JOINT MEETING SENATE FINANCE COMMITTEE SENATE TRANSPORTATION COMMITTEE Senate Finance Committee Room January 28, 1993 3:30 p.m. TAPES SFC-93, #17, Side 2 (525-end) SFC-93, #19, Side 1 (000-563) CALL TO ORDER Senator Bert Sharp, Chairman, Senate Transportation Committee called the joint meeting of the Senate Finance and Senate Transportation committees to order at approximately 3:20 p.m. PRESENT The following members attended: Senate Finance Senate Transportation Senator Pearce Senator Sharp Senator Frank Senator Kerttula Senator Kelly Senator Kelly Senator Rieger Senator Phillips Senator Sharp Senator Lincoln Senator Kerttula ALSO PRESENT: Senator Little; Frank Turpin, Commissioner, Dept. of Transportation and Public Facilities; Keith Gerken, Deputy Commissioner, Dept. of Transportation and Public Facilities; Ron Lind, Director of Plans, Programs, and Budget, Dept. of Transportation and Public Facilities; Dan Keck, Mayor of Sitka; Jerry Heimbuck, Assistant Division Administrator, Federal Highways, Alaska Division; Jeff Hoover, fiscal analyst, Legislative Finance Division; and aides to committee members and other members of the legislature. SUMMARY INFORMATION An overview of the impact of the federal Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA) was presented by the Commissioner and representatives of the Dept. of Transportation and Public Facilities. Upon convening the meeting, Senator Sharp advised of a listen-only teleconference link to Anchorage and Fairbanks. FRANK TURPIN, Commissioner, Dept. of Transportation and Public Facilities, came before committee. He explained that while the details of the surface transportation act have been difficult to understand, the state fared well in terms of the amount of funding. Alaska is slated to receive $211 million a year. Due to Gramm Rudman and other budget constraints, Congress did not provide full funding for the past year. The state thus received $178 million. The Surface Transportation Act assumes that the interstate highway system is complete. Therefore, activities other than the building of highways were also addressed. The intent is to provide flexibility and allow other modes of transportation (transit) to receive funding. The Act heavily emphasizes local participation. It requires all communities with populations of more than 200,000 to conduct their own planning and distribution of funds. Anchorage has, for some time, had such a planning process. The process has now been expanded to several other cities. The Act also dedicated funds for enhancement of the highway system. In general, this refers to aesthetic improvements such as scenic turnouts, bicycle trails, restoration of historical sites, etc. Alaska will receive approximately $11 million a year for this purpose. The department has received $100 million in requests for the present year. The problem is selecting from among the projects. Highway safety was also emphasized and funded at $11 million annually. The definition here covers "almost everything except rebuilding the road." In some instances, if a history of accidents is evident, funding can be used to straighten a curve, etc. Highway safety moneys provide for delineators, reflectors, and traffic lights. Wise expenditure of $11 million for safety will require much statewide information. Section 118 (F) (copy of sectional text appended to these minutes as Attachment A) of a previous Act, exempts Alaska from restrictions applied to other states. Noted sectional language allows expenditure of federal funds on "any type of road within the state," meaning "any public transportation thoroughfare." To meet local road needs statewide, the department developed the Borough Transportation Plan. The department sought to develop a plan for local participation in how moneys would be spent. That is in keeping with the intent of ISTEA. The department also sought to provide stable funding by providing an annual sum of money to local boroughs. The boroughs could then plan in advance as to how funding would be expended in both current and future years. The Borough Transportation Plan would divide highway funds into two areas: 1. Local road projects planned at the local level. Local planning would be paid for by federal funds. There would be no additional expense to the community. 2. The remainder of the highway system was designated "the core highway system." These are roads that tie local communities together. They are, in effect, Alaska's main highways. The core system also runs through communities. It will continue to be the department's responsibility, and funding therefor will continue to be expended as in the past. All projects (local and core) will be brought together in the DOTPF capital budget submitted to the legislature for approval. Issues that had to be resolved related to how much of the total funding should be spent on local roads and how funding could be fairly distributed among the boroughs. The state commenced meetings with mayors of the four largest boroughs. A subsequent meeting of all mayors led to a recommendation that the department go to the Alaska Municipal League and request appointment of a committee to work with the department to resolve the above-noted issues. A committee was created and numerous meetings with mayors, city councilmen, and members of the legislature ensued. Ground rules were developed calling for 35% of total federal funds to apply to local roads. If full federal funding is provided, 35% would total $85 million a year. Core roads are to be closely defined and uniformly determined in all areas. Discussion subsequently addressed division of funds among the boroughs. The AML committee reviewed population, the number of registered vehicles, miles of road, land area, etc. Combinations were also considered. The committee first developed a base amount of $350.0 for every borough. The remainder of the funding is then to be divided one-half by population and one-half by vehicle registration. In order to provide for unusual projects that would exceed a borough's normal capacity, the committee separated out some funding for contingency. Each borough will then make its own case for the additional funding. Commissioner Turpin directed attention to a tabulated listing of boroughs and funding amounts set forth on the last page of the second handout (Attachment B) and explained that it reflects a division of enhancement moneys among the boroughs. Total funding of $66 million ($59 million in federal funds plus a $7 million state match) was divided per the formula based on one-half population and one-half vehicle registration. Contingency (competitive) funding of $11 million would be used to meet needs greater than borough allocations. Approximately $3 million would be provided for safety- related projects, and $1 million has been designated for bridge repair. The $66 million provided under the formula plus approximately $18 million in contingency moneys total $84 million for division among the boroughs. Individual borough funding ranges from $26 million for the Municipality of Anchorage to $450.0 for the Yakutat Borough. Commissioner Turpin explained that unorganized boroughs would be treated as though incorporated within one borough. The department will conduct planning for these areas with the assistance of the Dept. of Community and Regional Affairs. Approximately $7 million would be spent, annually, in unorganized areas. The Commissioner noted specifically roads to water sources and sewage lagoons. Money could also be used for trails between villages. In response to a question from Senator Kelly regarding highway planning for Anchorage, Commissioner Turpin explained that AMATS would do all the planning. That is a federal requirement for cities with populations over 200,000. Senator Kelly then asked if the legislature would have any flexibility concerning projects put forward by AMATS. Commissioner Turpin acknowledged that AMATS "always anticipates a little legislative discussion." The planning group generally prepares more than it expects to get. That is likely to continue. Senator Lincoln asked if a formula similar to that used for boroughs was applied to unorganized areas. Commissioner Turpin explained that the AML committee recommended that land area and miles not be used. A base number was thus established and the remaining amount divided one-half on population and one-half on registered vehicles. Senator Lincoln next asked if the AML committee contained representatives of unorganized boroughs. Commissioner Turpin answered affirmatively. The Senator noted that many unorganized areas of the state do not have vehicle registration. The Commissioner explained that for that specific reason a minimum number of 500 vehicles was used as the cut off. He added, "We just didn't go below 500 in any borough." That was designed to protect areas where vehicles are not registered. Senator Lincoln asked if the above-noted formulas were merely being proposed or already fixed in place. She further inquired regarding a definition of the core road system. Commissioner Turpin explained that each year the department develops a plan for investment of federal highway funds. The only change brought about by ISTEA is that rather than department development of the entire plan, local communities are being asked to develop a portion--35%. Planning has thus been expanded and more localized. KEITH GERKEN, Deputy Commissioner, Dept. of Transportation and Public Facilities, added that rules established by the AML working group require review of the program and its formulas after one year. Senator Little inquired concerning legislative involvement in the process. Commissioner Turpin said that all expenditures would have to be sanctioned by the legislature. He noted the extensive amount of time required for highway planning and indicated that the role of the legislature is policy setting rather than detailed planning. Senator Little next inquired regarding time lines for implementing the first part of the ISTEA program. Commissioner Turpin answered that there was not sufficient time to incorporate needed planning within the FY 93 budget. FY 94 will be the first year for incorporation of input from local boroughs. Senator Kelly asked if the department had compiled a list of recommended projects for non-local funding. Keith Gerken explained that for communities such an Fairbanks, Anchorage, and Juneau, where planning has been ongoing, the department has a six-year plan. For many other areas that were not eligible under the old federal highway act, the department does not have a backlog of ideas and projects. The communities themselves will have to identify those needs. Speaking to the FY 94 capital budget, Mr. Gerken voiced department intent to amend it within four to six weeks. He noted that some boroughs are at a point where they will soon bring forward a list of projects for FY 94. Senator Kelly asked how projects like the proposed Copper River Road, road to Whittier, and new mainline ferry fit into the funding plan. Commissioner Turpin observed that they are all core projects. A new road within a borough would fall within the borough plan. The Commissioner further explained that approximately 15% of total funds are to be spent on expansion projects. Fifty percent would be spent on existing roads, including existing highways. That was an arbitrary decision. The feeling was that half of the funding should be spent on improving what the state already has. One-third will go to boroughs for local projects, and 15% will be devoted to expansion of the system. The perspective here is statewide, based on the highest priorities. Commissioner Turpin next advised of the impending failure of Tongass Avenue, a core road in Ketchikan. A great deal of funding will be needed for repairs. Based on past proration of funds, it would have taken many years for sufficient moneys to accumulate. Repairs will now be incorporated within the department's six-year plan as part of the core system. Tongass Avenue meets core criteria in that it runs from the center of town to the marine highway terminal and an airport. Criteria for core roads was established by the AML working group for statewide application. Mr. Gerken stressed the need for clear criteria that could be applied everywhere. Some determinations, such as community-to- community connections were natural and easily defined. There was also need to apply the core designation to "principal arterials" connecting a community to its airport, ferry terminal, etc. Alaska has quite a number of "intermodal connectors." Referring to the 15% designated for expansion, Senator Kelly asked if the department would make recommendations for FY 94 expenditures. Commissioner Turpin answered affirmatively. He explained that most of the systems are in "the low expenditure years." He subsequently added that a proposed new ferry would require a substantial amount of the funding. Mr. Gerken advised of intent to obligate ferry moneys over a two-year period. Senator Kelly voiced his understanding the new ferry would "get all of the system expansion program money in the State of Alaska for the next two years." Commissioner Turpin observed that "the big money in expansion is in the year of construction." Funding would enable the department to conduct planning and design work for new expansions at the same time it appropriates money to the ferry. Mr. Gerken added that most expansion projects (the Whittier and Copper River roads were given as examples) are expensive and will likely consume allocations for an entire year or more. He reiterated that the highest priority for funding has been devoted to upkeep of what is already in place. Senator Kelly said that he did not oppose the new ferry, he simply questioned whether it was a high priority for areas other than Southeast. Mr. Gerken explained that it would serve the entire system, including Southwest. It will be the state's second ocean-going vessel. As a replacement vessel, it will replace the MALASPINA. It will also be able to serve the Aleutian Chain and Kodiak and replace the TUSTUMENA when it is out for refurbishing or overhaul. Senator Kelly next asked how the new ferry would benefit areas of the state not served by the marine highway system. Mr. Gerken observed that over 80% of the state's population lives in coastal areas. He further advised that interior areas and communities on the state highway system benefit from ferry traffic. End, SFC-93, #17, Side 2 Begin, SFC-93, #19, Side 1 Senator Pearce referred to the executive capital budget and asked how one would determine which projects were core and which were local. Commissioner Turpin answered that the projects are shown separately. Senator Pearce then asked who would be responsible for maintenance of the core system. The Commissioner advised that ISTEA moneys do not apply to maintenance. The department is not proposing to change maintenance responsibilities in any way. Boroughs are expected to provide maintenance for new roads they build. If a borough improves a road currently maintained by the department, the department would continue to maintain it. Senator Pearce inquired regarding the impact of additional programs dealing with transit, safety, air quality, etc. Commissioner Turpin noted that three areas of the state have reached non-attainment because of air quality problems. One of the problems results from dust contamination in the Mendenhall Valley in Juneau. The EPA is requiring that roads in the area be paved. That would be part of the local program. Mr. Gerken explained that Congress considered automobiles to be a great part of the U.S. air quality problem. It thus made several connections between the Clean Air Act and ISTEA. Sanctions can be applied and highway funding reduced if non-attainment areas do not come up with plans to meet attainment goals. Non-attainment relates to dust and carbon dioxide problems. Fairbanks and Anchorage have non-attainment problems with carbon dioxide while dust is the contaminate in the Mendenhall Valley and Eagle River. Funding totaling $5 million annually has been slated for congestion mitigation and air quality. In response to an additional question from Senator Pearce, Commissioner Turpin voiced his understanding that transit moneys contained within borough allocations are likely to be spent on additional buses in both Fairbanks and Anchorage. Senator Pearce next asked if state legislation was necessary to implement ISTEA. Commissioner Turpin explained that in addition to approval of capital budget items, it would be necessary to pass legislation requiring that helmets be worn by those riding on motorcycles. Failure to effect such a statute will result in Congressional withholding of 5% of the state's funding for the first year and 10% the second year. The department has thus introduced appropriate legislation. Commissioner Turpin advised of his hope there would be no problem with the bill since, at the present time, anyone under 18 years of age must wear a helmet while operating or riding on a motorcycle. Alaska also hopes to receive increased funding resulting from other states that are unsuccessful in passing helmet legislation. ISTEA also entails passage of legislation requiring that anyone convicted of drug use automatically loses his or her driver's license for 90 days. Failure to pass the legislation by April 1 of this year will result in withholding of 3% of the state's ISTEA funding. In response to an additional question from Senator Pearce, Commissioner Turpin acknowledged that needed legislation had not yet been introduced but would soon be forthcoming. Senator Pearce next asked if the federal government concurred in the state's plan and formula allocations. Commissioner Turpin said that the plan received endorsement by federal authorities. The state continues to have responsibilities for monitoring and accountability. Senator Pearce inquired concerning need to ensure accountability at the local level. The Commissioner explained that the department would do most of the accounting except for boroughs that have demonstrated they practice good accounting procedures. Most of the funding will initially be spent as planning money. In response to an additional question from Senator Pearce asking if local communities are prepared to assume planning responsibilities, Commissioner Turpin indicated that he was amazed by the sophistication of boroughs. As an example, he noted two projects planned by the East Aleutians Borough. While $500.0 may not appear to be major funding in terms of the overall budget, it means a great deal to a small village with little or no roads. Mr. Gerken added that none of the boroughs had expressed reservations about ability to manage the planning process. Of greater concern to both the department and borough staff is design work and administration of construction. Those that are capable of that portion of the work may handle it, if the department is certain the borough is able to manage the effort. DOTPF will establish local government assistance within the department. Senator Pearce voiced her understanding that the mayor of the Fairbanks Borough is not pleased with the proposed allocation process. She then asked what was being done to work with dissatisfied local communities. Commissioner Turpin reiterated that extensive participation, discussion, and meeting time was involved in development of the proposed formula. He acknowledged that a community in the Fairbanks area remains dissatisfied. The community feels that distribution on a historical basis would be more fair. That, however, defeats the primary purpose of the program which is to engender more local planning. Mr. Gerken reiterated that not all of the ISTEA funding is distributed per the formula. Part of it is competitive--$11 million a year. A week ago, the AML group reviewed criteria for that allocation. One proposal for the short term is to look at projects that have been included in the department plan for some time. That would favor Fairbanks. This process is not yet finished. Additional meetings have been scheduled to work on detail. Senator Lincoln directed attention to a map designated "Alaska Interim Core Highway System" (copy included within the committee minute book), and voiced surprise regarding the proposed road to McGrath. She then inquired concerning the initiative behind the proposal. Mr. Gerken explained that the department developed a policy plan document over a year ago. Although most of the ISTEA funding will be devoted to preserving the existing system, department discussion also focused upon economic benefits to be derived from expansion of access to other areas of the state. As part of that process, the department proposed seven or eight routes from a series of recommendations relating to resource development and long-range movement of goods. A route to McGrath was determined to have long-term potential. Mr. Gerken acknowledged that it would not be an easy route to construct since it would go near or through the park. The state began a series of discussions with the park service to develop a process for identifying right of way. Study will commence shortly to review advantages and disadvantages and hear from impacted communities and other interests. Senator Lincoln voiced concern that when the department commences to plan it does so from the top down rather than from the community up. She stressed need to begin the effort at the community level. Commissioner Turpin noted a number of requests for a road to McGrath from both residents of the area and the park service. Issues involving the park must first be resolved prior to community hearings. Senator Lincoln noted that the map indicates that routes outlined in green may fit core criteria. She then raised questions regarding that designation. Mr. Gerken directed attention to pages 7 and 8 of an additional handout (Attachment C), containing language identifying core routes. He then noted that the Denali Highway is green because the department believes it to be a core route (a major highway operated by the state) even though it does not fit well within the core definitions. Again referring to the department map, Senator Lincoln inquired concerning criteria used for appropriation of funds for the Dalton Highway. Mr. Gerken explained that criteria used to designate a core route includes connection to a point of major economic activity (resource development or export of goods). Funding expended on core routes would flow from the department's 50%--money for improvement of existing roads. A route in that area that does not fall within the core system would be the responsibility of the unorganized borough. In response to an additional question from Senator Pearce, Mr. Gerken advised that the northern 200 miles of the Dalton Highway are not open to the public. ISTEA funds cannot be utilized for that portion. By definition, however, the Dalton remains a core road and the responsibility of the state. State general funds would have to be used for reconstruction of the northern portion. Chairman Sharp asked if new roads constructed by boroughs would then become the responsibility of the state. Commissioner Turpin answered negatively. Mr. Gerken concurred that boroughs that construct new roads from the 35% funding should be prepared to maintain them. Chairman Sharp next voiced surprise over inclusion of dust problems within EPA clean air concerns and dust control eligibility for congestion mitigation funding. Mr. Gerken concurred in that surprise. The federal legislation initially covered only carbon dioxide non-attainment. Final interpretation determined that air quality dollars can be spent on dust control. He reiterated that dust problems have been noted in both the Mendenhall Valley and Eagle River. Money for paving slated for match by the community and expenditure in 1993 may cure the majority of the problem in the Mendenhall Valley. Chairman Sharp solicited comments and questions from mayors in attendance. DAN KECK, Mayor of Sitka, came before committee. He voiced appreciation to DOTPF for the opportunity to work with the department on ISTEA funding. The mayor then listed the names of those who participated in the process. He acknowledged that there is no way to fund from the largest city to the largest borough and make the process fair and equitable to everyone. Mr. Keck then voiced his belief that all who participated feel that, when viewed from a statewide perspective, the proposed program is good. The Dept. of Community and Regional Affairs has agreed to work with and assist communities not located within boroughs (Petersburg was given as an example). Mr. Keck concluded his comments by advising that while Sitka would prefer more funding, from a statewide perspective, it is satisfied. DON GILMAN, Mayor of the Kenai Borough, next came before committee. He explained that, in the past, category III roads that did not fall within the state or federal system were largely neglected. When improvements were made, DOTPF required that design meet federal highway standards. Communities were thus forced to design secondary roads as though they were major highways. As a result, the roads were substantially over built. The proposed ISTEA program is flexible and will allow for use of funding for design and construction of gravel connective roads where there is no need to build to a higher standard. Flexibility is one of the strong points of the program. The proposal represents a major method of improving the state transportation and road systems. Chairman Sharp concurred that new federal regulations for construction provide the opportunity to "get a lot more miles out of the dollars available." JERRY HEIMBUCK, Assistant Division Administrator, Federal Highways, Alaska Division, next spoke before committee. He concurred in comments by DOTPF and voiced support for the proposed program. Chairman Sharp acknowledged that much field work had been done by the department and local communities. He then voiced his understanding that the amount of funding and formula remain subject to legislative appropriation. Senator Kelly asked when the department would know how many federal dollars will be available. RON LIND, Director of Plans, Programs and Budget, Dept. of Transportation and Public Facilities, came before committee. He explained that the state would know the actual amount when Congress takes action. That amount will not be known while the legislature is in session. Commissioner Turpin advised that the department knows approximately what the amount will be. To protect against that, the department brings in alternate projects for legislative approval in the event that funding is greater than anticipated. In his concluding remarks, Commissioner Turpin said that the department views ISTEA provisions as another method of planning a portion of the annual budget. Senator Lincoln spoke to concern raised by broad, sweeping regulations at either the state or federal level. She then asked why the federal government was mandating that states pass legislation requiring that the driver's license of an individual convicted of drug use be revoked for 90 days or risk loss of 3% of ISTEA funding. Mr. Heimbuck said that he could not respond, advising that the requirement reflects "something that Congress put together." The main purpose appears to be to discourage the use of drugs in the United States and, in particular, drug use while driving. Senator Lincoln suggested that if the 60 members of the Alaska Legislature felt that the requirement would be a deterrent, they would pass legislation without influence from Washington, D.C. Senator Kelly voiced his understanding that all local projects planned by boroughs as well as state projects planned by the Dept. of Transportation and Public Facilities would have to be appropriated from ISTEA funds by the legislature through the budget process. Commissioner Turpin concurred. He further advised that approval would be on a project-by-project basis rather than in lump sum payments to boroughs. Senator Rieger noted a past feeling of constraint regarding AMATS recommendations for the Anchorage area and inquired regarding flexibility for the legislature under ISTEA. Commissioner Turpin said that there is no flexibility for a city over 200,000. Such cities must plan all federal expenditures within the community regardless of whether expenditures are for core or local roads. The department does not anticipate problems since it has always worked closely with AMATS. ADJOURNMENT The meeting was adjourned at approximately 5:00 p.m.