HOUSE TRANSPORTATION STANDING COMMITTEE March 9, 1999 1:20 p.m. COMMITTEE CALENDAR DISCUSSION OF DRAFT PASSENGER FACILITY RESOLUTION PRESENTATION: OVERSIGHT HEARING - ANCHORAGE INTERNATIONAL AIRPORT EXPANSION PROJECT TAPE 99-8, SIDE(S) A & B TAPE 99-9, SIDE(S) CALL TO ORDER CHAIR BEVERLY MASEK called the House Transportation Standing Committee meeting to order at 1:20 p.m. PRESENT Members present at the call to order were Representatives Masek, Halcro, Cowdery, Sanders and Kemplen. Representative Hudson arrived as the meeting was in progress. Representative Kookesh was excused. SUMMARY OF INFORMATION Number 0180 MARCO PIGNALBERI, Aide to Representative John Cowdery, gave an explanation of the draft Passenger Facility Charge Resolution. Number 0299 REPRESENTATIVE COWDERY moved that the Committee agree to sponsor the resolution and introduce it to the House. There being no objections, the resolution will be sponsored by the House Transportation Standing Committee and brought before the House. CHAIR MASEK then asked for discussion of the Anchorage International Airport Expansion Project. Number 0419 MR. PIGNALBERI gave the background of the Anchorage Airport Expansion Project. He noted that last year the Alaska State Legislature approved $180 million in bonds which, combined with $26 million in federal highway funds and $25 million in Federal Aviation Administration (FAA) funds, gives the total project price of $230 million. He said that the advertised price tag is $350 million with the off-airport projects included, and that the terminal project is the single largest public works project the state has undertaken. It is a highly visible project and the public has high hopes for it. MR. PIGNALBERI said that some clouds have gathered over the project. The terminal cost has increased by 50,000 square feet and construction cost estimates are $31 million over the original estimate. MR. PIGNALBERI felt that the public is not having enough input on how to resolve the cost overruns and that traffic projections are overestimated. Alaskans want to be proud of this project, he said, and using the legislature's public process is the best way to dispel any clouds of doubt. Number 0881 REPRESENTATIVE HALCRO suggested a subcommittee to address the Anchorage Airport Expansion Project. MR. PIGNALBERI agreed that might be a good idea, and added that the Department of Transportation and Public Facilities (DOT/PF) needs to get more public input on the project. Number 0953 KURT PARKAN, Deputy Commissioner, Department of Transportation and Public Facilities (DOT/PF), presented an overview of the Anchorage Airport Expansion Project. He mentioned that DOT/PF welcomes oversight. He reported that Bob Walsh, Legislative Aide to Representative Richard Foster, has attended nearly every weekly meeting, and had been invited to each of the quarterly meetings and other meetings that were called at the spur of the moment. A discussion ensued regarding Bob Walsh and his affiliation with this project. Number 1228 MR. PARKAN introduced Dave Eberle, Program Director for Gateway Alaska, and Don Ketner, Project Manager for the terminal development portion of Gateway Alaska. Mr. Parkan summed up the bond ratings for the project. DAVE EBERLE, Program Director, Central Region Construction and Operations, Gateway Alaska, presented an overview of the overall project, and he talked about the budget and the schedule for the project. Mr. Eberle stated that the airport project has been a $230 million project from the beginning. Number 1762 MR. EBERLE, in response to Representative Hudson's request for clarification, explained that the Letter of Intent was for $48 million. Besides the $25 million, the other components include rebuilding "runway 6 left 24 right," and have nothing to do with the building of the airport. Also included in that figure is some apron reconstruction, he added. The difference was never meant to be part of the original $230 million project. Number 1948 REPRESENTATIVE HALCRO inquired whether the apron reconstruction was between A5 and A9, and Mr. Eberle said yes. MR. EBERLE went on to go over the project in depth, referring again to the "Project Update" handout. He predicted that the terminal would be open to the public in the spring of 2002. Number 2120 DON KETNER, Project Manager for the Anchorage International Airport Terminal Redevelopment Project, went into a lengthy explanation of the project. He used two large charts which tracked the progress of the current design and how the design has evolved. Tape 99-8, Side B Number 0565 REPRESENTATIVE COWDERY inquired as to the size of the tour bus area. MR. KETNER referred Representative Cowdery to the picture in the handout. He discussed the need for the tour area to be enclosed. REPRESENTATIVE HUDSON asked how they were able to increase the square footage and keep the same cost. MR. KETNER explained that they and the airlines had put in a lot of work looking at ways to control the costs. He referred the committee to the page titled "Schematic Design Scope Requirements," and the foldout following it. He stated that they had to explain to the airlines that the baggage handling system had gone from $2.5 million to $13 million. REPRESENTATIVE HUDSON asked if the airlines would pay for the extra costs directly, and Mr. Ketner said that would be a last resort. Number 0915 MR. KETNER responded to several questions from Representative Cowdery addressing the design plan of the covered walkway, possible future moving sidewalks, and the fact that the airlines own the gates. He explained the car rental area location, and addressed Representative Hudson's question about cost overruns and funding options. Number 1457 REPRESENTATIVE HALCRO mentioned that he had several questions for Morton Plumb, Director, Anchorage International Airport, but Mr. Plumb had left the teleconference phone that he had been on. MR. KETNER and MR. PARKAN answered questions regarding the Rise-Alaska contracts, discussed design and management agreements, amendments and contracting. REPRESENTATIVE COWDERY drew on his experience in the contracting business regarding the cost of making changes, and he wondered if they would be asking for more money before the project is completed. He referred to a DOT/PF report that $14.5 million had been spent in FY 94 or 97 for the project, and asked if this was in addition to the $230 million. MR. PARKAN said he would get back to the committee with that answer. Number 2066 CHAIR MASEK announced that she intended to continue this overview discussion next week in joint session with the Senate Transportation Standing Committee. MR. PARKAN, in response to Representative Halcro's question about constituent and air carrier concerns, stated that nothing regarding the terminal project should affect the leases. He discussed HB 543 from a couple of years ago. Number 2298 REPRESENTATIVE HALCRO said that he had heard from a constituent that the airport was considering expanding into the Sand Lake gravel pit, and he asked if there had been any discussion of that type of expansion. MR. PARKAN noted that there had been some interest in developing that area. He said that DOT/PF is hesitant to go forward on that question until the master plan has been agreed upon. He assured the committee that he will keep them informed regarding this issue. Tape 99-9, Side A Number 0202 CHAIR MASEK indicated that she would get back to Representative Cowdery on the subject of a subcommittee to keep abreast of the project during the interim. REPRESENTATIVE COWDERY asked that DOT/PF keep tour bus companies advised of any changes. Number 0389 ADJOURNMENT There being no further business before the committee, the Committee meeting was adjourned at 3:10 p.m. NOTE: The meeting was recorded and handwritten log notes were taken. A copy of the tape(s) and log notes may be obtained by contacting the House Records Office at 130 Seward Street, Suite 211, Juneau, Alaska 99801-1182, (907) 465-2214, and after adjournment of the second session of the Twenty-first Alaska State Legislature, in the Legislative Reference Library.