SENATE TRANSPORTATION February 20, 1996 1:39 p.m. MEMBERS PRESENT Senator Steve Rieger, Chairman Senator Robin Taylor, Vice Chair Senator Lyda Green Senator Al Adams Senator Georgianna Lincoln MEMBERS ABSENT All members present. COMMITTEE CALENDAR Overview of the Three Year Statewide Transportation Improvement Program (STIP) WITNESS REGISTER Joseph Perkins, Commissioner Department of Transportation & Public Facilities 3132 Channel Drive Juneau, Alaska 99801-7898 POSITION STATEMENT: Discussed the STIP. John Horn, P.E. Regional Director Department of Transportation & Public Facilities PO Box 196900 Anchorage, Alaska 99519-6900 POSITION STATEMENT: Discussed the STIP. ACTION NARRATIVE TAPE 96-2, SIDE A Overview of the Three Year Statewide Transportation Improvement Program (STIP)  CHAIRMAN RIEGER called the Senate Transportation meeting to order at 1:39 p.m. and invited Commissioner Perkins to the table. Number 014 JOSEPH PERKINS, Commissioner of the Department of Transportation & Public Facilities, informed the committee that the department had completed all its work with regard to the release of the STIP except for the final review. The Statewide Transportation Improvement Program document should be out the beginning of next week. The department has released two draft documents, of which the committee has the second document entitled Transportation, Needs & Priorities. Both of these documents have received extensive comment; reviewing all those comments in order to sort out the projects for scheduling has taken much time. Mr. Perkins stated that Governor Knowles announced his Transportation Initiative in June; Governor Knowles' Initiative is based on a $220 million federal program. That program can be broken down as follows: $120 million for the National Highway System (NHS), $80 million for the Community & Regional Transportation System and new roads, and $15-20 million for Trails & Recreational Access to Alaska for Alaska (TRACK) projects. He explained that the TRACK projects are enhancement projects required by the federal government. This program was sent out to all the communities who were asked to submit or resubmit their projects which lead to the development of a grading system for Community & Regional projects and TRACK projects. A separate grading system for rural areas was also established. Mr. Perkins clarified that the regional boards met to grade the projects submitted by the communities, then a board convened in Juneau in order to review and score each project. That process resulted in the Transportation Needs & Priorities booklet before the committee. Number 097 Mr. Perkins emphasized that the NHS is extremely critical for Alaska. Last year, Congress passed the NHS bill which recognized that the era of interstate transportation has come to an end. Congress specified the NHS by roads, 159,000 miles of road in the U.S. is included in this system. Alaska has approximately 2,100 road miles and 1,900 marine miles of ferry connections designated in the NHS. Mr. Perkins informed the committee that the Dalton Highway was not initially included in the system, but has since been added to the legislation. Since that time, the legislation has requested nominations for intermodal connections. The department submitted three more portions of state highways under the intermodal connections request; they too have been added to the NHS. The portion of road in Juneau between the old ferry dock and the rock dump is one of the intermodal connections submitted. Mr. Perkins interjected that being listed on the NHS allows those roads or portions of roads to be eligible for NHS funds. He further specified that this was added because of the intermodal connection with a barge and fuel company. Another intermodal connection was added in Nenana in order to extend to the barge facility. The largest intermodal connection is the Whittier Road and tunnel. Mr. Perkins believed that Congress would eventually provide federal aid for the NHS, therefore the more miles Alaska has on the system the better. Number 164 Mr. Perkins posed the question: how far behind is Alaska in constructing portions of the NHS in order to function at a minimum standard? A September assessment of the booklet resulted in a shortfall of $1.2 billion; this estimate has been refined to approximately $1.7 billion for over 14 years at $120 million per year in order to redo only the NHS portions in Alaska. The department is currently in the midst of scheduling the $120 million per year for the next three years in the STIP. Mr. Perkins pointed out that the STIP has taken time because of the care necessary when allocating $720 million. Mr. Perkins mentioned that the report coming out early next week will specify the projects with the highest priority for the next three years. This report will be available for public review. Mr. Perkins noted that the projects will be programmed according to the perceived need and assigned grade of that particular project. The department has made the following assumptions: that Alaska will continue to receive $120 million per year in federal funds with $25 million in state matching funds, and the establishment of a new "ISTEA" program. Currently, the "ISTEA" program allocates more money to Alaska than 22 other states. Mr. Perkins informed the committee of a GAO study which indicated that Alaska should receive about $90 million per year; there is a lot at stake. The reauthorization of the new federal highway program will be one of the biggest priorities for Mr. Perkins and the governor. Number 242 Mr. Perkins specified the following negative aspects that Alaska has with regards to the NHS. (1) Alaska is one of the few states that does not have a state funded highway program. Alaska's program is completely based on federal funds. (2) Alaska has the lowest gas tax in the U.S. (3) Alaska ranks second in the nation for the amount of money received back in comparison to the amount of money Alaska puts into the program. New York ranks first in this category. Mr. Perkins said that he would provide committee members with information regarding state rankings according to how much the state puts into the program. Mr. Perkins stated that Alaska is approximately 15 years behind the lower 48, which has completed its road net. Alaska needs funding to complete its road net at the minimal standard level, not funding to maintain interstates and replace bridges (the two major problems in the lower 48). Mr. Perkins believed that the program identifies Alaska's problems as well as the magnitude of those problems. The $120 million for the NHS illustrates to Congress that Alaska places importance on its basic road system. Alaska must demonstrate that projects are being constructed based on need; otherwise Alaska will face difficulties with reauthorization. Number 276 Mr. Perkins expressed concern with the total highway budget. He explained that the amount of money spent from the highway trust fund has been caught up in deficit reduction; the money in the highway trust fund is counted as an asset towards deficit reduction. Mr. Perkins said that there is a tendency to allow the highway trust fund to accrue in order to count against other expenses. Just that happened this past year. Projections indicate that the highway trust fund will lose at least $1 billion in total allocations; last year's allocations totalled about $20 million. Furthermore, the Congressional budget reduction plan includes a net reduction of approximately 10-15 percent in the amount of available trust fund money. The Presidential plan includes a reduction of 7- 9 percent for the funding available for transportation. Therefore, Mr. Perkins concluded that Alaska is attempting to obtain a piece of a smaller pie. Under the seven year budget plan, the total available money will be reduced. Mr. Perkins did not believe that Alaska would continue to maintain the funding it has in the past; there will be a reduction. Number 300 CHAIRMAN RIEGER asked Mr. Perkins to clarify the numbers in the federal deficit reduction plan. JOSEPH PERKINS explained that a net reduction of $1 billion would occur next year. Over the seven year period, the Congressional plan reduces transportation spending appropriations by approximately 15 percent. The Presidential proposal includes a reduction of 7-9 percent. In response to Senator Lincoln, Mr. Perkins stated that the current transportation spending appropriations are $20 billion. Next year the $20 billion would shrink to about $19 billion and in the following years it would shrink to about $15 billion. CHAIRMAN RIEGER ascertained that the next year would have a five percent reduction equaling $19 billion. SENATOR TAYLOR asked Mr. Perkins if he was familiar with a study done within the department by Roger Allington regarding the marine highway system. How does this prioritization in scoring reflect the outcome of that study? JOSEPH PERKINS believed that Mr. Allington's study was a draft study which was not used in the development of the priorities in the booklet. Mr. Perkins informed the committee that the department intends to perform and implement a Southeast Alaska study. Currently, Southeast is working under a 1986 transportation plan; Southeast should have two fast ferries running between Juneau and Skagway. SENATOR TAYLOR pointed out that the study would not be completed until 1998 which means that two more funding cycles would have passed. Senator Taylor emphasized that all the options Mr. Allington's study reviewed resulted in the ferry system being in gridlock by the turn of the century or shortly thereafter. One hundred cars would be left at port per sailing. This is only four years away. Senator Taylor stated that he could find three or four studies within the department which reached the same conclusion as Mr. Allington's study. Senator Taylor expressed frustration with the trend of tying up more ferries longer and increasing the costs of utilizing the ferry while most of the road projects are upgrades or replacement of already existing roads. He pointed out that $182 million is going to the Glenn Highway; how many bridges are necessary for those commuting to Anchorage? What will be done to interconnect Southeast Alaska? With regards to high speed ferries, no one in the marine highway business is adopting high speed ferries. Number 364 JOSEPH PERKINS clarified that the funding for the Glenn Highway is going to upgrade the portion of the road between Palmer and Gunsight Mountain which was constructed in the late 1940s and 1950s. This portion of the Glenn Highway has 15, 20, and 30 mile per hour curves. Regarding Senator Taylor's comments about the department's studies, there is not a study indicating what and where funding should be placed. The department has many pieces which have never been consolidated into a document that would specify the appropriation of money. He indicated that following any of the existing pieces would not be going in the correct direction. Mr. Perkins agreed with Senator Taylor's opinion of fast ferries. The current plan calls for fast ferries, but that portion of the plan was not implemented. He reiterated that Southeast Alaska needs a transportation plan. Southeast Alaska has had the same transportation system for the last 20 years, only now the system does not work as well. Alaska needs to be looking 20 years in the future. Mr. Perkins mentioned that a cost estimate had been done for transportation from Sitka to Warm Springs as an alternative. The cost estimate was $40 to $200 million which is too expensive. The ferry situation in Sitka will be resolved because the cost estimate for the construction of the road is too expensive for that option to be weighed. Furthermore, every study has been performed by either the marine highway system or the Southeast Region of the department. Mr. Perkins emphasized that the study he proposes would be performed at headquarters and he would supervise it personally. He hoped that the study could be completed before the next legislative session. Mr. Perkins said that there is no document that provides a step-by-step method for transportation. Number 406 SENATOR TAYLOR stated that Mr. Allington's study was a step-by-step study which was drafted and performed at headquarters. Mr. Alington's study has been buried for the last two and a half years; now the department wants to perform the same study. Senator Taylor insisted that this was unacceptable. He asked how many studies were done in the department before deciding to spend money on the Glenn Highway; he did not know of any such study. Senator Taylor expressed the need to rethink this process. Why was the Halibut Point road constructed halfway and due for completion this summer, but pushed back two years? JOSEPH PERKINS said that he could not address that specific road. He explained that the department attempts to base transportation construction on need. Alaska has state highways that cannot be travelled in the Spring, those roads should be dealt with first. Number 437 SENATOR ADAMS asked if all or part of the projects scheduled for 1996 would be included in the three year STIP. JOSEPH PERKINS replied yes. The majority of the 1996 projects scheduled for construction were continued because they were too far along in the process. CHAIRMAN RIEGER asked if the projects that the six year book discussed as slated for construction in 1996 were approved in a legislative appropriations bill. JOSEPH PERKINS assumed that those projects had already received legislative authorization. Only those projects needing to be authorized would be brought forth. If there are problems with those projects on the list, the department would like to know of them. SENATOR LINCOLN was unhappy with the six year plan. She expressed concern with the priorities laid out by the plan. This document is difficult to interpret; it is not user friendly. Senator Lincoln was concerned that the public process was not present in the development of this plan. Commenting on a document that is not user friendly is difficult. She said that her district had approximately 51 percent of the highways in Alaska. Senator Lincoln did not see a transportation plan for the State of Alaska. A transportation plan for rural and bush Alaska is needed. What parallel projects could be impacted by these roads? For example, economic development would be effected by the transportation in that area as well as education, and infrastructure. Senator Lincoln could not grasp all this with the document before her. She suggested developing a 50 year transportation plan. Transportation is the key to any development in Alaska. She further pointed out health issues regarding the dust problems associated with transportation. In conclusion, Senator Lincoln requested a short and long term plan that receives legislative and public review before becoming final. Number 524 JOSEPH PERKINS informed the committee that John Horn, the Regional Director of Central Regions, was present. Mr. Horn participated in the public participation of the plan and could discuss the process that took place at the regional level. SENATOR GREEN interjected that her district had input during this planning process. SENATOR LINCOLN said that perhaps that was because Senator Green's district was a city. SENATOR GREEN thought that on the whole a good job was done with the public process. JOHN HORN, Regional Director of the Department of Transportation & Public Facilities, specified that he would concentrate his comments on the ranking criteria and public process in the Central Region. The department has moved from a regional allocation to determining the statewide needs of Alaska. The process began with the Governor's Transportation Initiative in June 1995. After that, community input was solicited. Communities were informed of the plan and the department worked with local governments, state and federal agencies, interest groups, and solicited participation from citizens. The department then developed ranking criteria; that criteria was not oriented to any particular area in Alaska. Therefore, a separate criteria was established for remote roads and trails not on the contiguous highway system, the marine highway, TRACK, and rural and urban roads on the contiguous highway system. Mr. Horn said that the following areas were reviewed: * possible economic benefits, * health and quality of life with regards to air and water quality as well as dust concerns and access to basic sanitation, * safety * intermodal connectivity (if the placement of a road could eliminate the need for an airport), * local government contributions (whether that be a right of way or materials), * the maintenance priority, * public support (a project did not receive as much weight if the public support was weak), * environmental considerations because most projects require an environmental impact statement or analysis, TAPE 96-2, SIDE B * new access to water sources, landfills, sewage lagoons, honeybucket sites, health care, airports, * system preservation such as projects that other groups were doing which could be correlated with the department's project, * other unique factors. Number 571 Mr. Perkins informed the committee that the Central Region received about 1,100 different projects which were scored. Those receiving high enough scores were then sent to the Project Evaluation Board. He noted that he was a member of the Project Evaluation Board which enabled him to score other regions. The board then averaged the scores they had assigned the projects, the final score, and the booklet was produced. The booklet was sent out to anyone interested and any comment was welcomed. The process began again and finally, a booklet was produced in December requesting that comments be sent by January 8th. This process will be completed early next week and the final document finished. JOSEPH PERKINS interjected that the final document also would receive public comment. SENATOR LINCOLN pointed out that cities and boroughs have planning people who are full-time and paid to review such documents as this. Smaller rural and bush communities do not have the city and borough councils to review this document. She reiterated that this document is not user friendly. She asked if these communities had to request or inform the department of interest in order to review the document. JOHN HORN clarified that every community received the document. Through the process, the mailing list increased. In the central region alone, 500 or 600 booklets were mailed. Mr. Horn said that they solicited people to participate in the process. Number 525 SENATOR GREEN asked if a community that maintains its roads and does not have anything to trade for work on its roads would be penalized. JOHN HORN was not sure that such a community would necessarily be penalized. In working with the criteria, some things have been identified as needing to be changed. For example, the maintenance which the local government in the Mat-Su took over was one item number; those need to be two separate items. Mr. Horn mentioned that a local government could also take over the maintenance of some like facility in order to reduce the department's maintenance load. SENATOR GREEN asked if that meant the local government could go outside of its city limits. JOHN HORN did not think that the local charter would allow going outside of the city limits. The dilemma is that there is no doubling of points; a high maintenance priority is given points and the local government who wanted to assume the maintenance received the same points. CHAIRMAN RIEGER asked if the actual 1996 construction program could be provided to the committee. According to prior comments, Chairman Rieger assumed that most of the 1996 projects were authorized from prior legislative appropriations. Mr. Perkins and Mr. Horn said that information would be provided. Chairman Rieger inquired as to what is happening now that the projects have been prioritized. Number 485 JOHN PERKINS explained that the department is trying to determine that the money is going to the correct years. A normal project development in an urban area would have preliminary engineering one year, in some cases, two years. Then a design followed by right of way activity and construction would occur. This entire process could stretch over six or seven years for a major project. Mr. Perkins said that the department is trying to free up as much money as possible for each year. For example, a priority one project without a design would not be funded for construction in 1996. Such a project would be funded for design and the construction dollars would be for 1997. He reiterated that the department is attempting to balance over $700 million. Mr. Perkins mentioned the AMATS situation in which the department gives AMATS an amount that it must utilize in the development of its projects. The AMATS area develops the projects, the state does not. Mr. Perkins informed the committee that the department received hundreds of letters, in fact the board had to convene for an extra session in order to review the comments. He was pleased with what the communities have offered; this will create great savings. For example, communities donating right of way and gravel where previously the department had to purchase those. Such communities were ranked higher because of those donations. The ownership of several highways is being relinquished which decreases the department's maintenance costs. The project supports communities who help themselves. Number 445 CHAIRMAN RIEGER asked if the NHS is controlled by AMATS within Anchorage or only the community. JOSEPH PERKINS explained that the NHS must be included in AMATS program; however, it is controlled by the department. CHAIRMAN RIEGER inquired as to the level of cooperation or interaction between the department and people proposing the Prince of Wales Island and Haines ferries. JOSEPH PERKINS said that the department funded the second study of this issue. The feasibility boat study has been completed. Mr. Perkins felt that the department's relationship and involvement had been good. The Prince of Wales route is not part of the NHS which would place it under Community & Regional Program funding. SENATOR LINCOLN requested a copy of the GAO study. She also asked if transportation would be considered at the federal level for block grants to the states for highway money. Number 415 JOSEPH PERKINS did not believe that block grants for transportation would be considered. The problem lies in the amount of the funds per state, not in the fund's delivery. Alaska has flexibility, similar to that of a block grant, under the "ISTEA" program. Mr. Perkins expressed concern with the notion that the NHS should only be funded at a federal level; then the national gas tax is lowered in the amount of the other programs. If the states then want the other programs, they would be required to raise their gas or other tax in order to pay for the programs. Mr. Perkins believed that this line of thinking is becoming more popular. That scenario would hurt Alaska badly; Alaska cannot raise the necessary money for those other projects through a tax increase. Therefore, it is imperative for Alaska to have as many miles on the NHS as possible. The NHS is tied into the defense of the U.S. and the commerce of Alaska. Mr. Perkins pointed out that the plan for the Central and Northern Regions is to upgrade the NHS. SENATOR LINCOLN expressed concern with the Northern Region's reported allegations. How far along is the investigation of those allegations? JOSEPH PERKINS said that he was watching this. There are sexual discrimination type allegations. Outside counsel is performing the investigation. Mr. Perkins indicated that the investigation would be completed in the next few days. A deputy has been assigned to the case. Mr. Perkins informed the committee that he would review the final recommendations from the investigators. Mr. Perkins emphasized that he would take the necessary action. JOSEPH PERKINS agreed to make copies of the GAO report for all the committee members. CHAIRMAN RIEGER requested a copy of the 1996 construction program. JOSEPH PERKINS said that he would also be providing information regarding transportation and its funding at the federal level. SENATOR LINCOLN assumed that when the three year plan is out, the committee would receive copies. JOSEPH PERKINS replied yes. There being no further business before the committee, the meeting was adjourned at 2:50 p.m.