                
MR. VANDERZANDEN responded that they  have stayed within or under                                                               
budget.  An Anchorage  Consumer Price  Index (CPI)  escalator was                                                               
built  into  the  project  which  provided  a  small  buffer  for                                                               
increased costs.                                                                                                                
                                                                                                                                
1:23:10 PM                                                                                                                    
SENATOR  WILKEN referred  to MOAs  (Military Operation  Area) and                                                               
asked what the airport hears from civilians.                                                                                    
                                                                                                                                
MR. VANDERZANDEN  responded they  are looking at  eliminating IFR                                                               
(Instrument  Flight  Rules)  traffic,  but they  will  allow  VFR                                                               
(Visual Flight  Rules) traffic throughout  the corridor.  He said                                                               
there's concern but the depth and breadth is difficult to gauge.                                                                
                                                                                                                                
SENATOR  WILKEN   asked  if  communication  is   working  between                                                               
civilians and military and if civilian pilots rely on it.                                                                       
                                                                                                                                
MR.  VANDERZANDEN  replied  that   he  doesn't  know.  They  have                                                               
encouraged the  military and the  FAA to coordinate  closely. The                                                               
amount of real time traversing through  MOA is not very much. The                                                               
closer  you can  get  to real  time the  more  airspace is  open,                                                               
minimizing the  conflict. He said  he's not as familiar  with the                                                               
civilian as the military.                                                                                                       
                                                                                                                                
SENATOR WILKEN said  the fact that Mr.  Vanderzanden doesn't know                                                               
is   positive   because  if   there   were   trouble  with   that                                                               
communication, Mr. Vanderzanden would know about it.                                                                            
                                                                                                                                
MR. VANDERZANDEN said  they are encouraging the FAA  to bring the                                                               
disparate parties together.                                                                                                     
                                                                                                                                
SENATOR WILKEN commented  the military knows that  anytime an F16                                                               
or  an F22  takes out  a  Piper Cub,  it  will be  a problem  for                                                               
everyone.                                                                                                                       
                                                                                                                                
SENATOR OLSON  asked if certain  parts of  the day are  closed to                                                               
IFR into the airport.                                                                                                           
                                                                                                                                
MR. VANDERZANDEN replied  that is currently proposed  in the MOA.                                                               
VFR is still allowed but not IFR.                                                                                               
                                                                                                                                
SENATOR OLSON  asked about funding  the general  aviation portion                                                               
of the Capstone proposal from the governor.                                                                                     
                                                                                                                                
MR. VANDERZANDEN deferred the question to Mr. Richards.                                                                         
                                                                                                                                
SENATOR OLSON asked what Fairbanks  thinks about the FAA Capstone                                                               
Program ("Capstone").                                                                                                           
                                                                                                                                
MR. VANDERZANDEN  replied that civilian aircraft  use Capstone to                                                               
a limited extent. It's favored  but costly. He thinks that people                                                               
are  waiting to  see if  there will  be some  kind of  program to                                                               
support it.                                                                                                                     
                                                                                                                                
1:29:37 PM                                                                                                                    
MORT   PLUMB,  Manager,   Ted  Stevens   Anchorage  International                                                               
Airport,  showed  old  photos  of the  airport  from  before  its                                                               
construction in 1938  through the 1953 airport  dedication and up                                                               
to   the   present.  He   said   the   Anchorage  and   Fairbanks                                                               
                                                   th                                                                           
International Airports were  appropriated by the 80   Congress in                                                               
1948 at $13  million for both. The first polar  flight took place                                                               
in 1957 by SAS (Scandinavian Airlines).                                                                                         
                                                                                                                                
1:32:30 PM                                                                                                                    
Japan Airlines used  the airport until 1989 when  the Berlin Wall                                                               
came  down  and the  former  Soviet  Union airspace  opened.  The                                                               
airport  today  has three  fully  operational  runways each  over                                                               
10,000 feet in length.                                                                                                          
                                                                                                                                
MR.  PLUMB  said  the  airport's primary  goals  are  safety  and                                                               
security and  managing at an efficient  cost. It is the  number 1                                                               
airport in the  US as measured by the landed  weight of cargo. In                                                               
2005 and 2007  the airport won awards from a  national agency for                                                               
service voted  on by freight  forwarders and airlines. It  is the                                                               
number  3 airport  in the  world  for cargo  throughput. About  5                                                               
million people travel  through the airport per year.  He said the                                                               
airport is  the busiest and  largest aviation base in  the world.                                                               
72 percent  of revenue  is derived from  cargo operations.  It is                                                               
9.5  hours from  most of  the industrialized  northern hemisphere                                                               
and equidistant between Tokyo and New York City.                                                                                
                                                                                                                                
He said  the payload versus  range is very helpful.  For example,                                                               
if you  go from Shanghai  to Oakland,  it's about 6000  miles and                                                               
you  can carry  65,000 kilos.  If you  stop at  Anchorage for  an                                                               
additional  144   miles,  you   can  carry  130,000   kilos.  The                                                               
difference,  at $2  a pound,  is about  $90,000 per  aircraft. If                                                               
you're Fed  Ex or UPS,  etcetera, with  about 5 flights  per day,                                                               
that's  about  $450,000 per  day  incremental  revenue, which  is                                                               
about $2.25 million incremental revenue  per week or $117 million                                                               
per year  per company. Fuel  is competitively neutral but  to get                                                               
more dollars out  of a gallon of gas, it  makes good dollar sense                                                               
to stop at Anchorage.                                                                                                           
                                                                                                                                
MR. PLUMB said that China is  about 35 percent of the market with                                                               
260  landings  per  week  by   12  airlines.  More  international                                                               
carriers are  coming out  of China taking  advantage of  the 2003                                                               
accord. He pointed  out a graph that listed the  landed weight of                                                               
the top  ten airports in  2005 showing  Anchorage as number  1 at                                                               
20.7 billion pounds.                                                                                                            
                                                                                                                                
1:37:38 PM                                                                                                                    
Infrastructure development  to handle  this capacity has  a total                                                               
budget of $454  million, the largest chunk for  completion of the                                                               
A and  B Concourse  remodel on  schedule and  to be  completed in                                                               
2009 with a new connector.                                                                                                      
                                                                                                                                
Ted  Stevens Anchorage  International  Airport does  not use  any                                                               
general  state   funds.  It  gets   funds  through   the  federal                                                               
government,  bonds  and  airlines  revenue. It  receives  an  FAA                                                               
issued LOI  (Letter of  Intent) in  1998 for  $48 million  and in                                                               
2003 for $60 million.                                                                                                           
                                                                                                                                
Prior to 1999, most of the  construction was cash funded. In 2003                                                               
and 2006, when they applied for  a bond rating, they were able to                                                               
demonstrate that they  had the potential for a  higher rating and                                                               
received it.                                                                                                                    
                                                                                                                                
They may  be able  to reduce  the current debt  by $6  million if                                                               
they attempt  a re-finance  next year  (and the  current interest                                                               
rates continue) when their early bonds become callable.                                                                         
                                                                                                                                
MR. PLUMB said the passenger peak  is in July when they have over                                                               
10,000  traveling  through  per  day  down to  4500  per  day  in                                                               
February.                                                                                                                       
                                                                                                                                
From  1995  to  2005,  they doubled  the  landing  weight.  Cargo                                                               
entitlements  and passenger  entitlements combined  provide about                                                               
$20 million.                                                                                                                    
                                                                                                                                
He  said the  airport is  very  competitive in  the domestic  and                                                               
international market regarding landing fees.                                                                                    
                                                                                                                                
1:41:52 PM                                                                                                                    
SENATOR WIELECHOWSKI asked if Anchorage is undercharging.                                                                       
                                                                                                                                
MR. PLUMB  responded that  the airport  has a  residual agreement                                                               
whereby the  airlines will pay all  the fees whether or  not they                                                               
stay. In  return, they are  able to vote  on some of  the airport                                                               
projects. He  said the  airport fees  are competitive  because 72                                                               
percent of revenue  comes from cargo which keeps  the landing fee                                                               
down.                                                                                                                           
                                                                                                                                
The ticketing  area rental rate  is also low compared  with other                                                               
airports due in  part to a small subsidy from  the landing fee to                                                               
the terminal area.                                                                                                              
                                                                                                                                
MR. PLUMB said  they have not asked for an  increase for the last                                                               
couple of  years. They are right  on budget this year.  They have                                                               
recycling and  a green  program. They  are an  economic generator                                                               
for the city and state.                                                                                                         
                                                                                                                                
With  regard   to  environmental  stewardship,  in   addition  to                                                               
recycling  they  are working  on  glycol  recovery. Through  RSIP                                                               
(Residential Sound  Improvement Program) they are  putting in new                                                               
windows and  insulation in homes  that are within the  65 decibel                                                               
range. In addition,  with new generation engines  that are coming                                                               
out,  they're  seeing   less  decibels  as  well   as  more  fuel                                                               
efficiency.                                                                                                                     
                                                                                                                                
MR. PLUM  said that the  airport is  the four-time winner  of the                                                               
Balchen Post Award for snow removal for large airports.                                                                         
                                                                                                                                
Regarding FAA re-authorization, an  omnibus bill was passed which                                                               
takes  them to  February  29,  2008 and  allows  them to  collect                                                               
excise tax from airlines.                                                                                                       
                                                                                                                                
Kulis  Air  National  Guard  Base  plans to  be  fully  moved  to                                                               
Elmendorf  by September,  2011.  Airline  lease negotiations  are                                                               
coming up.                                                                                                                      
                                                                                                                                
1:47:54 PM                                                                                                                    
MR. PLUMB said  twenty-five hotel companies have  responded to an                                                               
RFP and  there's a plan for  development of West Airpark.  In the                                                               
future, he  said there will probably  be a tunnel to  the airpark                                                               
and another runway as well as a move of the tower.                                                                              
                                                                                                                                
SENATOR WIELECHOWSKI expressed  thanks for a great  job. He asked                                                               
if there would be a bid to expand Kulis.                                                                                        
                                                                                                                                
MR. PLUMB responded that Kulis is  leased to the military so this                                                               
is just  termination of a lease.  They have gone through  a needs                                                               
request within  the state. The  school district has looked  at it                                                               
possibly  on an  interim basis.  There could  also be  commercial                                                               
interests. They will keep the firehouse.                                                                                        
                                                                                                                                
SENATOR  WIELECHOWSKI  wondered  about  a rumor  he  heard  about                                                               
moving the airport should a bridge be built.                                                                                    
                                                                                                                                
MR.  PLUMB  said   that  has  been  discussed.   There  are  more                                                               
significant wetland and noise issues  to consider and he believes                                                               
it will be a long time before that happens.                                                                                     
                                                                                                                                
SENATOR  WIELECHOWSKI asked  if they're  getting more  complaints                                                               
about noise.                                                                                                                    
                                                                                                                                
MR. PLUMB responded  that he thinks they're  getting less because                                                               
of   sound  insulation,   different  runways,   and  new   engine                                                               
technology. They're working very hard on this issue, he said.                                                                   
                                                                                                                                
SENATOR WILKEN  asked about the  interface between  civilians and                                                               
military.                                                                                                                       
                                                                                                                                
MR. PLUMB  explained that the Air  Force is trying to  work these                                                               
issues  into MOA  (Military Operating  Airspace). He  pointed out                                                               
that  they are,  however, a  public  service agency  and need  to                                                               
represent  even the  one person  that has  a cabin  that the  low                                                               
level flyers go over. He doesn't  think the in-route from Asia to                                                               
the Anchorage airport will be adversely affected by MOA.                                                                        
                                                                                                                                
SENATOR WILKEN  said the committee  wants to assure  that private                                                               
industry is okay before final decisions are made by the FAA.                                                                    
                                                                                                                                
MR. PLUMB  responded that the  Airman's Association  watches that                                                               
closely. What  Alaskans have to  be concerned about, he  said, is                                                               
that the  infrastructure throughout  the state makes  it possible                                                               
for pilots to use Capstone in their planes.                                                                                     
                                                                                                                                
SENATOR WILKEN asked about Tashkent.                                                                                            
                                                                                                                                
1:57:42 PM                                                                                                                    
MR. PLUMB explained that Soviet  airspace got cheaper, fuel costs                                                               
became more  predictable and the four-hour  time differential are                                                               
factors  that  make  Tashkent  a   competitor.  It  has  affected                                                               
Anchorage with  JAL but most of  it has been offset  by increased                                                               
traffic. He  said that  there are  more airlines  operating today                                                               
than can do so cost effectively.  He predicted that there will be                                                               
airline consolidations  and mergers. As  an airport they  need to                                                               
protect themselves  to make sure they're  flexible to accommodate                                                               
changes.                                                                                                                        
                                                                                                                                
SENATOR WILKEN asked if the loss  of routes due to renewed Soviet                                                               
airspace through Anchorage will continue.                                                                                       
                                                                                                                                
2:00:56 PM                                                                                                                    
MR. PLUMB responded that he  was encouraged to hear recently that                                                               
Dubai is  looking at Anchorage  as a model. However,  there still                                                               
could be additional loss.                                                                                                       
                                                                                                                                
SENATOR WILKEN asked  if all the upgrades were  completed for the                                                               
380 (Airbus A380) and if one has landed yet.                                                                                    
                                                                                                                                
MR. PLUMB  said one has not  landed, but the upgrades  were great                                                               
safety improvements, adding 100 feet to the taxiway.                                                                            
                                                                                                                                
2:02:50 PM                                                                                                                    
SENATOR OLSON  commended Mr.  Plumb for  making Anchorage  such a                                                               
hub  and  asked  what  the Ted  Stevens  Anchorage  International                                                               
Airport has done for general aviation.                                                                                          
                                                                                                                                
MR. PLUMB said the airport has  done more for general aviation in                                                               
the last  ten years than was  done in the previous  40, including                                                               
lake  bank   stabilization,  safe  lighting,  and   parking  with                                                               
electric potential.                                                                                                             
                                                                                                                                
CHAIR KOOKESH asked about a report on rural airports.                                                                           
                                                                                                                                
2:05:39 PM                                                                                                                    
SENATOR  OLSON noted  the increased  number of  hangars which  is                                                               
important for  safety. One  complaint he's  heard is  that you've                                                               
got to have a flight physical to maintain a tie-down spot.                                                                      
                                                                                                                                
MR. PLUMB responded that is required.                                                                                           
                                                                                                                                
SENATOR OLSON  asked if the  pilot could  renew his spot  for his                                                               
son.                                                                                                                            
                                                                                                                                
MR.  PLUMB  responded that  he  tried  grandfathering. He  thinks                                                               
there should be a way to take  care of people who have been there                                                               
for a  long time. There's  also an  equal number who  have waited                                                               
their time.                                                                                                                     
                                                                                                                                
SENATOR  OLSON  asked if  the  number  of lifeguard  flights  has                                                               
increased as well.                                                                                                              
                                                                                                                                
MR. PLUMB responded that he didn't know.                                                                                        
                                                                                                                                
SENATOR  WIELECHOWSKI asked  about the  aviation issue  regarding                                                               
the wind farm on Fire Island.                                                                                                   
                                                                                                                                
MR. PLUMB responded he didn't know if it had been resolved.                                                                     
                                                                                                                                
2:08:37 PM                                                                                                                    
CHAIR KOOKESH thanked Mr. Plumb for his presentation.                                                                           
                                                                                                                                
MR.  RICHARDS  presented an  overview  of  the rural  system.  He                                                               
showed a photo  of the Little Diomede  Heliport demonstrating the                                                               
unique kind  of facility his  agency can provide. In  Alaska, DOT                                                               
owns  the majority  of the  publicly owned  airports, a  total of                                                               
256. About 30 are owned by  villages and other agencies. DOT owns                                                               
and operates airports in every village  in the state. 70 of DOT's                                                               
runways are  less than  3000 feet  in length and  the goal  is to                                                               
increase them to  at least 3300 feet. 28 of  DOT's airports still                                                               
don't  have  permanent lighting.  Hours  of  operation have  been                                                               
expanded. The  operations are performed out  of regional offices.                                                               
These offices  plan construction and  deal with air  quality. The                                                               
FAA  is the  regulator as  well as  funding partner.  The largest                                                               
challenge is the  FAA mandate to build 1000 foot  safety areas on                                                               
each end.  The FAA  also assumes  direction of  the environmental                                                               
impact statements, but DOT would like to take over that role.                                                                   
                                                                                                                                
2:15:47 PM                                                                                                                    
MR.  RICHARDS  said  the Transportation  Security  Administration                                                               
governs  the security  provisions  in airports  that receive  jet                                                               
traffic. In Alaska,  there are three security  directors. Cost of                                                               
construction has seen a steep  escalation. Dust is a big problem.                                                               
Air quality  monitoring has been installed.  Particulate exceeded                                                               
national air quality standards in  some airports. He said this is                                                               
of  concern because  it  could  enable the  FAA  to direct  where                                                               
federal funds  are spent.  DOT is  addressing the  situation with                                                               
dust palliatives with some success.                                                                                             
                                                                                                                                
2:19:48 PM                                                                                                                    
He said  the airports  are also  experiencing floods  and coastal                                                               
erosion.  DOT is  especially concerned  about the  communities of                                                               
Kivalina, Newtok, and Shishmaref.                                                                                               
                                                                                                                                
MR. RICHARDS  said DOT has  developed a budget for  funding needs                                                               
of $955  million for  primary and  non-primary airports.  Most of                                                               
the  funds come  from  federal aviation  and airport  improvement                                                               
programs. DOT also gets General  Funds through the legislature to                                                               
address safety  issues and maintenance. The  most recent projects                                                               
are in South  Naknek and an airport for the  community of Chignik                                                               
Lagoon.                                                                                                                         
                                                                                                                                
Maintenance and  operations are  predominantly funded  by General                                                               
Funds. He said  in 2007 $123 million was allocated  for the rural                                                               
system.                                                                                                                         
                                                                                                                                
SENATOR WILKEN asked if that is an annual appropriation.                                                                        
                                                                                                                                
MR. RICHARDS said  the hope is that  the federal re-authorization                                                               
will be at higher levels.                                                                                                       
                                                                                                                                
SENATOR WILKEN  asked if it  becomes part  of a formula  once the                                                               
authorization goes through.                                                                                                     
                                                                                                                                
MR. RICHARDS said  they get entitlements for the  state of Alaska                                                               
based  on cargo  and passengers.  He showed  a comparison  of how                                                               
money  has  been  distributed  between  rural  and  international                                                               
systems.                                                                                                                        
                                                                                                                                
He  said the  FAA has  been  very generous  especially on  runway                                                               
safety  areas and  is not  requiring those  funds to  be deducted                                                               
from  the annual  allocation. The  FAA requires  that the  runway                                                               
expansion be completed by 2013.                                                                                                 
                                                                                                                                
2:25:00 PM                                                                                                                    
When Mr.  Richards started  in the department  10 years  ago, the                                                               
budget  was  $3-5  million;  now the  budget  is  between  $12-15                                                               
million.                                                                                                                        
                                                                                                                                
He said a large portion of the  new Angoon airport will be in the                                                               
wilderness. It will have a road,  which is an indication of money                                                               
being spent around the state  for rural Alaskans. For the future,                                                               
new community  airports, in  addition to  Angoon, include  one in                                                               
Akutan in the  Aleutians. The challenge there is no  flat spot to                                                               
put it on so it will need to  be on an adjacent island which will                                                               
require a shuttle ferry or hovercraft.                                                                                          
                                                                                                                                
The  introduction of  larger turbine  aircraft into  rural Alaska                                                               
will  require  airport  upgrades.   FAA  has  imposed  on  larger                                                               
carriers  the requirement  to  fly  in only  when  there is  fair                                                               
braking  action which  requires  a certain  friction range.  Huge                                                               
costs accrue  from snow blowers,  graders, plow trucks,  sand and                                                               
chemicals to create the right condition.                                                                                        
                                                                                                                                
USPS has proposed expanding mail  hubs in 14 new communities. For                                                               
DOT  this means  expansion of  airports. The  USPS would  save $2                                                               
million per  year. The question  is does  the cost accrue  to the                                                               
state.                                                                                                                          
                                                                                                                                
The governor  is presenting  a proposal to  the House  and Senate                                                               
for  a  loan program  to  fund  Capstone technology  for  private                                                               
owners to install. Security regulations are expanding.                                                                          
                                                                                                                                
CHAIR  KOOKESH asked  if Mr.  Richardson's slide  presentation is                                                               
available online.                                                                                                               
                                                                                                                                
MR. RICHARDSON replied it is.                                                                                                   
                                                                                                                                
SENATOR  WILKEN  asked Mr.  Richardson  to  discuss the  Aviation                                                               
Advisory Board from the prior administration.                                                                                   
                                                                                                                                
MR.  RICHARDSON  said it  is  still  an  active board.  The  next                                                               
meeting is scheduled next week in Fairbanks.                                                                                    
                                                                                                                                
2:32:07 PM                                                                                                                    
SENATOR OLSON,  referring to a  slide, asked if people  are still                                                               
living in  Platinum. Ten years  ago they were having  a difficult                                                               
time keeping the school open.                                                                                                   
                                                                                                                                
MR. RICHARDSON said people do live there.                                                                                       
                                                                                                                                
SENATOR OLSON  asked if  people are bringing  mail and  food from                                                               
Fairbanks to  Kayenna because you've  got to refuel  in Kotzebue.                                                               
He asked what the administration's stance is on the new hubs.                                                                   
                                                                                                                                
MR.   RICHARDSON  said   he's  asked   staff  to   identify  what                                                               
improvements will  be needed.  He said a  minimum length  of 5000                                                               
feet  is  necessary.  There'll  be a  dialogue  with  the  postal                                                               
service to  see if  it's worthwhile. He  said airlines  also have                                                               
infrastructure requirements.                                                                                                    
                                                                                                                                
SENATOR  OLSON asked  if the  governor's loan  proposal satisfies                                                               
federal requirements.                                                                                                           
                                                                                                                                
MR. RICHARDSON  said the federal  government is looking  for some                                                               
entity to come  up with 34 million to fund  Capstone for 4000 air                                                               
craft  which represents  90 percent  of flight  hours in  Alaska.                                                               
Since  DOT  is  not  providing   that  safety  factor  for  other                                                               
transportation  entities, it  came up  with the  plan for  a loan                                                               
program.                                                                                                                        
                                                                                                                                
2:35:49 PM                                                                                                                    
CHAIR KOOKESH  adjourned the meeting  and said there would  be no                                                               
meeting next Thursday.                                                                                                          

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