SB 363: An Act making appropriations for capital project matching grant funds and for capital projects; and providing for an effective date. Commissioner Bruce Campbell; Ron Lind, Director, Administrative Services; Roger Allington, Planning Director; Helvi Sandvik, Deputy Commissioner; all from the Department of Transportation & Public Facilities came before the committee for an overview of the department's capital budget. SENATE BILL NO. 363: An Act making appropriations for capital project matching grant funds and for capital projects; and providing for an effective date. Co-chair Pearce invited Commissioner Bruce Campbell; Ron Lind, Director, Administrative Services; Roger Allington, Planning Director; Helvi Sandvik, Deputy Commissioner; all from the Department of Transportation & Public Facilities (DOT&PF) to join the committee for an overview of the department's capital budget. COMMISSIONER BRUCE CAMPBELL said that he had given a briefing a month ago and would not repeat that presentation. He asked Co-chair Pearce how she would like him to proceed. Co-chair Pearce asked for a review of the separate programs and how those related to the seasonal requests, authorizations and allocations. She noted that the legislature was uncomfortable with the way some projects had been authorized but never completed. Mr. Campbell related that the time frame and cost of many projects were determined by factors exterior to DOT&PF and the state, and this made a realistic forecasting very difficult. What had been done was a forecast for the next two construction years to the best of the department's ability. (He referred to the binders provided to the committee.) Discussion followed by Senators Rieger, Little, and Co-chair Pearce regarding phases of authorization and the priorities of various projects. Senator Rieger stated that he would prefer projects listed individually. Co-chair Pearce agreed that authorization would be done by individual project. Mr. Campbell stated that if allocations were done by project, the over-appropriation of $1.3 billion would not be addressed, but would continue to grow. He said October 1 to September 30 was the federal time period for authorization, and, if a project was delayed, another one must be authorized and available to fill that slot or federal funds would be lost. Co-chair Pearce said she understood this problem but there was not a consensus by the legislature to give DOT&PF a single lump-sum appropriation. Mr. Campbell offered the list for the next two years as DOT&PF's limitation. He said he had no desire to pull a project out of no where and substitute it for another. Co-chair Pearce reiterated the legislature's desire to authorize specific projects. Mr. Campbell said that short of lying to legislature, it was not possible to project specifically because of the complex process for projects. In answer to Senator Rieger regarding the Minnesota overpass, Mr. Campbell observed that there was some misunderstanding but it had been planned only as a railroad overpass. Senator Sharp offered the suggestion that some projects should be de-authorized and that would help clean up the over-authorization of $1.3 billion. Mr. Campbell agreed with that comment and said the department had phrased a request in the budget to read "no appropriation of federal funds" so the department would "live off" old appropriations. He said the department was in the process of analyzing all its projects but it would take time. In reference to Commissioner Campbell's remark, ROGER ALLINGTON said specific projects were not detailed as yet. A list of the appropriations was complete but individual allocations had not been identified. The department had more work to do on that report. Commissioner Campbell pointed out some projects went back to 1976. Co-chair Pearce asked the committee to bring up any questions as they went through information presented in the binders. HELVI SANDVIK, Deputy Commissioner, referred to the Corp. of Engineers Program that showed an original request of $6.9M reduced by the Governor's request to $3.2M. Since the department's original request, the Corp of Engineers had modified its expected program for 1995, reducing the match needed. She expected $20M of matched funds for the Corp. of Engineers. She said feasibility studies could not be done at the $3.2M request level which was $800,000 short of needed funds. Discussion followed regarding match requirements on projects. Mr. Allington said that historically, the state had funded the match for municipalities but it did vary depending on the project. Mr. Campbell added that a match also could be met by in-kind or other work rather than cash. In reference to Larson Bay, it was suggested that possibly the land was donated or some similar reason accounted for the low match. Several other projects were discussed. In regard to the Sitka Harbor, Mr. Allington said the city would have to come up with the additional money needed to complete the project. In regard to the Ketchikan shipyard, Ms. Sandvik said funds requested would provide safety and environmental improvements needed to keep the shipyard operational for the short term. It did not include any management fees or money for utilities. In the future, an additional investment would need to be made to keep the shipyard available for commercial use. Co-chair Pearce stated the Ketchikan shipyard was a black hole. Mr. Campbell said the shipyard was owned by the state and a contractual arrangement had been made on a lease basis with TY-MATT, Inc. He hoped this lease would be extended, but, if the commercial venture did not work out, he would propose closing the shipyard. Mr. Campbell said the Malaspina was in repair at the Ketchikan shipyard. He felt the state had a vested interest to keep the yard open while that work was completed. He said the marine highway vessel maintenance was a higher priority than keeping the Ketchikan shipyard open, and decisions would be made after the budget was complete since all areas of the department were being cut. Senator Little strongly suggested funding the maintenance budget rather than allocating funds to a shipyard that may not stay open. Mr. Campbell said the shipyard was being tried as a commercial venture and Ketchikan hoped it would succeed for their local economy's sake. Senator Kerttula suspected that if the state had not put the ferry in for maintenance at the shipyard at a 25 percent increase in cost, the shipyard would not have stayed open. Ms. Sandvik quoted the current director of the Marine Highway System, stating there was sufficient activity to support the shipyard on its own and did not have to be dependent on the Marine ferries. In answer to Senator Kerttula, Ms. Sandvik believed that it cost approximately $80,000 more to service the ferry in Ketchikan than down south. Mr. Campbell added that the department was under tremendous pressure to keep work in Alaska but did not appreciate criticism of that decision when local hire did increase the cost to the state. Discussion continued by Senators Rieger, Little, Kerttula, Co-chair Pearce and Mr. Campbell regarding the Ketchikan shipyard. Mr. Campbell pointed out that the other shipyard used by the state was Seward and a certain offset was allowed for local hire. It was noted that the Seward shipyard only could service small vessels which only included the Tustimena and Bartlett. The other ferries would have to go south for maintenance if the Ketchikan shipyard closed. End SFC-93 #65, Side 1 Begin SFC-93 #65, Side 2 Ms. Sandvik agreed to provide more complete figures to the committee regarding expenses by the Ketchikan shipyard. Discussion then turned to Facilities Energy and Code Upgrades which the Governor cut from $2.5M to $1.25M. Senator Rieger requested a detailed list for the $2.5M. Ms. Sandvik referred the committee to page 7 for a proposed list. In answer to Senator Rieger, Mr. Campbell said the state office building elevator project had to do with providing a safe exit on the 9th, 10th and 11th floor of the state office building. Ms. Sandvik explained the statewide advance project definition for up-front work needed to determine project feasibility was preparation of cost estimates, preliminary environmental work, minor reconnaissance studies, and definitions of project scopes. In answer to Co-chair Pearce, she said she did not have a list of projects but one example was a request by a community for a cross wind runway. Ms. Sandvik said that railroad planning would identify potential local rail freight assistance projects. Under this program, each state received $36,000 a year to identify projects. In answer to Co-chair Pearce, in regard to equipment fleet replacement, Mr. Sandvik said that agency leases would show up in the agency's budget. Co-chair Pearce asked for list of all leased vehicles from the state equipment fleet. Senator Kerttula thought an audit would be a good idea in this area. Mr. Campbell said that some agencies could lease without going through this program. Ms. Sandvik said that a Federal Transit Administration Grants appropriation allowed the department to apply for and receive annual grants from the Federal Transit Administration on behalf of local governments or private non-profit groups engaged in transporting the elderly or disabled. She noted that Anchorage received a direct grant. Section 18 covered operating costs. Ms. Sandvik said non-routine Maintenance Emergency Repairs (agency requested $1M and the Governor allowed $.5M) funded projects to replace DOT&PF facilities damaged by weather, winter floods, etc. Co-chair Pearce requested the amount of the balance left in that account. Senator Kerttula suggested some kind of donation per employee to fund this emergency fund. Discussion followed on appropriations by region. In regard to the Alaska Marine Highway System, Ms. Sandvik said this appropriation would fund the repair or replacement, preservation, and improvements of the systems, ferries and terminals. Projects were identified for 1994 and 1995. Senator Kelly questioned the high price of a baggage cart, $75,000. Ms. Sandvik agreed to provide details. Discussion followed by Senator Sharp, Co-chairs Pearce, and Frank regarding various projects and related federal matching funds. It was noted by Commissioner Campbell that routine maintenance was not eligible for federal funds. In answer to Senator Rieger, RON LIND explained that the portion of the front section that said "reduction in authority" referred to old remaining balances of matching funds and to the match only. He went on to explain that a lump sum appropriation would work better for the department than the very complicated system in place now. In answer to Senator Sharp, the Supreme Court decision on the Dalton Highway had not been made as yet. Discussion was had by Co-chair Frank, Mr. Allington, and Commissioner Campbell regarding the roof on the Haines ferry building, and the life span of roofs in general. In answer to Co-chair Pearce, Commissioner Campbell said the department had about $130M of remaining 1994 funds that would partially fund the 1994 list. These funds plus new funds would fund the construction list. He noted that ISTEA carried more pressure than in prior years and six management systems must be in place to qualify for federal funds. He said that he was not able to tell the committee realistic numbers for various projects because of all the factors involved. Co-chair Pearce announced that SB 363 would be HELD in committee. Recess 2:30pm Reconvene 3:00pm End SFC-93 #65, Side 2 Begin SFC-93 #67, Side 1