HOUSE TRANSPORTATION STANDING COMMITTEE February 14, 1995 8:10 a.m. MEMBERS PRESENT Representative Gary Davis, Chairman Representative Beverly Masek, Vice Chair Representative Jerry Sanders Representative Bill Williams MEMBERS ABSENT Representative Jeannette James Representative Tom Brice Representative Eileen MacLean COMMITTEE CALENDAR CONFIRMATION HEARING: Commissioner-Designate Joseph L. Perkins, Department of Transportation and Public Facilities. WITNESS REGISTER JOSEPH L. PERKINS, Commissioner-Designate Department of Transportation and Public Facilities P.O. Box 20129 Juneau, AK 99801 Telephone: 465-3900 ACTION NARRATIVE TAPE 95-3, SIDE A Number 000 The House Transportation Committee was called to order by Chairman Gary Davis at 8:10 a.m. Members present at the call to order were Representative Davis, Masek and Sanders. CHAIRMAN GARY DAVIS introduced Joe Perkins, Commissioner-Designate of the Department of Transportation Public Facilities (DOT/PF). Number 019 JOSEPH L. PERKINS, Commissioner-Designate, DOT/PF explained that he possessed a diverse career throughout the world but has been in Alaska 15 or 16 years. He stated that he felt very fortunate that there are few parts of the state he has not been to or has not accomplished a project in. Commissioner Perkins stated that one of his determining factors when he made the decision that he would come back for this job, was with his background and expertise, he could effectively contribute to the understanding of the problems throughout most of the state. He indicated that he has become knowledgeable and familiar with the problems, at hand, and has traveled Alaskan roads extensively. Commissioner Perkins reiterated that his background would help him considerably in the decisions he will have to make as well as the policy that he will be setting for the future of transportation within the state of Alaska. Commissioner Perkins said he would be glad to answer any questions. Number 055 REPRESENTATIVE BEVERLY MASEK inquired as to what were the two joint ventures with the Native corporations Commissioner Perkins managed from the time periods of July, 1985, through April, 1991. Number 085 COMMISSIONER PERKINS explained that he had a joint venture with CIRI native corporation with Frank Moon and Associates and CIRI. The joint venture was to manage the logistical support and the camp for the studies of the Whatana and Susitna Hydroelectric projects. The second joint venture was with Ahtna Native Corporation. It was for the design and construction of the Backscatter Program. Ahtna has sold land to the Air Force for that program. The Air Force was the partner for accomplishing the design and construction. He continued by stating that this project was a sizeable job and completely negotiated with the final contract negotiated at approximately $210 million. The Secretary of Defense personally "killed" the Backscatter Program shortly before the start of construction. Number 090 REPRESENTATIVE MASEK inquired as to what was the Backscatter Program. COMMISSIONER PERKINS explained that the Backscatter Program was designed to be an over the horizon radar program. There were supposedly four sites to be constructed, each of these sites were actually comprised of two sites, one with an antenna to receive and one with an antenna to transmit. On the East Coast the site was located in Maine and both the receiver and transmitting antennas were located in Maine, where as on the West coast the receiver antenna was in California and the transmitting antenna was located in Oregon. This site was also completed and operational. The Alaska site was supposed to have the transmitter located outside of Gulkona and the receiver site in Tok, Alaska. All the preliminary work was done but construction never took place. Commissioner Perkins continued that the fourth site was to be in North Dakota and Minnesota but also was not built. Commissioner Perkins explained that the "over the horizon radar" was unique in that most radars are affected by the curvature of the earth the Over the horizon design, instead, was designed to bounce the radar beams off the ionosphere and down, with the ability to go vast distances and actually create a curtain where anything that flew through the curtain was picked up on the radar screen. REPRESENTATIVE MASEK asked if there was a lot of revenue lost in the Backscatter Program. COMMISSIONER PERKINS replied that a lot of revenue was lost. CHAIRMAN DAVIS added that a lot of federal revenue was lost. Number 120 CHAIRMAN DAVIS recognized that Representative Williams joined the Meeting at 8:10 a.m. Chairman Davis stated that most of the primary dollars for highway construction comes from the Intermodal Surface Transportation Efficiency Act (ISTEA) Program. Chairman Davis stated that he addressed this issue with Commissioner Perkins prior to this meeting. Chairman Davis informed the committee members that the initial federal legislation of the ISTEA Program was for five years and the reauthorization is scheduled for review in 1997. Chairman Davis stated that Commissioner Perkins spent some time in Washington D.C., working on the legislation and asked whether or not the Commissioner knew of any changes or maneuvering in disseminating the appropriate funds. Chairman Davis expressed concern for "protecting our share" and to obtain as much of the available funds as possible. Chairman Davis acknowledged that the purpose of the Commissioner's work, in Washington, was to get to know the players of the game. Chairman Davis also expressed a desire to be kept informed of any changes. Number 150 COMMISSIONER PERKINS indicated that there had not been any changes nor did he expect any action on the issue for the next three or four months. However, DOT/PF would start some of the preliminary work that needs to be done on the bill sometime in August or September of 1995. Commissioner Perkins indicated that although the preliminary work is scheduled, no official action will be taken and that only the lobbying portion will happen. Commissioner Perkins stated that this coming summer, the department will have to play as big a role as it possibly can in the development of the draft language that is in the bill. The Commissioner referred to the Federal Department of Transportation and said reorganization has been presented to Congress. There is a real question, in Washington D.C., as to whether Congress will have a chance to review the bill this year. Commissioner Perkins explained the difficulties in assessing the effects, for example, would relationships remain stable with the local highway administration. Commissioner Perkins felt that there are some important questions, within the reorganization, that could possibly effect the ISTEA Program. Number 179 CHAIRMAN DAVIS asked Representative Williams if he had any questions directed to Commissioner Perkins regarding the Alaska Marine Highway System, or other questions. REPRESENTATIVE BILL WILLIAMS inquired as to what thoughts and concerns Commissioner Perkins had about the Alaska Marine Highway System. COMMISSIONER PERKINS stated the ferry system is part of the road system of the state of Alaska and has been so designated by the state as part of the National Highway System. Commissioner Perkins explained that because of his involvement in Southeast Alaska the Alaska Marine Highway System is an essential portion of the transportation system of Southeast. He intends to support the ferry system as he supports the highway system. Number 191 REPRESENTATIVE JERRY SANDERS asked Commissioner Perkins if he knew how the Administration feels about the construction of new roads in Alaska, such as the Dalton Highway, the Whittier Road and the Cordova Road as well as the possibility of a road to Nome. He asked if there would be progress, on any of these proposed roads, within the next four years. COMMISSIONER PERKINS stated that they are attempting to develop an agenda as to what their policies, priorities and goals would be within the transportation industry. Commissioner Perkins acknowledged that he did not have any answers to Representative Sanders inquires on the proposed roads he mentioned but did state that they will be looked at on a case by case basis. The Commissioner continued that if the road holds an economical justification, then he felt they would proceed with the appropriate measures. The Commissioner was concerned about the justification of the proposed roads and did not feel that the roads mentioned should be built just for the sake of building roads to possibly gain access (open up country) to areas with potential development. The Commissioner felt that the demand for roads in the state, as well as the repair of the roads, has become a much greater problem that needs to be addressed. Commissioner Perkins reiterated the importance in looking at the roads, on a case by case basis, and called attention to the example of the Whittier Road that is currently proceeding through an environmental impact statement (EIS). The commissioner stated that upon completion of the statement, a decision will be made as to what will be done with the Whittier Road. Commissioner Perkins stated he could not second guess the outcome of the EIS or the public comments taken, but was confident that the proposed roads would be carefully studied. He stated that DOT/PF will hopefully make a decision that is in the best interest to the state. Number 237 REPRESENTATIVE MASEK noted that the Department of Transportation has numerous maintenance stations along the Glenn Highway out of Anchorage and along the Parks highway towards Fairbanks that are situated relatively close to one another. Representative Masek questioned the cost to the state of maintaining these stations year round. She inquired about the amount of work in relation to the amount of employees in the summer time. She asked if DOT/PF would consider privatizing some of the maintenance stations. COMMISSIONER PERKINS explained that to date, he had not inquired as to the efficiency of the maintenance effort. He stated that he intends to look at privatizing certain areas for greater efficiency. He doubted that road maintenance, such as the snow plowing efforts, could ever be privatized. The Commissioner pointed out, that no contractor in the state of Alaska owns a plow of effective size. Commissioner Perkins felt that the state will be ultimately responsible for providing the basic services of keeping the major roads clear well into the future. He added that it would be more expensive on the larger roads to perform contract maintenance, although the smaller roads might be contracted out if someone happened to have a more efficient method of maintaining the smaller roads. Commissioner Perkins explained that the people working for DOT/PF are heavily utilized. Commissioner Perkins stated that he has a tremendous amount of respect for the people who sometimes work over 18 hours a day. The Commissioner concluded that there would be room to contract out in certain areas, but did not foresee major roads such as the Parks Highway being completely contracted out. Commissioner Perkins explained that it would not be economically feasible for a private contractor to make a reasonable bid for the maintenance of the major roads in Alaska and that the appropriate equipment was just not held in the private sector. Number 290 REPRESENTATIVE MASEK followed up on Commissioner Perkins point of privatizing. She clarified her question on privatizing by stating that during the summer months, it was costing the state a lot of money to keep the maintenance stations operational. Representative Masek stated that from her own experiences, she believes the private sector would like to get more involved, and it would create more jobs for the people who do not have access to being a state employee and working for the DOT/PF. COMMISSIONER PERKINS indicated that the issue Representative Masek spoke of will be looked into as to whether it would be possible to contract out some of the maintenance. Number 304 REPRESENTATIVE WILLIAMS stated that as we get closer to the budget process, he is concerned about budget cuts on services to various communities. Representative Williams expressed concern that when the snow removal is not carried out in his area, he receives phone calls. Representative Williams inquired as to what some of the budget cutbacks would be. COMMISSIONER PERKINS responded by stating that he would look at greater methods of efficiency within the DOT/PF. He stated the problem involves the workload which is constantly growing. He added that every time a lane is added, it increases the work load in both summer and winter. Over the past ten years the workload of DOT has grown considerably but the funding has basically stayed the same. He expressed concerns with deferred maintenance and that DOT/PF can no longer maintain the highway system the way it should. He further explained that maintenance includes the clearing of brush and willows on the shoulders of the roads. He also included additional work of road surfacing and that DOT/PF did not have the funds available for the maintenance. Commissioner Perkins reiterated that highway maintenance is an enormous problem and if one were to check the history of the appropriations, one would see that they have stayed "flat," but felt this funding would have to be increased. He explained that the roads are wearing out and federal funds are being used for repair. Commissioner Perkins felt the above issues needed to be addressed. He added that there was no time, this year, to come up with any solutions to the maintenance problems, but was hopeful that next year, he will be able to present the Transportation Committee with some solutions in obtaining the appropriate funds. REPRESENTATIVE WILLIAMS asked if Commissioner Perkins was considering cutting back personnel within the department. Representative Williams expressed concerns by stating an example with one of the companies he had worked for in the past in that cut backs were made within the department, but the company was still expected to provide the same amount of services. Representative Williams stated that there was some confusion as to who was responsible for what jobs and there seemed to be an attitude of "well that's not my job, that's not in my job description" type of attitude. Representative Williams asked if the Commissioner had any plans to cut back and be more efficient with manning. Number 315 COMMISSIONER PERKINS stated that DOT/PF was in the process of trying to cut back and he does see efficiency as a goal of his due to the fact there is not much work he could cut out. The Commissioner stated either you have to do less work or else you have to get more efficient. Commissioner Perkins stated that he opted for more efficiency. Again, the Commissioner emphasized the need to look at the people employed by DOT/PF and see about doubling up in some areas. Commissioner Perkins stated that he had instructed the regional directors to examine their organizations for possible reduction of staff. Commissioner Perkins mentioned that a large portion of DOT/PF was funded by the federal government and that operating funds basically funds the maintenance portion. Most of the engineering funds come from federal dollars and not state. The Commissioner said that DOT/PF was looking at methods to free up some of the federal funds in order to accomplish more work with federal dollars. Commissioner Perkins stated that he would look at the general fund dollars from the state and come up with methods to become more efficient in the reduction of the amount of dollars required from both state and federal sources. Number 385 CHAIRMAN DAVIS said that the state of Alaska could obtain a list of areas that the state funds which is not typically the business of the state. Chairman Davis inquired as to these activities within the department. COMMISSIONER PERKINS explained Alaska is one of few states that maintain roads in urban areas. The organization within the state of Alaska is unique to other states. Commissioner Perkins used the example of where he grew up in that the County Road Commission took care of the county roads and smaller towns of approximately one thousand people or so took care of the streets within their cities. The people in those areas were taxed in order to support and maintain the operations necessary and the state only took care of state and federal highways. Commissioner Perkins further explained that it was impractical to compare Alaska's DOT/PF with Oklahoma's DOT due to the fact that Oklahoma mainly built interstates and state and federal highways. Commissioner Perkins used Tulsa as an example in that they do not maintain roads with the exception of the interstates. He added Alaska's DOT/PF was responsible for the service and maintenance of Anchorage, Fairbanks, Juneau and the smaller villages. He said that Alaska's DOT/PF builds and maintains roads where the rest of the country relies on local people with local taxes. He stated this was the major difference in the level of service that Alaska provided, which came with much higher and greater demands than the level of service imposed by any DOT in the rest of the country. CHAIRMAN DAVIS encouraged the Commissioner to pursue the process of converting state maintenance, within the municipalities, over to the respective municipalities. Chairman Davis referred to Title 29 which implies when municipalities are established, they have become selective in what services they will except, and because of this, a lot of municipalities have opted not to except road maintenance authority. Chairman Davis felt that the Commissioner would receive a lot of encouragement from the municipalities. He felt that Anchorage was close to a contract with the state in taking over the maintenance of state roads within the municipality of Anchorage, but also acknowledged that Anchorage was not willing to do it for nothing and are looking for some compensation from the state. Chairman Davis encouraged Commissioner Perkins to pursue conversion of the appropriate contracts. Chairman Davis referred to the actual buildings, public facilities, maintenance and major construction of new facilities, and asked what the variations in handling these issues as opposed to other states. Number 438 COMMISSIONER PERKINS stated that normally you don't see that in other state's DOTs. Usually there is some sort of General Service Administration (GSA) that takes care of the buildings in the state. Commissioner Perkins continued that in Alaska, the department takes care of buildings. He emphasized they don't take care of all the buildings. He further stated that he was not sure of percentages but it was close to 80 percent. He acknowledged that there are other buildings that are maintained by other departments. Within Alaska we do not have all our buildings consolidated in one place, however, DOT/PF has got the bulk of them. Commissioner Perkins stated he intends to work on a plan to pick up deferred maintenance of facilities within the state of Alaska. Commissioner Perkins stated that we also need to look at the potential of consolidating the states buildings together somewhere, either with the Department Transportation, or somewhere else. Commissioner Perkins emphasized there was efficiencies to be gained with centralizing management of these buildings. Commissioner Perkins said the state is building up a considerable deferred maintenance list and added that our buildings are relatively new compared to the buildings say in Massachusetts or Connecticut. He added that we have only started to get into the maintenance of these buildings and as our buildings get older, we will see an increase in maintaining these buildings. Commissioner Perkins expressed the difficulties in getting people interested in the maintenance of the buildings. He acknowledged there are problems that need fixing and there is a considerable dollar value of maintenance that should be going into their repair and maintenance. He indicated he hopes to return to the Transportation Committee with a proposal that will address a solution to the above problems. CHAIRMAN DAVIS asked the Commissioner to state his concerns about a seat or designee on the Alaska Railroad Board and what were his intentions are to sit on that Board, or, if given the option of a designee who would that be. COMMISSIONER PERKINS responded by saying he would sit on the board and commented that the Railroad Board met last month and he plans to continue to be the department's representative on the Railroad board. Commissioner Perkins considered the Railroad Board to be a very important transportation mode in the state. Number 465 CHAIRMAN DAVIS inquired as to the deputy commissioner's involvement and the status of positions filled. He also asked if the Commissioner would introduce any that might be present at this meeting. COMMISSIONER PERKINS stated that DOT/PF will end up with two deputy commissioners which have been authorized. He stated that he plans on being very selective on who he chooses. Commissioner Perkins said that one of the positions has been filled by Boyd Brownfield who was appointed by the Governor. The Commissioner acknowledged that Mr. Brownfield was currently present at the House Transportation meeting. Commissioner Perkins stated that Mr. Brownfield has been involved with the department out of Anchorage and ran the Design and Construction Section and the maintenance and operation side of the Central Region. REPRESENTATIVE MASEK commented that in the area of employees for the department, she has heard several complaints over the last couple of years of teams of employees where there is one supervisor for two employees which makes a total of three in a crew. She indicated she doesn't have the information to back up this, but this is coming from citizens. Representative Masek asked if the Commissioner could look into the situation. COMMISSIONER PERKINS responded by assuring Representative Masek that he would look into the matter. He concurred that if that type of situation exists, it would be dealt with appropriately. The above situation that Representative Masek spook of was a "unexceptable worker verses watcher level" Number 496 CHAIRMAN DAVIS reiterated that Representative Williams had commented on the fact that people in Southeast pay to ride the ferry and this is part of their highway system. As for the road system, people pay for this service through a gas tax, that the more one drives the greater the consumption of gasoline and the more tax is paid. Chairman Davis asked if any consideration or changes are being contemplated in the pricing structure of the Alaska Marine Highway System. Chairman Davis asked if there was any thought or consideration by the department with regards to a gasoline tax increase or decrease. COMMISSIONER PERKINS stated that this would be looked at when looking at a potential revenue source for the funding of maintenance towards the highways. The Commissioner felt he could not say that a gasoline tax increase or decrease would be their recommendation, but did state that the state of Alaska has the lowest tax in the nation at approximately eight cents a gallon with the nations average estimated at seventeen or eighteen cents per gallon. Commissioner Perkins said it was an area the department would look at but currently there are no plans or recommendations proposed on the issue. Perhaps the department will have further recommendations for the next year. CHAIRMAN DAVIS thanked Commissioner Perkins for his attendance and involvement and stated the recommendation hearing held was in accordance with Alaska Statute 39.05.080. He further stated the House Transportation Committee has reviewed the qualifications of the following and recommends the appointment be forwarded to a Joint Session for consideration. Chairman Davis explained that in signing the recommendation, this does not reflect an intent, by any of the committee members, to vote for or against Mr. Perkins during any further sessions, for the purposes of the confirmation. ADJOURNMENT There being no further business to come before the House Transportation Committee, CHAIRMAN DAVIS adjourned the meeting at 8:40 a.m.