HOUSE TRANSPORTATION STANDING COMMITTEE April 21, 1997 2:00 p.m. MEMBERS PRESENT Representative Bill Williams, Chairman Representative Beverly Masek, Vice Chairman Representative John Cowdery Representative Bill Hudson Representative Jerry Sanders Representative Kim Elton Representative Al Kookesh MEMBERS ABSENT All members present COMMITTEE CALENDAR *HOUSE BILL NO. 227 "An Act relating to the Alaska Capital Improvement Project Authority; relating to the powers and duties of the Department of Transportation and Public Facilities; and providing for an effective date." - HEARD AND HELD (* First public hearing) PREVIOUS ACTION BILL: HB 227 SHORT TITLE: CAPITAL IMPROVEMENT PROJECT AUTHORITY SPONSOR(S): REPRESENTATIVE(S) PHILLIPS, Cowdery JRN-DATE JRN-PG ACTION 04/03/97 923 (H) READ THE FIRST TIME - REFERRAL(S) 04/03/97 923 (H) TRANSPORTATION 04/21/97 (H) TRA AT 1:45 PM CAPITOL 17 WITNESS REGISTER REPRESENTATIVE GAIL PHILLIPS Alaska State Legislature Capitol Building, Room 208 Juneau, Alaska 99801 Telephone: (907) 465-2689 POSITION STATEMENT: Presented sponsor statement to HB 227. MARCO PIGNALBERI, Legislative Assistant to Representative John Cowdery Alaska State Legislature Capitol Building, Room 416 Juneau, Alaska 99801 Telephone: (907) 465-3879 POSITION STATEMENT: Testified on HB 227. KURT PARKAN, Deputy Commissioner Office of the Commissioner Department of Transportation and Public Facilities 3132 Channel Drive Juneau, Alaska 99801 Telephone: (907) 465-6977 POSITION STATEMENT: Testified in opposition to HB 227. HENRY SPRINGER, Executive Director Associated General Contractors 4041 B Street Anchorage, Alaska 99503 Telephone: (907) 561-5354 POSITION STATEMENT: Testified in support of HB 227. FRANK DILLON, Executive Director Alaska Trucking Association 3443 Minnesota Avenue Anchorage, Alaska 99501 Telephone: (907) 276-4149 POSITION STATEMENT: Testified in support of HB 227. ACTION NARRATIVE TAPE 97-22, SIDE A Number 001 CHAIRMAN BILL WILLIAMS called the House Transportation Standing Committee to order at 2:00 p.m. Members present at the call to order were Representatives Williams, Masek, Cowdery, Hudson, Sanders and Elton. Representative Kookesh arrived at 2:01 p.m. and Representative Masek arrived at 2:04 p.m. HB 227 - CAPITAL IMPROVEMENT PROJECT AUTHORITY Number 022 CHAIRMAN WILLIAMS announced the first order of business to be HB 227, "An Act relating to the Alaska Capital Improvement Project Authority; relating to the powers and duties of the Department of Transportation and Public Facilities; and providing for an effective date", and stated that Representative Gail Phillips would present the bill. Number 035 REPRESENTATIVE GAIL PHILLIPS read the following sponsor statement into the record: "The purpose of HB 227 is to increase public involvement, stability and discipline in capital project planning for the state of Alaska. "Planning for Alaska's capital improvement projects is presently carried out by the Planning Division of the Department of Transportation and Public Facilities, DOT/PF. Research and planning is carried out by three regional planning teams, Central, Northern and Southeast. The Regional Planning Teams coordinate with the local governments, including AMATS (Anchorage Metropolitan Area Transportation Study) and FMATS (Fairbanks Metropolitan Area Transportation Study), in their regions, Anchorage and Fairbanks. They feed their regional plans into the Statewide Planning Team in the Juneau headquarters. Headquarters Juneau consolidates the local and regional plans into statewide plans. Statewide plans are required for internal management and to meet requirements of federal funding. "House Bill 227 comes into play at the level of statewide prioritization and funding alternatives. It would not change the basic planning process now in use. It will change the method by which projects are rated, prioritized and submitted to the governor and legislature. "Whereas currently, DOT/PF sets up a Project Evaluation Board (PEB) to prioritized projects, HB 227 establishes an independent Authority, the Alaska Capital Improvement Project Authority, ACIPA, to perform the functions that lead to finalizing our capital spending priorities. The authority will have all the expertise available form DOT/PF's Planning Division. It will have greater public participation and community sensitivity built into it by virtue of the diverse composition of its members. And, it will be more independent of political influence by virtue of the staggered tenure of its appointees. "Despite efforts by DOT/PF over the years to make the planning process more inclusive and transparent to the public, capital project planning remains a dark science to most Alaskans. We don't know how or why Project A gets funded before Project B, and why Project C doesn't get funded at all. Part of the problem is that there are several different plans arrived at by different methods. All are subject to political intrigues between the governor and legislature. "Planning is hindered by a lack of continuity at the executive level. DOT/PF Commissioners have an average tenure of under two years. The permanent professional planners get committed to the projects they work on and the people they work with. "The provisions in HB 227 are intended to make the capital project planning process more comprehensive, coherent to the public and stable in its role of building Alaska's infrastructure. The authority will have a single purpose mission rather than be entangled with the multi-purposes of the governor, the legislature and DOT/PF. "This bill also vests in the authority the power to set tolls on toll facilities and to establish signing standards and speed limits for Capital Improvement Projects. "The sponsors of HB 227 look forward to the constructive critique, and changes where necessary, of this legislation." REPRESENTATIVE PHILLIPS stated that Representative Cowdery and his staff will be carrying this bill and questions should be directed towards them. Number 372 REPRESENTATIVE ELTON asked which authority would be pre-eminent in the case of capitol projects that effect the Marine Highway System. Number 397 MARCO PIGNALBERI, Legislative Assistant to Representative John Cowdery, contemplated this authority to be pre-eminent, all other transportation plans would be components of a single state wide plan that is approved by this authority. Number 436 REPRESENTATIVE JOHN COWDERY stated that he just received the fiscal note and asked Mr. Pignalberi to comment on it. Number 464 MR. PIGNALBERI replied it is a matter of assumptions that had to be made to come up with a fiscal note, which are different then the assumptions of the creators of the legislation. He stated that the $375,000 for personal services could be decreased by $236,000. He stated that supplies and equipment could be decreased by $38,000 to $40,000 and travel decreased by $20,000. At the first glance about $295,000 could be cut from the fiscal note. Number 559 REPRESENTATIVE COWDERY stated that it was his understanding that we were going to utilize DOT/PF's expertise in what they are now spending on their own plans and asked Mr. Pignalberi how it would interface with this legislation. Number 618 MR. PIGNALBERI replied that of the many levels in the planning process, the one that would be supplanted with this authority is the evaluation board, which does the final prioritization and identifies funding sources. That is the activity that the planning authority will execute, consisting of public citizens from around the state as opposed to officials in the DOT/PF. He stated that it is only the expenses associated with this, that changes. DOT/PF was using five or six people in house to do it where the authority would be using a seven member board of people around the state, as a result the difference of cost should not be that great. Number 688 REPRESENTATIVE COWDERY asked Mr. Pignalberi's what is happening to the bill on the Senate side. MR. PIGNALBERI replied that the President of the Senate has introduced the bill and it has two committee referrals, transportation and finance. Number 728 KURT PARKAN, Deputy Commissioner, Office of the Commissioner, Department of Transportation and Public Facilities, apologized that the commissioner was not able to be here and provided the committee with the commissioner's written comments. He stated that the department does not support the establishment of this authority. The current process for prioritizing and selecting projects is stable and meets the states needs. He stated that the process is subject to extensive public review and comment. He felt that the program is not broken and does not need to be changed. He stated that the fiscal note is the best estimate they had, given the way the bill was written, and based on what the department thought was the intent of the bill. He stated that the authority can add staff without restrictions on the number of people or on the amount of travel. He stated that the section that talks about the authority's ability to review, revise as appropriate and approve the following plans and programs, indicated that they were going to need adequate staff, that had some expertise in the different modes of transportation, therefore just a director and administrative assistant would not be enough to meet their needs. In regards to travel, the department estimated that they would need to meet once a month to review and approve modifications to any projects. He stated that it is a concern, that the authority would not be as responsive with the Alaska's short building season. The department is concerned that the funding would only be general funds and with the staff, federal funds would not be available for the authority and general funds would have to come out of a portion of the DOT/PF budget. The department is concerned with the impact it would have on the biggest general fund portion, which is maintenance and operation. He stated that the bill refers to the authorities power to deal with construction and maintenance programs, the department feels that would mean that the authority would have the power to determine what kind of maintenance is done on the roads and airports throughout the state. He stated that the department is not sure what impact the bill will have on Metropolitan Plan Organization, MPO's such as AMATS, whether the Anchorage municipality will have to get approval of the authority. He referred to Representative Elton's question and felt that there are conflicts between what the responsibilities of the authority would be and the Alaska Marine Highway Authority, because the bill requires the authority to approve plans for the marine highway. Number 1044 REPRESENTATIVE COWDERY referred to Mr. Parkan's statement that the current process was working and stated there have been the problems in the department for at least the 15 years. He stated that the department is opposed to any changes. The private sector is in support of the bill and there are employee's of DOT/PF that feel that current process is not working. He stated that priorities are interrupted to serve the party in control. He stated that if the current process was working there wouldn't be any one interested in the bill. He stated that he did not understand his comment on federal funds not being available to do the projects and asked him to elaborate on that. Number 1171 MR. PARKAN responded that his comment was not that the project would not be available but that the funding for the authority with the staff that they need would not necessarily be available for federal funding because it is a duplicate department. Number 1194 REPRESENTATIVE COWDERY asked if Mr. Parkan could provide a written statement of the amount of funding it would take to make this work. Number 1221 MR. PARKAN asked for more clarification. Number 1243 REPRESENTATIVE COWDERY replied that Mr. Parkan stated that the fiscal note may be lower now that he had heard Mr. Pignalberi's statement. Number 1256 MR. PARKAN stated that the fiscal note is pretty good as it is right now and he was referring to the way the bill was written to allow the authority to hire any staff that is necessary to do its job to revise projects, the fiscal note reflects this. Number 1300 REPRESENTATIVE COWDERY asked Mr. Parkan if he is saying that if this bill becomes law, he envisions DOT/PF to remain the same as it now and the authority would just be another layer on top. Number 1319 MR. PARKAN replied that the bill adds another layer of government that the department would have to respond to as well as to the legislature and the governor. He stated that the department is interested in improving the public comment and public process programs. The department now has a set of criteria that is used so everyone can see how projects compete across the state. He referred to the representation that the authority has on the four judicial districts, there would be two from each judicial district except one judicial district would just have one person representing it. This bill would not give equal representation across the state. Number 1409 REPRESENTATIVE COWDERY asked that Mr. Parkan could work with his staff on his concerns. Number 1430 REPRESENTATIVE JERRY SANDERS asked if he could show on the page two of the Organization Charts of AASHTO Member Departments, where the authority would fit. MR. PARKAN replied that he could not answer that question, he was not sure where it would link in. Number 1472 REPRESENTATIVE BEVERLY MASEK referred to Section 2 that states "The department shall annually prepare a capital improvement project construction and maintenance program for state-owned airports and air navigation facilities", and asked if the department does annual reports. Number 1522 MR. PARKAN replied that the way airport projects are approached is that there is a set of criteria that are scored on a statewide basis. He stated that every year projects are submitted in the capitol budget and that is the reporting that the department does. There is also an ongoing planning process for statewide aviation. Number 1581 REPRESENTATIVE MASEK stated that under the departments stip plan, projects are rated on safety and how much support there is on the local level and asked if there are any problems with how the projects are rated. Number 1621 MR. PARKAN stated that safety issues and communities willingness to contribute to a project will add weight to the project. He stated that generally speaking it is going very well. Number 1664 REPRESENTATIVE MASEK stated that she has some grave concerns with how the authority would be set up. She stated that she did not know how a board would sit in the state of Alaska being that it is so diverse. She asked if there were any plans to put together a report that deals with the state owned airports and highways, regarding construction and maintenance. Number 1720 MR. PARKAN replied that there is a construction plan and a maintenance task force that is looking at ways of maintaining more efficiently and cost effectively. He stated that there isn't a plan that combines construction and maintenance as this bill envisions. He stated that the department is concerned with how the authority would deal with Alaska as it is a diverse state and is one of the most multi-modal states in the country, with the dependence that we have on aviation, marine highways and roads. Number 1766 REPRESENTATIVE ELTON asked if railroads, schools and court buildings would fall under this authority. He stated educational facilities are specifically mentioned in AS 44.42.055 page 3, line 8. CHAIRMAN WILLIAMS stated that he would like to hear from the people that are here to testify and then go through the bill. Number 1818 BOB RUBY, Division Administrator, Federal Highway Administration, stated that it appears to him that the bill does a lot more than select projects. The Federal Aid Highway program in this state is about $200 million a year and can be administered under the provisions of this bill, depending on how they are interpreted. He stated that the majority of the states, 33 states, operate with similar authorities, all 13 of the western states operate with similar authorities. These authorities provide policy guidance to the respective DOT/PFs. He emphasized the word policy, as they are not a parallel management group to the DOT/PFs. He stated that a major benefit of the program is continuity, provided by the authority, as the average commissioner term since statehood is 1.86 years. He stated that the bill requires that members have geographic diversity, staggered terms and expertise in the major functions of the DOT/PF. MR. RUBY stated that he is concerned with the provision that allows the authority to submit proposals independently of the DOT/PF's program. Proposals which are presented outside of the public involvement transportation planning processes are not eligible for federal aid funds. He stated that in most states the authority has very little problem convincing the DOT/PF's commissioners to carefully consider their proposals and desires for inclusion in the overall program. He stated that he would have a lot of trouble with an independent path. He stated that there is concern over the provision of staffing of the authority, it is unclear as to what the intent is. In most states the authorities have an executive secretary, and the authorities rely on the professional staff of the DOT/PF to address their concerns. He stated that it would be difficult for federal highways to approve a program which involves a separate professional staff reporting solely to the authority and an additional professional staff reporting to the commissioner. He stated that this would cause confusion as the administration deals with one entity that speaks for the state on federal aid programs. He would be reluctant and probably could not deal with two lines of authority. He stated that the bill exempts the authority from review of the operating budget. Since completion of the project and program activities under the general policy guidance of an authority, would depend on the department's operating budget to perform the task, consideration should be given that the authority would have some type of review role on the operating budget to assure that there are funds to pursue their policies. He stated that previous testimony had indicated that the intent of this bill was to replace the PEB process. He stated that the bill does a lot more than that, it talks about the long range plan, about design, construction and maintenance of projects. He stated that the PEB is an evolving process and is still improving, it might not be efficient to jump in on top of that process. He stated that the concept of an authority is very positive and reserves judgement on the individual details and some of the provisions. He stated that continuity is something that is worth pursuing as it has been a big problem. The gavel was turned over to Vice-Chair Masek. Number 2081 REPRESENTATIVE SANDERS asked if he could show on the page two of the Organization Charts of AASHTO Member Departments, where the authority would fit. Number 2105 MR. RUBY stated that the commissioner would go to the authority for review and approval of all plans and programs and once that approval is received he would continue though the governor and the legislative session. He stated that in most cases the commissioner would be off to the side of the transportation authority and in direct line with the governor. The authority would not be between the commissioner and the governor. Number 2135 REPRESENTATIVE ELTON stated that he would think the authority would be between the commissioner and the governor's office because on page 3 line 16, it states, "The capital improvement project budget approved by the authority shall be submitted to the governor for inclusion in the state capital projects budget." He stated it sounds like this is not advisory to the commissioner but instead would submit the budget that they have revised and approved directly to the governor's office. Number 2165 MR. RUBY stated that it is correct that it is not an advisory role and it is an approval that the commissioner needs before he goes to the governor. He can not bypass the authority or do something contrary to their desires. Number 2181 REPRESENTATIVE SANDERS asked in that case it would put the authority between the governor and the commissioner. Number 2187 MR. RUBY stated that for approval of projects that is a step that the commissioner needs before he can go directly to the governor but it does not put them in the authority for all actions between the commissioner and the governor. Number 2202 REPRESENTATIVE HUDSON stated that he was trying to figure out the practical application of this having been a commissioner, and having authority by the legislature for various programs in management. He felt that there needs to be caution in putting this together that ther isn't any kind of impediment to Alaska's timely appeal to the feds for projects that are on the table. He stated that the feds need to know the continuity of the state's transportation plans that are going to use any kind federal money. He asked if that continuity and the flow of responsibility is maintained in this bill. Number 2266 MR. RUBY stated that he sees a lot of problems within the bill. It is the authority concept that is used in the majority of the states very successfully. The continuity issue is not only the long range plan and where we are going but focusing on one type of project under one commissioner instead of two years later abandoning all those projects and picking up a new series of projects with each commissioner. He stated that most projects take five to seven years to develop, and this is where the continuity factor is a major benefit. Number 2313 REPRESENTATIVE HUDSON stated the Federal Highway Authority approves much of the Marine Highway Authority and wanted to make certain that these plans flow through some sort of common transportation plan from the road connections to the marine highway. He stated that aviation is a stand alone entity. He stated that it looks like the commissioner takes his authority from the authority and yet the feds work through the commissioner. He stated that we would want to know if working through this authority provides us the opportunity to access the funds in a timely manner and gain the necessary approval. He stated that he did not want us to lose a satisfactory relationship with the Federal Highway Authority. Number 2449 MR. RUBY stated that the administration deals with the commissioner and not with the transportation boards. TAPE 97-22, SIDE B Number 010 MR. RUBY stated that there needs to be a relationship between the Marine Highway Board and the commissioner and that the chain of command be maintained. The gavel was turned over to Chairman Williams. CHAIRMAN WILLIAMS stated that on the Marine Highway Authority the commissioner is on that authority. MR. RUBY stated that the way Title 23 is set up, they deal with the appointed head of the transportation department for all federal funds. Number 031 REPRESENTATIVE COWDERY stated that the intent of the bill is for the system to work better than it is now. He stated that he would be working with Mr. Ruby's division to address all of his concerns in the bill. Number 116 HENRY SPRINGER, Executive Director, Associated General Contractors, testified via teleconference from Anchorage, that the association has 600 members and that he was a former employer of the DOT/PF for 25 years. He stated that the association is in support of the bill. He stated that the lack of stability has been in the department for 28 years. He stated that there is a steady erosion of money used in non-contruction and non-DOT/PF activities, such as being used for environmental safety. He stated that in the last 25 years the money spent on non-contruction items has grown from 8 percent to 38 percent. He stated that maintenance has fallen behind. He sees the authority as replacing the headquarters function of planning and programming and would eliminate the majority of the 28 positions that are in that position right now. It appeared to him that 1.7 million dollars could be saved and used in other federal aid activities such as construction. He stated this would not change anything in the regional planning and programming efforts, all the public involvement processes would remain on the regional levels. The gavel was turned over to Vice-Chair Masek. Number 349 REPRESENTATIVE COWDERY asked Mr. Springer if he thought everything was working fine in DOT/PF. Number 381 MR. SPRINGER replied that what there has been up to now is not working. He stated that there can not be a valid transportation plan, especially a multi-modal plan by not having some kind of authority established that brings all the public comments together. Number 448 REPRESENTATIVE COWDERY asked if he had a chance to look at the fiscal note. Number 494 MR. SPRINGER stated that he could not comment on the fiscal note because he has not seen it. Number 556 FRANK DILLON, Executive Director, Alaska Trucking Association, testified via teleconference from Anchorage, conceptually in support of the bill. He stated that from the association's perspective this bill is not an attack on the DOT/PF, rather a help to the department allowing them to carry out their planning process. He stated that there has been many plans and projects that have never been carried out. Establishing an authority is a good idea. He stated that the association wants to help DOT/PF do a better more comprehensive job. Number 678 VICE-CHAIR MASEK stated that there are more people who would like to testify but the committee is out of time and will continue with testimony the next time the committee takes up the bill. ADJOURNMENT Number 751 VICE-CHAIR MASEK adjourned the House Transportation Standing Committee at 3:02 p.m.