HOUSE FINANCE COMMITTEE January 11, 2006 1:36 P.M. CALL TO ORDER Co-Chair Meyer called the House Finance Committee meeting to order at 1:36:12 PM. MEMBERS PRESENT Representative Mike Chenault, Co-Chair Representative Kevin Meyer, Co-Chair Representative Bill Stoltze, Vice-Chair Representative Richard Foster Representative Mike Hawker Representative Jim Holm Representative Reggie Joule Representative Mike Kelly Representative Beth Kerttula Representative Carl Moses Representative Bruce Weyhrauch MEMBERS ABSENT None ALSO PRESENT Representative Ethan Berkowitz; Representative Berta Gardner; Representative Norman Rokeberg; Representative Kurt Olsen; Representative Jim Elkins; Representative Bill Thomas; George Wuerch, Chairman, Knik Arm Bridge and Toll Authority; Malcolm Menzies, Southeast Regional Director, Department of Transportation and Public Facilities; J.C. Conley, Former Ketchikan Assembly; Jeff Ottesen, Director, Division of Program Development; Michael Barton, Commissioner, Department of Transportation and Public Facilities; William Green, Project Counsel, Knik Arm Bridge and Toll Authority, Anchorage; Michael Barton, Commissioner, Department of Transportation and Public Facilities PRESENT VIA TELECONFERENCE Bob Weinstein, Mayor, City of Ketchikan GENERAL SUBJECT(S): The following overview was taken in log note format. Tapes and handouts will be on file with the House Finance Committee through the 24th Legislative Session, contact 465- 6814. After the 24th Legislative Session they will be available through the Legislative Library at 465-3808. ^ OVERVIEWS: KNIK ARM BRIDGE & TOLL AUTHORITY GRAVINA ISLAND BRIDGE   TIME SPEAKER DISCUSSION  1:36:33 PM Co-Chair Meyer Co-Chair Meyer introduced the new committee member Representative Beth Kerttula and convened the House Finance Committee in order to discuss the Knik Arm and the Gravina Island Bridge. He noted that the meeting would provide an opportunity to the intended financing. Those two items will be contained within the Capital Budget.  KNIK ARM BRIDGE & TOLL AUTHORITY  1:38:16 PM GEORGE WUERCH, Introduced his staff, Mr. Green, CHAIRMAN, KNIK Project Counsel. Mr. Wuerch provided ARM BRIDGE AND the Committee with handouts from the TOLL AUTHORITY Knik Arm Bridge annual report from the project.  1:40:15 PM Mr. Wuerch Referenced Page 5 of the handout, the satellite view of the map of the greater Anchorage, Mat-Su, Port MacKenzie area proposed for the Knik Arm Crossing. He pointed out the Anderson dock approach & the area called the "elephant cage" - for the highly classified intelligence.  1:41:27 PM Mr. Wuerch Referenced Page 9. He spoke to the impact of the defense communication system and the Anchorage International Airport, the last consideration should be a high suspension bridge. He referenced the drawing on Page #9, which provides a conceptual visual of the bridge.  1:43:12 PM Mr. Wuerch Referenced Page 10 & 11, which provide the graphic results of the Federal Highway Commission's scoping process that took place last year. He added that over 20 alternatives had been considered. The most reasonable proposals contained two different approach roads on the Port MacKenzie side. He stated that either proposal would work for the Toll Authority.  1:44:33 PM Mr. Wuerch Referenced figure #2, Page 10 - the Southern alignment bridge, which moves the bridge structure and minimizes the 'foot print' from military communication. It does move it closer to the Port of Anchorage.  1:45:10 PM Mr. Wuerch Referenced figure #3, Page 11 provides illustration for the Erickson Street alternative alignment. Phase 1 connects to the A/C couplet, while Phase 2 connects to the Ingra/Gambell Couplet.  1:46:33 PM Mr. Wuerch Addressed alternative #4, the Degan Street alternative alignment.  1:46:44 PM Mr. Wuerch Spoke to the financing chart as listed on Page 13. He pointed out the $94 million dollars proposed by the Governor for the Capital Budget. He noted the revenue bonds, hopefully totaling $200 million dollars. He acknowledged the unresolved large block of money that needs to be filled with out resources.  1:48:14 PM Mr. Wuerch Reiterated that there is a large segment of the pie that needs financing discussion in the amount of $250 million dollars.  1:48:33 PM Mr. Wuerch Addressed the important milestone of breaking ground. He noted Page 14, which highlights the 2006 milestones: · Public release of draft EIS permit application · Legislative approvals · Release of final EIS/record of decision · Finalize financing final permits · Phase 1 construction kickoff  1:49:13 PM Mr. Wuerch Commented on a special grant from the Mat-Su Borough. He suggested that the amount become a State funded item, not using any federal funds. He thought it qualified as a maintenance upgrade. If the item was addressed through the supplemental budget, it could be completed by next fall.  1:50:06 PM Mr. Wuerch Admitted that no project needs all the money up front. Page 13, references cash flow, adding up to the $600 million dollar request. Recently, those cost estimates have been updated with the inflation numbers. The 2005 dollars would total approximately $550 million dollars; those same dollars in 2008 would be approximately $595 million dollars.  1:51:31 PM Mr. Wuerch Submitted that the price is right; acknowledging that there is question from where the money will come from. He summarized, noting that worldwide  there are projects that are public & private partnerships (PPP).  1:52:45 PM Mr. Wuerch reiterated that PPP is a new financing mechanism with success throughout the nation. He pointed out that later in the legislative session, there will be discussion regarding that opportunity.  1:53:20 PM Co-Chair Meyer Admitted the proposed need for the Anchorage community; however, noted on Page 13, the amount of nearly $300 million dollars intended to be funded by the State.  1:54:24 PM Mr. Wuerch Responded that initially there was an expectation that the project would be divided into thirds. One third, federal earmarks (which has been deleted), one third, State general funds and the final third raised by debt revenue bonds. The one third intended to be federal is currently half that amount. He thought that the one-third revenue bonds would not be problematic and that the other portions need to be discussed and offered to work on a combination of private and public financing.  1:55:23 PM Co-Chair Meyer Inquired if further federal funding was expected.  1:55:35 PM Mr. Wuerch Responded that it is a complex issue. The Federal Highway Commission (FHC) has not yet released their allocation notice. The railroad specifics have not been identified and it has not been determined how the federal money will be spent.  1:56:01 PM Co-Chair Meyer Asked if the State would ultimately be responsible.  1:56:14 PM WILLIAM GREEN, Explained that the State would have no PROJECT liability for the revenue bond debt COUNSEL, KNIK issued by the Toll Authority. The ARM BRIDGE AND preliminary analysis has been provided. TOLL The market will not lend the money AUTHORITY, unless they are convinced that there is ANCHORAGE a good financial plan and the costs are realistic. The traffic that is expected to be generated across the bridge will match the debt load. The Authority can finance the $200 million dollars based upon current known projections. He stated that was a conservative number. He reiterated that there would be no State liability for the debt reimbursement and that the project  would be self-liquidating.  1:58:21 PM Co-Chair Meyer Requested more information on the bridge design and seismic activity. Mr. Green requested that the Department address that concern.  1:58:48 PM Representative Asked if the design process included Hawker any major rail crossing. He spoke to the complications for the railroad through northern Anchorage and the Valley.  1:59:22 PM Mr. Wuerch Replied that it had been considered and discussed with the Alaska Railroad. The issue is that railroad bridges are designed for a much heavier load than highway bridges and therefore much more expensive to build. There has been a proposal to build a highway bridge and built it to railroad specifications. An EIS project could take several years. Any large water body in the Nation has two bridges side by side; one for cars and one for the rails.  2:00:39 PM Representative Addressed tolls, suggesting that the Hawker traffic will choose the route without the toll. He questioned if the Alaska public would support a toll system.  2:01:37 PM Mr. Wuerch Agreed, noting that people are used to free use of the transportation structure. Nevertheless, pointed out that the Golden Gate bridge was a good example. He suggested that the situation was similar because of the distance that would have to be driven without use of the bridge. He referenced Page 3 with the transportation numbers. He pointed out that using the proposed bridge, which becomes a function of time for commuters, could save 40 miles. The cost of driving a car is far more than the cost of filling the tank. The alternatives are more expensive.  2:03:58 PM Mr. Wuerch Continued, the second important indicator as listed on Page 3 and provided by the Dip man Resource Company survey poll indicates the number of commuters who actually intend to use the bridge. There was an overwhelming the consumer support.  2:05:22 PM Representative Mentioned the price sensitivity issue.  Hawker 2:05:38 PM Mr. Wuerch responded that the numbers on the poll ran from $1 dollar to $6 dollars. He  commented on doubling price, admitting the 'trade off'. When prices change, people tend to use the alternative briefly. It has been recommended that the price should be established and then not changed for quite sometime.  2:06:35 PM Representative Questioned the assurance of the $600 Hawker million dollar proposed number and asked assurance that amount would not change and if it does include road improvements.  2:07:07 PM Mr. Wuerch Stated that it would connect the facility to existing roads. The map on Page 5 indicates where the road would run. By 2021, the existing couplet would reach saturation.  2:08:09 PM Representative Asked where the improvements would be Hawker to.  2:08:21 PM Mr. Wuerch Said it was not intended to 'touch' the Berger Road at all.  2:08:29 PM Representative Commented that there would need to be a Hawker substantial investment to upgrade those roads.  2:08:46 PM Mr. Wuerch Agreed, as the traffic increases. That does not happen right away. The current two-lane road will be adequate for a number of years. He was speaking about the connecting road from Goose Bay to Fort MacKenzie.  2:09:34 PM Representative Inquired if the $6 million dollar Hawker number was "solid" for the proposed term of the project from 2006 to 2009.  2:09:49 PM Mr. Wuerch Stated that number was safe. The bridge structure itself and behind the Port of Anchorage, the box tunnel under Government Hill, each include construction, design and contingency costs and about 20%. Those numbers total about $535 million dollars in 2005 numbers and then adds escalation and inflation costs. That brings the number up to about $592 million dollars. However, he could not guarantee the number but believed it was "good".  2:11:36 PM Vice Chair Commented on the Railroad options and Stoltze how that would affect eminent domain concerns and the costs associated with the over pass. He inquired if there had been conversations with Mr. Gambell of the Alaska Railroad.  2:12:59 PM Mr. Wuerch Noted that Representative Stoltze served on the Toll Board. He pointed  out that the Board meets regularly to address railroad concerns. The ability to use the proposed alignment along the shoreline is adaptable to railroad use. He noted that a corridor further west had been identified. He referenced figure 2 on Page 10, and laying of the gravel for the highway and the railroad.  2:15:21 PM Vice Chair Inquired if the project would compete Stoltze with other things affecting the gas line. He thought that anything done for the Port of Anchorage could help the gas line.  2:16:19 PM Mr. Wuerch Commented that the first stage would be the creation of a paved road from Port MacKenzie up to the Parks Highway. He recommended that the road needed to paved as soon as possible. In the long run, other improvements and the bridge completed, truckers would not hesitate to use the direct egress from Anchorage.  2:17:33 PM REPRESENTATIVE Inquired about the Government Hill area NORMAN and the proposed underground tunnel. ROKEBERG He asked if those residents had voiced objection.  2:18:31 PM Mr. Wuerch Admitted that there are issues in those neighborhoods. He hoped that working together would prove beneficial for that population group and looked forward to reaching a solution. He thought that committing to a second phase would be widely supported. He did not want to diminish the emotional issues affecting those areas.  2:20:17 PM Representative Asked the costs to the Government Hill Rokeberg area.  2:20:38 PM Mr. Wuerch Commented on not building the tunnel. It would reduce the costs by perhaps $70 million dollars. He did not know for sure.  2:21:08 PM Mr. Wuerch Responded to Representative Rokeberg regarding the second viaduct, which has not yet been designed. He asked that the Deportment address that question. There exists a commuter destination issue within the downtown traffic.  2:22:57 PM Representative Asked if the Toll Authority anticipated Hawker a financial audit.  2:23:27 PM Mr. Wuerch Acknowledged that they do. He pointed out on Page 12, the Department's standard audit would apply.  2:24:03 PM Co-Chair Meyer Brought up the possibility of earthquakes while crossing the bridge.  2:24:29 PM Mr. Wuerch Responded that working with the Department, they were able to address seismic concerns. He believed that the final design would be a "doable solution" to the problem.  GRAVINA ISLAND BRIDGE PROJECT  2:25:47 PM J.C. Conley, Spoke of his excitement for the Gravina Former Island Project and related the history Ketchikan of the State project, which was Assembly requested from Congressman Don Young. He explained the denial of the use of surrounding federal lands for logging purposes. He described the bridge project as part of the revitalization of Ketchikan. Mr. Conley referred to the national media challenge.  2:32:29 PM Mr. Conley Emphasized that the bridge would revitalize the economy in Ketchikan.  2:33:12 PM REPRESENTATIVE Thanked Mr. Conley for coming.  JIM ELKINS 2:34:03 PM Representative Asked about possible problems getting Kelly the ships through the channel. Mr. Conley identified the low bridge/high bridge solution to the problem, the preferred alternative.  2:35:56 PM BOB WEINSTEIN, Referred to a letter he sent to the MAYOR, CITY OF governor and legislators, which is part KETCHIKAN of the members' packets. (Copy on TESTIFIED VIA File). He shared the vision for TELECONFERENCE economic growth for Ketchikan. He described the challenges Ketchikan faces in community development due to its location and that Gravina Island would be the best choice for further growth for that community. He spoke of the closure of the pulp mill in 1997, decline of the timber business, and the need for land for industrial development.   2:41:04 PM Mayor Spoke of a funding allocation for the Weinstein project and Congress' intent for the funds. 1. Bridge project will come out of National Highway Funds. 2. State allocation has increased 3. The Gravina project is competing against other highway projects Mayor Weinstein voiced concerns by the methodology presently used by the Department. They have made a  determination that 48% of a total appropriation is set aside for other highway projects. He questioned the amount of money available for the bridge projects but did question DOT's figures and methodology.  2:45:04 PM Mayor Mentioned requests needed from the Weinstein Department of Transportation for this project to proceed. Urged the Committee to begin the process to invest money into transportation projects. He spoke to negative national media coverage of the project.  2:47:24 PM Vice Chair Inquired if the funding proposal for Stoltze the Gravina Bridge could be similar to that of the Knik Arm Bridge proposal.  2:48:15 PM Mayor Agreed that would be reasonable.  Weinstein 2:48:38 PM Representative Commented that it would affect the STIP Elkins (Statewide Transportation Improvement Program). He recommended adding in the support of Ketchikan. Co-Chair Meyer recommended that the Department take that into consideration.  2:49:12 PM Representative Asked if there had been misinformation Rokeberg regarding the amount of available land for future development. Mayor Weinstein stated that the population of Ketchikan is 15,000; when the airport was built, the population was approximately 9,000. There has been substantial growth since the '70's. The Borough has an excess of some 4,000 acres on Gravina Island with private holdings. Development plans have identified thousands of additional acres.  2:51:07 PM Vice Chair Questioned the funding and Ketchikan's Stoltze willingness to look at the justification for those numbers.  2:52:06 PM Mayor Related that a toll for bridge use Weinstein could be considered but that it would not represent a significant amount.  2:53:20 PM MALCOLM Explained that the project has been MENZIES, around since 1970, with various studies SOUTHEAST since then. He related the history of REGIONAL several of those studies. The EIS DIRECTOR, process ended in 2004. Three final DEPARTMENT OF alternatives were made and F-1 was the TRANSPORTATION preferred alternative. [Shown on AND PUBLIC screen presentation]. FACILITIES Within the preferred alternative, there  were two major bridges; one 2500 feet and one 3400 feet in length. Most of the design estimates were based on the decision to earmark for the total project. Portions of the project have begun, such as Ridge Road. The airport runway expansion will take place later this year. A conduit will be constructed under that runway for two lanes of traffic. A corps of engineer permit is expected this month after th January 15.  2:57:43 PM Mr. Menzies Explained the three alternatives [shown on presentation slide]. D-1, F-1, and F-3. He related the costs and projected dates of the project.  2:59:28 PM Representative Inquired about the possibility of a Holms drawbridge. Mr. Menzies related that would have traffic and cost problems. He clarified that none of the bridges currently are at grade and that a 200' clearance for the cruise ships would be needed which would be very costly.  3:01:21 PM Co-Chair Asked if both of the bridges were high Chenault spanned. Mr. Menzies responded that one bridge would have a span of only 60' and the other 200'. The high bridge would be the west channel, closer to the airport. There is marine traffic on both channels.  3:02:52 PM Representative Addressed the shorter span and asked if Kelly it would create an air-traffic problem.  3:04:04 PM Mr. Menzies Agreed it would.  3:04:32 PM Co-Chair Meyer Asked about the current progress. He asked if the $94 million dollar amount would allow continued progress.  3:05:05 PM Mr. Menzies Stated that there has been discussion regarding how many bridges that should be built at one time. The Southeast Region has considered waiting until all the money is received because if bridge construction was started and the monies were not received, it would be quite problematic. The road currently under construction, comes from the Governor's resource money.  3:06:03 PM Representative Asked if there would be operational Stoltze costs and if the ferry would shut down.  3:06:16 PM Mr. Menzies Replied that it would stop eventually. The overall construction period will take approximately 5 years and during that time, the ferry will continue.  3:06:38 PM Representative Commented on national feedback from the  Stoltze Democratic Party.  3:07:06 PM Representative Asked about the Knick Island stretch. Kelly Mr. Menzies clarified that there are almost 800 acres of borough land on that island.  3:07:44 PM Representative Asked the number of residents.  Kelly 3:07:55 PM Representative Did not know the exact number but knew Elkins it was "only a hand full".  DEPARTMENT OF TRANSPORTATION & PUBLIC  FACILITIES  3:08:31 PM JEFF OTTESEN, Provided handouts associated with the DIRECTOR, power point presentation - "Primer on DIVISION OF the Federal Highway Program for PROGRAM Alaska". (Copy on File).  DEVELOPMENT, DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES 3:09:04 PM Mr. Ottesen Referenced Page 2. The three key issues to be addressed are how the bridge would be funded. He offered to speak directly to the STIP.  3:10:16 PM Mr. Ottesen Explained the bridge math - Page 2, explaining the $91 million dollars and the $93.6 million dollar allocation. Congress did not do away with the earmarks but instead renamed them. He explained the distribution of federal aid transportation formula funds. The regulations express that the unrestricted money has eligibility restrictions and are divided into a pie, with 48% to highway funding. The Governor advised that the bridges would belong to the National Highway system.  3:12:06 PM Mr. Ottesen Referenced the top chart on Page 3. The STIP money to communities is not reduced.  3:12:59 PM Mr. Ottesen All the money indicated those programs would be made larger than they were in the STIP.  3:13:53 PM Mr. Ottesen Each project received a certain amount of federal earmarked dollars. He noted the reductions of 15% to account for the fact that federal funds are authorized at one level and general appropriated at a lower level. There are five years of funding providing information indicating that the funding promised comes in at 85%. The two bridges are not being treated  separately.  3:15:03 PM Mr. Ottesen Noted Page 4 - The mission statement: · Providing for the movement of people and goods and the delivery of state services. · All roads are not equal in that regard.  3:15:25 PM Mr. Ottesen Addressed the colored chart on Page 4 and the functional classification of the roads. The Department owns most of the roads.  3:16:33 PM Mr. Ottesen Spoke to where federal funds applied to the road systems throughout the State and did not come from the Title 23 funds. Only Alaska has an eligibility issue for federal funding. The roads at the top of the pyramid in the graph receive less federal funded.  3:17:39 PM Mr. Ottesen Referenced Page 5 - Which highlights where the majority of the traffic carried by the roads will move. He pointed out the 86% of accident that occur on 30% of the road system.  3:18:58 PM Mr. Ottesen Highlighted the eligibility issues on Page 6. The impact is that the high- level roads are less well funded than they would be if national formula and eligibility were followed.  3:20:23 PM Mr. Ottesen Eligibility issues (3) - Page 7. Some earmarks have further shrunk funding for Alaska's highway program. Earmarks do not usually come fully funded.  3:21:28 PM Mr. Ottesen Page 7, Eligibility Issue (4). Operations and preventative maintenance have shifted to federal funds over the past two decades. Since late '80's, the budget pressure to preserve general fund has shifted considerable costs to the STIP. The impact is that many fewer rehabilitation, safety and capacity projects are possible.  3:22:19 PM Mr. Ottesen Referenced Page 8 - the maintenance and operations operating budget and Consumer Price Index (CPI) companion chart.  3:22:53 PM Mr. Ottesen Noted Page 8, noting that the dollars are limited. Some earmarks were much more extensive than just two bridges. Another $269 million dollars in earmarks were non-deductive. The loss of STIP funds to bridge earmarks is only part of the picture.  3:23:57 PM Mr. Ottesen Commented on what was happening with funding. There have been more authorized dollars to the State than ever before. The total authorization over a 5-year period is about $2.5 billion dollars. A lot of that money cannot be spent on the regular STIP. Some of the earmarks that the Department received are deductive. He referenced chart 17, Page 9, earmarks coming at the expense of formula funds.  3:25:44 PM Mr. Ottesen Outlined the types of earmarks that went to the two bridges. The authorized dollars are set aside for specific categories of work and have certain restrictions.  3:26:33 PM Mr. Ottesen Referred to page 10, chart one, which indicates that the dollars are limited. Approximately $25 million dollars of annual funds previously flexible in nature were made restrictive.  3:27:32 PM Mr. Ottesen Explained that the Highway Trust Fund (HTF) has not been delivering cash as expected. The HTF is the principal source of Alaska Highway Funds. An apparent downturn is of concern.  3:28:56 PM Mr. Ottesen Referenced page 11, and stated that construction inflation has ramped up sharply. As project costs rise, the number of transportation projects the STIP can fund, drops.  3:29:42 PM Mr. Ottesen Pointed out that the process and new legal requirements for federal funds continue to expand. More is spent on intangibles or non-transportation work, and less on pavement.  3:30:26 PM Mr. Ottesen Showed on page 12 how STIP funds have been reduced. Stated that one significant project (~$12 M) is lost each year.  3:31:28 PM Mr. Ottesen Pointed to page 13, which indicates that project funds are lower today. He recognized the needs list of statewide projects.  3:33:52 PM Mr. Ottesen Referenced chart #26, which shows that STIP funding is not adequate.  3:34:02 PM Mr. Ottesen Highlighted page 14, which portrays the years needed to perform the work on the entire mileage of each system.  3:34:43 PM Mr. Ottesen Compared Alaska to other states' approach to highway construction, where there is a dedicated tax system for those concerns.  3:37:16 PM Mr. Ottesen On page 15, indicated that the STIP shortfall to regular projects stems from many causes. He listed those reasons in lost project funding.  3:38:03 PM Mr. Ottesen Highlighted the one-year hypothetical number of $12 million dollar projects delayed.  3:39:13 PM Mr. Ottesen Referenced page 16: Key Takeaways. Alaska relies on STIP funds for a larger universe of projects than any other state. STIP funds have effectively shrunk as a result of several factors beyond two bridges. The state has no supplemental fund source for the highway program, which magnifies the current downturn in STIP funds. He termed it a "fifty-state problem".  3:40:30 PM Mr. Ottesen Offered to provide a report on this topic from the U.S. Chamber of Commerce published last November.  3:40:54 PM Co-Chair Meyer Asked if the Department of Transportation would support a road bond.  3:41:12 PM MICHAEL Responded that the idea of raising the BARTON, gas tax is not popular. Alaska now has COMMISSIONER, the lowest gas tax at 8 cents per DEPARTMENT OF gallon. A higher tax could be a source TRANSPORTATION of money to meet the transportation AND PUBLIC concerns of the State. He urged that FACILITIES it be addressed.  3:42:14 PM Commissioner Added that the state should not loose Barton sight of the fact that it will receive $2.5 billion from the federal government in the next five years for transportation in Alaska.  3:43:28 PM Co-Chair Meyer He added that local governments, including Anchorage, do contribute to transportation.  3:43:49 PM Representative Commented on the allocation concerns. Hawker He asked if the disposable allocation is determined by state or federal legislation.  3:45:03 PM Mr. Ottesen Responded that it was primarily determined in state by a formula set in regulation and adopted as policy in 1995, became codified in 2002, and was amended in 2003. Underneath that allocation is federal funding and some rules apply to those funds. He listed those funds: National Highway System (NHS), Interstate Maintenance, and Surface Transportation Program (STP).  3:46:23 PM Mr. Ottesen Explained why there is a larger amount going to local governments.  3:46:36 PM Representative Asked if there was a flexibility of Hawker sending nothing to the communities. Mr. Ottesen explained the system of distribution.  3:47:12 PM Mr. Ottesen Replied that the need is there.  3:47:27 PM Representative In response to a question by Rokeberg Representative Rokeberg, Mr. Ottesen replied that the 27 percent is state developed funding for Anchorage. He explained the funding in detail based on population, and the yield under federal law. He explained DOT's obligation and the NPO footprint. He discussed accident scenarios.  3:51:09 PM Commissioner Explained that the money produced by Barton the formula for the two NPO's is not all of the transportation money that gets spent within the NPO boundaries. Representative Rokeberg continued to question the various categories. Mr. Ottesen clarified the four categories and explained how they apply.  3:52:42 PM Representative Asked about slide 24 and the expenses Rokeberg incurred by the open container and repeat offender laws. Mr. Ottesen responded with details about the drunk driving laws. Representative Rokeberg requested a current report on Anchorage projects, as compared to a few months ago, in order to explain them to his constituents.  3:56:12 PM Commissioner Addressed the changes in the STIP Barton compared to several months ago. There are increases in several local programs, but no changes in the NHS. Representative Rokeberg asked about alternative impacts if the funds were allocated elsewhere. Commissioner Barton discussed NHS concerns.  3:58:28 PM Co-Chair Meyer Gave a concrete example of money lost for highways in Anchorage. Mr. Ottesen related that those highways were on the NHS, which has not grown. There will be an increase to the NPO as a result of the bridge money coming back to the state.  3:59:25 PM Representative Asked if NHS funding is increasing. Hawker Mr. Ottesen noted a direct reduction in funding going to the NHS. The funding target for the NHS, aside from the two bridges, is about $60 million or about  40 to 50 percent of past targets in the prior bill. Representative Hawker speculated that $120 million had left the program. Mr. Ottesen explained the reality of where the dollars are. Representative Hawker noted he was looking for the aggregate number. He spoke of communities' possible unrealistic expectations and the need now for an explanation. He asked for an explanation for the aggregate changes related to District 32 and Anchorage.  4:04:56 PM Commissioner Offered to work with Representative Barton Hawker to provide more information.  4:05:45 PM Representative Asked about the earmark structure and Hawker whether change is an option. He referred to the original additive earmarks for bridge construction. Commissioner Barton replied that they are no longer earmarked for bridge projects and change is not an option. Representative Hawker suggested that $179 million was taken away for other programs. Commissioner Barton agreed.  4:08:33 PM Mr. Ottesen Clarified that all of the bridge earmarks were run through the STIP formula and distributed to local governments. Representative Hawker asked about the $50 million additive for Anchorage. Mr. Ottesen explained how that was processed. Representative Hawker suggested that the money was diluted. He asked where the money came from for the subtractive earmark. Mr. Ottesen explained that it came at the expense of what would have otherwise been formula money. $600 million was deductive earmarks. Representative Hawker requested more information about those specific projects. Mr. Ottesen explained the old formula, the installment plan, and the reality of what happened. He compared it to losing 1/3 of one's salary.  4:12:36 PM Representative Noted it is a judgment call. The draft Hawker STIP is $122 million less now. He asked for DOT's intent and how the legislature's concerns will be incorporated.  4:14:11 PM Commissioner Replied that the STIP needs to be Barton finalized and will be done in a couple of weeks. The STIP will be amended as  needed if the legislature requires it.  4:15:56 PM Co-Chair Meyer Noted that the governor's bridge proposal would be part of the STIP now, and in the future. Commissioner Barton agreed and pointed out that the governor is aware of the dilemma and has it under consideration.  4:17:03 PM Co-Chair Meyer Asked to see information about what roads would not be addressed. Representative Hawker concurred.  4:17:20 PM Commissioner Thought that would not be an easy Barton question to answer.  4:17:41 PM Representative Voiced concern about policy issues Rokeberg regarding further requests to complete the projects. He used the Seward Highway accident rate as an example of an important priority.  4:19:14 PM Commissioner Acknowledged the safety issue on the Barton Seward Highway, pointing out that fatalities in Alaska were down the past year. He spoke to the need to continue to address safety on highways.  4:19:57 PM Representative Commented on the Ketchikan Bridge and Rokeberg the possible need for a further request.  4:20:13 PM Commissioner Said the financial methods are still Barton being worked on.  4:20:44 PM Representative Observed that the state of Alaska has Hawker no recurring sustainable local contribution to highway funding. He commented on motor fuel taxes. Public polling has indicated that motor fuel taxes are the single most despised form of taxation in the State. He acknowledged that the legislature is "between a rock and a hard place" with that information and is looking for sustainable funding statewide. He supported putting those ideas before the public.  4:23:04 PM Co-Chair Meyer Agreed. He pointed out that the Governor has been "lukewarm" toward those ideas.  4:23:33 PM Representative Agreed with the commissioner on the Moses motor fuel tax. He said it is based on 8 cents per gallon, which is too low - the lowest in the nation in a state with the greatest mass of land. He noted that he encouraged an increase in the marine fuel tax a few years ago. That tax should also be increased, as it is a user fee.  4:25:55 PM Representative Added that it would be a great Moses investment for the future of Alaska. He noted his own proposed legislation.  4:26:39 PM Co-Chair Meyer Commented that gas is currently $2.50 per gallon and it is difficult to add more taxes.  4:27:21 PM Representative Requested cost breakouts as asked for Kelly previously at the meeting by the committee members.  4:30:26 PM Co-Chair Meyer Acknowledged that lists are needed from DOT indicating surplus and general fund dollars.  4:31:10 PM Commissioner Replied that DOT will provide that Barton information.  4:31:23 PM Co-Chair Meyer ADJOURNMENT The meeting was adjourned at 4:29 P.M.