JOINT ARMED SERVICES COMMITTEE April 6, 2000 12:30 p.m. SENATE MEMBERS PRESENT Senator Tim Kelly, Co-Chair Senator Drue Pearce Senator Gary Wilken Senator Pete Kelly Senator Loren Leman HOUSE MEMBERS PRESENT Representative Eldon Mulder, Co-Chair Representative Lisa Murkowski Representative Gene Therriault Representative Reggie Joule Representative John Harris PUBLIC MEMBERS PRESENT Alan Walker Jake Lestenkof (via teleconference) Dean Owen (via teleconference) Chick Wallace (via teleconference) George Vakalis (via teleconference) OTHERS PRESENT Senator Randy Phillips Representative Sharon Cissna Representative John Coghill Representative Alan Austerman Representative Norm Rokeberg Janice Nielson, US Army-Pacific Legislative Liaison WITNESS REGISTER Mr. Paul Fuhs PO Box 20664 Juneau, AK 99802 Mr. Michael Keene Anchorage Economic Development Corporation 550 W. 7th Ave. Anchorage, AK Mr. Curt McGee Vice President of Real Estate Cook Inlet Region Incorporated 2525 C Street Anchorage, AK ACTION NARRATIVE TAPE 00-03, SIDE A Number 001 CO-CHAIR TIM KELLY called the Joint Armed Services Committee meeting to order at 12:37 p.m. Committee members present were Co- Chair Tim Kelly, Senator Drue Pearce, Senator Pete Kelly, Senator Gary Wilken, Senator Loren Leman, Alan Walker, and General Jake Lestenkoff (via teleconference). Co-Chair Kelly noted that the House members were attending a House Majority Caucus and would arrive shortly. INTRODUCTION OF MEMBERS AND GUESTS MR. CHRIS NELSON, Joint Armed Services Committee staff, introduced Mr. Paul Fuhs. MR. FUHS introduced Michael Keene, Transportation Director of the Anchorage Economic Development Corporation (AEDC). Mr. Fuhs informed committee members that he and Mr. Keene have been working on logistics issues in Anchorage and that Mr. Keene has taken the lead on the military logistics initiative. Mr. Fuhs also introduced Mr. Curt McGee, Vice President of Real Estate for Cook Inlet Region Incorporated (CIRI). ACTIVITIES REPORT MR. NELSON informed committee members that since the last meeting in January, a significant number of general officer visits have occurred and several committee members have participated in important conferences. Lt. General John Costello, the Commanding General of the United States Army Space and Missile Defense Command, visited Alaska from March 6 to 9. Lt. General Costello wanted to view the proposed sites for national missile defense deployment in Alaska at Fort Greeley. He was given a thorough tour of the facilities. His focus was on quality of life issues for soldiers and their families. MR. NELSON stated that he and Mr. Vakalis represented the JASC at the Office of the Secretary of Defense Service Community Conference. That conference focussed on Base Realignment and Closure (BRAC) issues. The annual conference is hosted by the Secretary of Defense for all branches of the armed services and the communities that have suffered base closures. The Army presentation on BRAC noted that, for the very first time, the service chiefs raised some questions about BRAC. The Department of Defense claims there is 22 percent more base structure available than force structure, however the branches of the armed services disagree. MR. NELSON pointed out that from April 24 to 26 the JASC will be hosting Lt. General Ron Kadish, the Commanding General of the Ballistic Missile Defense Organization, and Major General Willy Nance, the U.S. Army's project coordinator for national missile defense. Both Lt. General Kadish and Major General Nance will visit the military facilities in Anchorage and tour the Clear, Ft. Greeley, Ft. Wainwright and Fairbanks' facilities. The Alaska National Guard will fly them to Shimea (ph) for a tour of Erickson Air Station. Number 484 CO-CHAIR KELLY announced that Representatives Murkowski and Harris had arrived. MR. NELSON continued his activities report. The Association of the U.S. Army Symposium on Space and Missile Defense is scheduled to occur on June 8 and 9 in California. During the month of June, members of the armed forces are transferred to other assignments. General Dean Cash, the Commanding General of the U.S. Army Alaska, has received a new assignment in Washington, D.C. and will be replaced by Major General Loveless. The change of command ceremony will take place on June 16. CO-CHAIR KELLY asked Mr. Nelson to update the committee on the National Ballistic Missile Defense System. MR. NELSON noted that Major General Nance and Lt. General Kadish will be able to provide an excellent update when they visit Alaska. The integrated flight test number 4, which is the next intercept test, has been rescheduled to June. The President's decision will be forthcoming in August. CO-CHAIR KELLY noted that a recent newspaper story reported that the costs of that system are higher than the initial estimate. MR. NELSON stated the costs have increased because the scope of the program has increased. When the program was initially announced, a total of 20 interceptors was envisioned. The military then looked at the emerging threat and felt it would be more appropriate to have 100 missile interceptors. As the program takes longer, development costs increase, however the main factor driving the cost increase is the expanded scope of the program. CO-CHAIR KELLY noted that Representatives Coghill and Cissna had joined committee members. He asked that the committee return to the approval of minutes at this time. APPROVAL OF MINUTES SENATOR PEARCE moved to approve the minutes of the meeting held on January 31, 2000. There being no objection, the minutes were approved. CO-CHAIR KELLY announced that Janice Neilson, legislative liaison for the U.S. Army Pacific, was participating via teleconference. Number 898 NEW BUSINESS MR. ALAN WALKER discussed a proposed citation to be presented to the Juneau U.S. Coast Guard station. The Juneau station, after an inspection this year, ranked number one in the nation for small boat stations - quite an accomplishment especially when Alaska's adverse weather conditions are factored in. The Juneau station had a total of five discrepancies on this inspection; the average was 77 and the previous all-time low was 17. He recommended that the committee approve the citation. SENATOR WILKEN moved to approve the citation. There being no objection, the citation was approved. [The committee watched a video about the Northern Edge training program sent by Lt. General Thomas Case, U.S. Air Force, Commanding General, Alaska Command.] Number 1245 SENATOR WILKEN said that he has made many trips to Northern Edge and is always impressed by what he sees. He noted the military has suggested that the legislature designate a "Northern Edge Day" during the first year of each legislative session so that the military can host the legislature at Northern Edge. He moved that the committee send a letter to the presiding officers of the House and Senate and to the military commanders in Alaska asking that such a day be designated. CO-CHAIR KELLY asked if Senator Wilken was implying that a C-130 would take legislators from Juneau to Eielsen Air Force and Ft. Greeley for the day. SENATOR WILKEN said that is a possibility. He added that he believes it is important that legislators understand they are expected to attend. SENATOR PEARCE noted that the naval component of Northern Edge is becoming more important as the Coast Guard and Navy play a greater role. She suggested informing the commanding officers that legislators are interested in touring the water-based facilities on alternate years. CO-CHAIR KELLY asked Mr. Nelson to prepare a letter to the presiding officers of the legislature and to the commanding officers of the military in Alaska. REPRESENTATIVE COGHILL pointed out that it might not be wise to have all legislators on one airplane in case of a mishap. CO-CHAIR KELLY stated that will be taken into consideration and then asked Mr. Nelson to brief the committee on the interim meeting schedule. MR. NELSON suggested that the committee hold its next quarterly meeting on June 5, 2000 at Elmendorf Air Force Base. The U.S. Army Corps of Engineers will brief the committee on its role in national missile defense. He recommended that the fall quarterly meeting be held at Ft. Wainwright. He noted that although committee members have expressed an interest in meeting in Kodiak, that meeting is dependent on transportation. He pointed out the August launch in Kodiak has been postponed. CO-CHAIR MULDER reminded Mr. Nelson to schedule a discussion on the issue of the citizens' advisory committee during the June 5 meeting. MR. NELSON agreed and noted another key date this summer is the annual meeting of the National Association of Installation Developers (NAID) on August 5. Representative Harris and Mr. Vakalis represented the committee at the last NAID meeting. He urged committee members to consider attending the August meeting. CO-CHAIR KELLY announced that the next agenda item is a presentation by the Anchorage Military Logistics Initiative Group. Number 1671 PAUL FUHS, Anchorage Military Logistics Initiative Group member, made the following comments. Currently the U.S. Department of Defense is involved in a major analysis of its logistics management systems. About $80 billion of the military's $250 billion annual budget is spent on logistics. The National Defense Transportation Association held its meeting in Anchorage last year and discussions revolved around using private carriers. He has been working with AEDC and some of the carriers to explore what that might mean from the standpoint of the contribution to the military mission in terms of war readiness and cost savings and the economic opportunities it might provide for Alaska. MR. MICHAEL KEENE, Transportation Director of the Anchorage Economic Development Corporation, provided a packet of information to committee members containing information about the AEDC and the global distribution center for the Northern Hemisphere, which AEDC believes Alaska has the potential to be. The group has had the help of Senators Stevens and Murkowski and Representative Young. They visited Washington, D.C. three times in the past few months to demonstrate Alaska's potential as the military's mobility hub for the Northern Hemisphere. Prior to going to Washington, D.C., the group met with Lt. General Thomas Case to review the group's approach which is to establish Anchorage as the global military logistics hub based on a partnership between private industry and military contractors. A third party logistics handler would do all of the warehouse work; shipping, ordering, and parts distribution for the military. The military indicated it wants this facility to be located near the Anchorage International Airport, not at a military base, because the military wants to take advantage of Anchorage's infrastructure. This joint project involves Alaska's Congressmen, the University of Alaska, the Municipality of Anchorage, and the Anchorage International Airport. MR. KEENE referred to a report in members' packets entitled "Fiscal Year 2000 Logistics Critical Success Indicators." That report points out that Anchorage could provide the military with its needs for its fighting forces. The military suggested that it wants its logistics operation near the airport because it does not want its men and women in uniform doing logistics work that private industry could do. The report also points out that Anchorage is the number one cargo land and weight airport in the United States. Anchorage is closer to most of the destinations in the Northern Hemisphere than any other one location. Anchorage is nine hours from 95 percent of the industrialized world. The AEDC is trying to work with the military and the other interested parties to market the military logistics capability in Anchorage. MR. CURT MCGEE, Cook Inlet Region Incorporated (CIRI), showed committee members a map of the Anchorage area including the airport and industrial land. Anchorage airport cargo traffic is expected to double over the next 20 years and if Anchorage is ever to take advantage of the logistical-type businesses that could come about during that time, a location for those businesses must be determined. Anchorage has about 1,000 acres of land zoned for industrial use, mostly scattered up and down the old and new Seward Highway. CIRI has come up with the idea of using Fire Island, of which 4,000 acres of land is vacant. CIRI owns 3,000 of those acres; the other 1,000 acres are owned by the federal government. The group proposed that airport officials consider Fire Island for additional runway space or for logistics development. To put runways on Fire Island, the air space around Anchorage must be studied. The group has contracted with a firm named Landum (ph) and Brown to do such a study to see how much the capacity could be increased. That study should be completed in about 45 days. If a runway is placed on Fire Island, a lot of noise could be moved out of the Anchorage International Airport. Access to Fire Island must be considered. The latest idea is to use a suction dredge to bring material from the floor of Cook Inlet to build a causeway, which is estimated to cost $30 million. MR. MCGEE produced an aerial picture showing several runway configurations and the causeway route across the mudflats. Access to the causeway could be gained on Raspberry Road and/or from a tunnel underneath the existing North-South runway. Fish migration and other environmental impacts are of concern; the Environmental Impact Statement process should take several years. Number 2189 SENATOR LEMAN said the alignment of the proposed North-South runway on the aerial map differs slightly from the map in members' packets. He asked if those maps present two different options. MR. MCGEE said yes and that the airport space study should determine the best alignment and how it will affect departing aircraft and traffic from Elmendorf Air Force Base. SENATOR LEMAN asked if a revised proposal for a port on the North side of Fire Island could be integrated with the new runways to allow for multiple use. MR. MCGEE said yes but the only caveat is that the port could not be located directly underneath the approach to the runway. MR. FUHS referred to a 12 page document in members' packets and noted it contains the group's mission statement that was used as part of its request to meet with Pentagon officials and the business cards of everyone the group met with. He noted that the group met with the very top policy makers and was told that although the military has a global mission in terms of logistics, it has always divided the world into two pieces. The Asian command is supplied from the West Coast; the European command is supplied from the East Coast. When looking at a place on U.S. soil to consolidate those two commands, Alaska makes the most sense. Alaska has more airlift capacity and it is the number one air cargo port. Some of the overseas locations have political risk. The military is concerned that in some areas, such as Korea, chemical- biological-radiological contamination of the equipment may make it unusable. MR. FUHS continued. Some supplies are carried on Navy ships but getting the supplies from the ship to shore to supply the troops is problematic. In addition, some of the ships are so full, they cannot take on new materials. Admiral Evero (ph) was very interested in the idea of a port so that supplies can be loaded and unloaded. Military officials were also very interested in the idea of a sea-air link. Equipment would be brought by sea to Alaska, warehoused and then air freighted when needed. Many of the current base depots are political artifacts of the old system. When the military did all of the shipping on its own airplanes, bases could be located anywhere. None of those bases are located near the modern transportation hubs, except in Memphis, and that base has been turned over to FedEx. FedEx operates it for packages of less than 150 pounds. As General Ralston pointed out, delivery from Anchorage would be one day faster than from Memphis. TAPE 00-03 Side B Regarding maintenance, MR. FUHS noted that the military equipment must be maintained and recalibrated. A lot of the equipment is modular such as plane navigation systems and electronic weapons components. The military pointed the group toward several contractors it has used to do an analysis of the benefits of Anchorage as a global hub. The group has developed a scope of work for that analysis and it has received a bid for $200,000 from Price Waterhouse. That analysis could be completed in two months, in time for the upcoming quadrennial defense review. Every four years the military reviews all of its systems and that review will begin in October. AEDC has requested that the legislature consider appropriating $200,000 in the capital budget for the study. REPRESENTATIVE MURKOWSKI asked whether the Department of Defense would pay a portion of the $200,000. MR. FUHS replied the group asked the Department of Defense but it is too late in the year. They also asked Senator Stevens but if they wait for an appropriation next year they will miss the quadrennial review. The military has reviewed the scope of work, however, and the group has asked that the Defense Logistics Agency or the U.S. Transportation Command to oversee the study, which they are willing to do. CO-CHAIR KELLY asked who would conduct the study. MR. FUHS replied that Price Waterhouse was the most responsive company. CO-CHAIR KELLY asked who would sponsor the study. MR. FUHS replied the AEDC. CO-CHAIR KELLY asked how AEDC would avoid the "taint" of choosing its own consultants. MR. FUHS replied the names of credible consultants were given to AEDC by the Department of Defense. REPRESENTATIVE MURKOWSKI asked if the study is not presented before the quadrennial defense review, it will not be discussed again for four years. MR. FUHS said it will be much more difficult for AEDC to submit the proposal. They were told they would be much further ahead if they can get the study in before the review. REPRESENTATIVE MURKOWSKI asked if it will be possible to submit the proposal after the review takes place, in case the money is not available to do the study now. MR. FUHS said they will do their very best to get involved at any point they can, however, doing the study now would be more efficient and provide a higher chance of success. CO-CHAIR MULDER asked what entities will be arguing against the development of the new logistics center. MR. FUHS said the existing depots in Georgia, Oklahoma and other places would be concerned because the Department of Defense wants to consolidate and do another BRAC round on depots. This proposal leapfrogs over that whole scenario, however, because it uses private sector contractors. It does not create a new military base or depot. CO-CHAIR MULDER asked Mr. Fuhs if he could give an estimate of the volume of the support apparatus that goes along with sending troops to combat areas. MR. FUHS replied the total spent is $80 billion per year - one third of the defense budget. In Anchorage right now, contractors supply $23 million worth of supplies per year, primarily food and medical supplies. Number 2139 SENATOR PEARCE commended AEDC and CIRI for the work they have done and asked how the Alaska Department of Transportation and Public Facilities (DOTPF) will be involved as the owner and operator of the Anchorage International Airport. MR. FUHS said DOTPF has been involved at every level. DOTPF has been briefed many times and it put forth the proposal to Senator Stevens for the tunnel under the North-South runway. That tunnel needs to be constructed for the airport anyway to take the traffic off of Raspberry Road and Northern Lights Boulevard. Regarding the Fire Island development, the group proposed, and the airport accepted, that alternative as a plan option. It is formally in the planning effort. The proposal has the support of several community councils and the Mayor. DOTPF has been very cooperative in this whole effort. SENATOR PEARCE commented that she supports expanding military logistics in Anchorage but not if it will mean additional noise that is not abated in some manner by DOTPF and the airport. She hopes these discussions will move DOTPF forward toward making difficult and costly decisions. She thought the CIRI idea would go a long way. She noted that all of the current cargo carriers have spent a significant amount of money building cargo facilities at the Anchorage International Airport. She asked how those carriers are involved and whether they are supportive of the adjacent site. MR. FUHS explained that the group briefed all of the cargo carriers at the very beginning. The carriers said that although it is unlikely they would move, they would support additional land being made available because of the congestion and impacts on the community. A tunnel built under the North-South runway would make landings at Fire Island workable. SENATOR PEARCE asked if those carriers would not be precluded from using Fire Island for takeoffs and landings and for servicing their jets long distance. MR. FUHS said that is correct or, possibly all of the transients could be put out there to reduce noise. They do not need much in the way of facilities because they are doing tail-to-tail transfers. REPRESENTATIVE ROKEBERG asked how that will affect the landing fee revenues at the airport. MR. FUHS explained that CIRI's position is that the airports should be part of the Anchorage International Airport system, whether managed by DOTPF or a port authority. CIRI has indicated its commitment to dedicate those lands for the runways to the airport system. CO-CHAIR KELLY asked if CIRI owns Fire Island. MR. FUHS replied CIRI owns 3200 acres of Fire Island. The remaining 1,000 acres are owned by the federal government - the FAA and the Coast Guard. The FAA plans to eventually move the VOR as it moves in more microwave and GPS landing systems. CO-CHAIR KELLY asked if it is possible to bring a blue water ship into Fire Island and transfer directly from large aircraft to a ship. MR. FUHS said it is. The depth off of the Northeast point of Fire Island is 65 feet. There are other issues in terms of currents and navigation and the group has asked the marine pilots in that area provide information on what the navigation issues are. CO-CHAIR KELLY commented that an ocean link to a major airport is a clear advantage that most communities do not have. MR. FUHS said that Admiral Evero (ph) of the Navy was extremely excited about this idea and saw it as a possible solution to some of the logistics issues he is dealing with. CO-CHAIR KELLY asked Mr. Nelson if he would like to comment on the Quadrennial Defense Review. MR. NELSON said the Quadrennial Defense Review began as a "bottoms up" program several years ago. It has been very successful in getting the services to talk to one another and look at what they are doing objectively so it has become institutionalized and occurs every four years. CO-CHAIR KELLY thanked the group members for their presentation and asked whether they sent letters to the presiding officers and Finance Committee chairs. MR. FUHS said they did today. SENATOR PEARCE asked if there is anything else the committee can do to help forward this proposal, other than consider the capital appropriation request. MR. FUHS said it might be appropriate for the committee to send a letter of support. Senator Stevens' position is that he will do his best to prevent others from blocking military efficiencies from taking place. SENATOR WILKEN asked Mr. Keene what the 3 Double X and 7 Double X generation aircraft mean to Alaska as far as landings and takeoffs 20 years from now. MR. KEENE replied, from a passenger standpoint, those new airplanes will bypass Anchorage. From a cargo standpoint, getting the best utilization of the aircraft will require them to be filled with more cargo and less fuel, and to make a pit stop in Anchorage and perhaps transfer some cargo. If a cargo carrier was to go non-stop from Hong Kong to New York, the plane would have to take about one- third less freight to make up for the weight of the fuel. SENATOR WILKEN asked if the new planes will cause an evolution of the market. MR. KEENE said he believes they will. He noted that prior to joining the AEDC, he spent 37 years in the airline industry. CO-CHAIR KELLY asked committee members if there is any objection to sending a letter to the presiding officers telling them the committee considers this proposal to be a serious effort worth consideration. There was no objection. ADJOURNMENT CO-CHAIR KELLY announced the next meeting will occur on June 5 and adjourned the meeting.