JOINT MEETING HOUSE TRANSPORTATION STANDING COMMITTEE SENATE TRANSPORTATION STANDING COMMITTEE March 16, 1999 1:35 p.m. MEMBERS PRESENT Senator Jerry Ward, Chairman Senator Drue Pearce Representative Beverly Masek, Co-Chair Representative Andrew Halcro Representative John Cowdery Representative Jerry Sanders MEMBERS ABSENT Senator Rick Halford Senator Mike Miller Senator Georgiana Lincoln Representative Bill Hudson Representative Allen Kemplen Representative Albert Kookesh COMMITTEE CALENDAR Oversight Hearing: Anchorage International Airport Expansion Project TAPE 99-11, SIDE(S) A & B CALL TO ORDER CHAIRMAN WARD called the House Transportation Standing Committee meeting to order at 1:35 p.m. Members present at the call to order were Senator Ward, and Representatives Masek, Halcro, Cowdery and Sanders. Senator Pearce arrived at 1:40 p.m. SUMMARY OF INFORMATION Number 041 KURT PARKAN, Deputy Commissioner, Department of Transportation & Public Facilities (DOT/PF), provided the introduction to the presentation on the Anchorage International Airport Expansion Project. He noted that this is the biggest project DOT/PF has ever undertaken. Many different individuals are involved in the ongoing review of this project, he explained, including the airlines' technical committee, the airport staff, and staff from the legislature assigned to follow-up on the project. He introduced David Eberle to start the presentation. Number 080 DAVID R. EBERLE, Program Director for Gateway Alaska, and Director of Construction and Operations, Central Region, Department of Transportation and Public Facilities (DOT/PF), came forward to give the presentation. He distributed a handout entitled Anchorage International Airport Terminal Redevelopment Project, Project Update, March 1999. He reported that the project is about three to four percent complete, and they are just getting geared up for the upcoming major contracts. Their effort to date, he explained, has been focused on completing the schematic design, which was completed in January. Since that time, however, the team has been going through detailed value engineering and cost reduction exercises to bring the project back within the confines of the budget. He gave the example of building a house, and advised that the airport users and tenants have all asked for additional things that may or may not be accommodated according to the budget. Number 126 SENATOR PEARCE asked what had changed in one year that required altering the budget. MR. EBERLE indicated that the requested floor space has increased, and the airlines have requested additional ticket lobby area and gate area. He answered Senator Pearce's question as to why they were requesting more space now by stating the original concept design was based on the best available information at that time, and he explained that the detailed schematic design laid out floor space needs for each individual airline and tenant. He indicated that this represents an approximate increase of 68,000 square feet over the baseline in the concept design. SENATOR PEARCE asked, "So does that mean that these experts you had, which you paid a lot of money to, to come up with the concept, didn't know what they what talking about?" MR. EBERLE stated that he would view it as just the opposite. He said, "The initial guess is just that. We are trying to best guess what all the tenants are going to want. ... We are not in a detailed design phase at that point. We had to start somewhere. We have now advanced by having one-on-one meetings with the airlines and all of the tenants. Through that process is where we detail exactly what each tenant wishes in the way of space. In addition to that, about a third of the additional ... area is attributed to a basement level access, which is non-public circulation, but will preclude future problems on the airside operation. Basically, that basement level is a corridor as a service entrance to allow all the incoming material, supplies, the food service, the retail vendors. All that stuff is brought in through the corridor at the basement level rather than having to access on the airside, which interrupts airline operations, or access in on the public entrance side, which interrupts the passengers." Number 166 SENATOR PEARCE observed that she was told all of the users and operators were part of the original discussions with the designer on an ongoing basis. MR. EBERLE acknowledged that they had been; however, the detailed level of discussions had not taken place yet. SENATOR PEARCE noted that discussing corridors underneath to get supplies in and out seemed pretty basic. MR. EBERLE explained that the original concept was for airside entrance; however, after it was looked at in detail, and long-term goals were discussed, it was agreed the basement corridor access was a better idea. Number 181 MR. EBERLE advised that they are currently in the process of launching the detailed design, turning it into a contract package, and having it "bid out in a hard money contract." In addition, Concourse "C" is in the process of being vacated, with the remaining tenants to be relocated by May, and the bulk of the construction to date has involved the relocation of those tenants to the North Terminal. The contract for demolition of Concourse "C" will be advertised this month, and the first part of that process will be asbestos abatement in the months of May and June. The actual demolition of the building will begin in July. MR. EBERLE reported that the overall design is about 40 percent complete on the land side, and it will be constructed in two phases. The first phase is incoming access and the extension of curbside ramps, and that construction start is scheduled for July. He told the committee the new access road will be opened in May of 2000; after that, the second phase will begin. Number 208 MR. EBERLE explained that the airside work is only about 10 percent done on the design side, and it has been pushed off until the year 2000, awaiting the additional $25 million in bonding. He reported that the only work done on the airside so far was apron repaving done last fall to support the relocation of ERA/PenAir. He referred the committee to the first page in the "Budget" section of the handout. Last year, the budget was set for $230 million, which is broken down as follows: $178.7 million in airport revenue, $26.3 million in federal highway funds, and $25 million in FAA [Federal Aviation Administration] funding. The FAA funding has been secured in a Letter of Intent (LOI), which, he explained, is a discretionary grant from received over a 10-year period. The LOI is actually for the amount of $48 million, and it includes some additional projects beyond those related to the original project, specifically: Runway 6L/24R Reconstruction and Apron Reconstruction (Asphalt). In addition to that, Mr. Eberle pointed out that the actual portion of the LOI available for the Terminal Redevelopment Airside Projects exceeds the original $25 million requested; however, the problem is that the cash flow is received over 10 years, and the work is scheduled over four years. In order to accomplish this construction, DOT/PF is requesting an additional $25 million in bonding authority. Number 239 CHAIRMAN WARD inquired if DOT/PF has submitted a request to the congressional delegation asking for the time frame to be changed from 10 years to one year. MR. EBERLE said no. Number 244 REPRESENTATIVE COWDERY asked if the bonds were going to be sold according to the interest rate. MR. EBERLE indicated that the plan is to sell the bonds in August of 1999. He went on to explain to Representative Cowdery how the LOI funds were distributed, according to the second page of the "Budget" section of the handout. REPRESENTATIVE COWDERY wondered how the bond costs were going to be paid from August until the initial LIO money arrives. MR. EBERLE responded, "The initial debt service on the bonds is all being capitalized as part of the overall finance plan. The actual debt service on the bonds ... isn't due to start repaying until the year 2002. So, the first several years of the bond interest is being capitalized, and that is at the request of the airlines. So the payment actually is going to start taking place at the point where you start getting revenue generated from the new terminal project; in other words, the additional space is starting to become available." REPRESENTATIVE COWDERY asked what the approximate interest costs would be from the time the bonds are sold in August until the time the funds are received. MR. EBERLE explained that if there was two years of capitalized interest at roughly five percent, the figure would be approximately $2.5 million. He pointed out that the airlines approved this project on the basis that a full $204 million would be bonded, and there was no plan for LOI of FAA money to be added to the project. He added, "The benefit here is that now we have LOI monies to pay back part of that $204 million." REPRESENTATIVE COWDERY noted that there may be PFC [Passenger Facility Charge] money as well. Number 299 MR. EBERLE next referred the committee to the third page of the "Budget" section of the handout. He stated that the balance of the project is the same, including the overall budget; however, "Phase II bonds" are being requested in the amount of $25 million. He called attention to the "Summary Project Schedule" in the handout, and noted that the goal is to have the Terminal "C" replacement open to the public in the spring of 2002. After that terminal is opened, in the off-season, the existing ticket lobby area and Concourse "B" will be remodeled. He mentioned that the roads will be built in two phases. Number 327 MR. EBERLE clarified that parallel to, but not part of, this project is the Alaska Railroad Corporation's plan for a rail station at the terminal. This is currently at the design phase, and the earliest any construction would actually begin is the end of 1999. He explained that the railroad's goal is to come on line about the same time Concourse "C" opens. He next addressed road construction, explaining that construction of the new incoming lane will be constructed in the summer of 1999, and that it can be constructed without interrupting the existing traffic, other than at the cross points. The main circulation loop into the airport will stay the same, he noted, for the bulk of this summer; however, late in the season, after the "summer rush," the upper ramp will have to be shut off for approximately four to five months to allow for extension of a 600-foot bridge. The goal is to have this phase opened to the public by May of 2000. Once that is in place, he added, the exit loop will be started, and this is a new configuration that will not disrupt traffic much until it is ready to be switched over. Finally, the parking lots will be reconfigurated after traffic is under new alignment. Number 345 CHAIRMAN WARD asked Mr. Eberle to point out the location of the railroad route and depot on the chart, and if the railroad had acquisition costs in that plan. MR. EBERLE confirmed that the railroad has $28 million to design and build the facility, and they are currently engaged in an ongoing discussion with the airport regarding putting together a lease option. Number 359 REPRESENTATIVE HALCRO indicated that the railroad was conducting a feasibility study with regards to this project, and that they had committed to at least doing a tunnel that would be ready when the project became economically viable. He wondered if there was any update on when the feasibility study would be completed. MR. EBERLE believed the feasibility study would be completed by the end of March or early April. REPRESENTATIVE HALCRO sought clarification as to whether it be determined at that point to build a rail station or if they have already committed to do so. MR. EBERLE stipulated that they have only committed to the tunnel portion and design of a rail station. He believed that discussion was going to occur at the April 8, 1999, board meeting of the railroad. Number 373 REPRESENTATIVE HALCRO asked, "Will you take into consideration the feasibility study that comes back or, if they just come to you and say, 'We want to build it; we have the $28 million and we're going to do it, regardless of the feasibility,' is that something the airport is just going to accept?" MR. EBERLE reiterated that Alaska Railroad Corporation is currently engaged in lease negotiations; however, part of the price of that lease option is their commitment to building a tunnel, which they have done because it works directly with the first phase of construction. The time to build a tunnel, he explained, is the beginning of fall 1999 as road construction begins; that way, traffic will not be disrupted more than once. CHAIRMAN WARD inquired as to the cost of the tunnel. MR. EBERLE indicated that the railroad has committed to approximately $1.5 million, and that another $1 to 1.5 million will be needed to finish the tunnel and make it usable to passengers. CHAIRMAN WARD wondered if the railroad is planning to borrow the needed $28 million or already has it in possession. If they already have it, he questioned how they were able to obtain this amount of public funds. MR. EBERLE understood it to be a direct federal appropriation to the railroad. Number 392 REPRESENTATIVE COWDERY inquired if the railroad would pay the same rental rates as the airlines and other vendors at the airport. MR. EBERLE reported that was currently under discussion. He continued his presentation by next referring to the page in the handout entitled "Contracts Awarded," and pointed out that approximately $5 million in contracts have been awarded to date. Number 408 REPRESENTATIVE COWDERY returned to discussion of the railroad. He noted that there has been some concern that the walkway from the rail station to the airport terminal would be too long, and he wondered approximately how long it would be, and if it would have a moving sidewalk. MR. EBERLE confirmed that the railroad has requested the walkway be designed to allow for a moving sidewalk. REPRESENTATIVE COWDERY asked if the railroad would then own that moving sidewalk or if it would be part of the airport. MR. EBERLE said, "It's a detail to be worked out in the lease agreement. ...The tunnel itself would become the property of the Anchorage International Airport, and then they would operate and maintain the tunnel with the rest of the facility. The balance of the rail station would be the responsibility of the railroad." He then referred the committee to the page in the handout entitled "Contracts Scheduled for Bid," and he pointed out that there will be over 30 contracts used for this project. Number 424 SENATOR PEARCE had a series of questions. She noted that the project cost in 1997 dollars was $190.8 million, not counting the interest and insurance costs for the bonds, and that the escalator was placed at $14.5 million, which is more than 7.5 percent, to reach the total capital request of $230 million. She pointed out that it has now been decided to add over 60,000 square feet. She referred to the baggage conveyer equipment cost estimation of $13 million, and that the notation stated it would have separate funding. She asked, "What is the funding source for that?" MR. EBERLE explained that the airlines have approved pulling that out as a separate project, and that they are proposing to do that as a separate CIP [Capital Improvement Project] or a possible candidate project for PFCs [Passenger Facility Charge]. SENATOR PEARCE wondered how the airlines were able to delegate state funding. MR. EBERLE said that the baggage system that was originally envisioned in the Terminal Redevelopment Project was very limited in nature and was less than $2 million in the original project budget. Having done an in-depth study of the baggage system, and considering the age of that system, and the additional features that could be more convenient for travelers, such as curbside baggage check-in systems, interline belts, and new bag claim systems, it was agreed by the airlines and airport that a complete replacement of the baggage system is in order. He added, "It's either now or later. Now would be the time to do it as part of the new project; however, we don't have that in our budget. We've identified that as, if a new baggage system is desired, then something else has to give." Number 449 SENATOR PEARCE noted that she fought to get this project approved last year, and it was presented as a $230 million project at that time. She wondered how a project of such scope could be planned with only $2 million allotted for baggage facilities. MR. EBERLE explained that the scope of the original concept did not include total replacement of the baggage system. SENATOR PEARCE referred the committee to the page in the handout entitled "Contracts Scheduled for Bid," and she observed that $13 million for airport baggage handling systems was scheduled to be advertised for bid on March 03, 1999. She asked if that was funded. MR. EBERLE said no, and said, "That was the original concept. We are paring that back to the $2 million that is, roughly, needed to do the ERA/PenAir bag relocation, and, also, that won't be advertised until the end of the year or early next year." SENATOR PEARCE clarified that the chart was incorrect. MR. EBERLE said yes. SENATOR PEARCE inquired as to the other portions of the $20 million, not in the original budget, that is suddenly on the "wish list." She wondered if the airlines were going to provide their own flight information displays. MR. EBERLE indicated that was correct. SENATOR PEARCE pointed out that interior construction for third floor was being deferred. She said she assumed that future use of any space on the third floor would be an additional cost to the state. MR. EBERLE said, "That could be a tenant cost, depending upon who utilizes the space." SENATOR PEARCE asked why the tour baggage check-in roof was being lowered. MR. EBERLE indicated that the original concept for the tour baggage check-in area was for a very high roof of the same level as the rest of the terminal. By lowering that and building a floor between the check-in counters and the baggage claim, he explained, it would allow for future expansion. Number 470 CHAIRMAN WARD asked how it was decided to make this change. DON KETNER, Project Manager, Anchorage International Airport Terminal Redevelopment Project, explained that the change came about after a value engineering exercise as one of the ways to reduce the cost estimate for the overall project. CHAIRMAN WARD wondered if reduction in efficiency was weighed against the cost reduction. MR. KETNER said, "The value engineering exercise occurred in two directions. First, we had our design team go through the project and look at various components of the project and evaluate them in terms of functional value cost and various other factors, and come up with recommendations to look at. We had various workshop meetings with the airlines to make decisions on where we would best ... I guess what it came down to was, at the end of schematic design or toward the end of schematic design, we recognized that ... we had a scope that, more than likely, required a budget that exceeded what we had in hand." CHAIRMAN WARD asked why that was. MR. KETNER said, "Because of the schematic design process. When you move from a concept into a more detailed design, just like you do with a house, what winds up happening is...." Number 485 SENATOR PEARCE declared that she had personal experience building a house, and, upon finding out that the scheme is bigger than the budget, she cut back to fit her budget. She emphasized that if the state cannot afford this project at $230 million, she did not think they should be going forward. She pointed out that she sat through many meetings last year and heard testimony from the airlines that baggage handling equipment was very much needed, and she did not know how the Terminal Redevelopment Project put together an entire scheme for a new airport terminal without that equipment properly budgeted. She observed that the project is already $34.5 million over budget, and they are only three percent into the project. She summarized by saying, "I don't support it anymore." Number 501 REPRESENTATIVE COWDERY referred back to the change in the roof design of the tour baggage area. He asked if the amount of floor space was still the same as originally designed, and if it still handled the same amount of tour buses. MR. KETNER said yes. REPRESENTATIVE COWDERY observed that construction costs have been cut back because of a less valuable roof structure, but sought assurance that, conceptionally, the area is still the same size. MR. KETNER referred the committee to a draft explaining the new roof for the tour baggage area, and he explained, "What this roof eventually becomes is the future floor structure for ticket lobby expansion." Number 513 REPRESENTATIVE HALCRO reopened the question of baggage handling equipment. He noted that the funding source of the $13 million requested for the baggage system is not known; however, $2 million will be used for ERA/PenAir baggage relocation. He wondered where the additional $11 million will be coming from. MR. EBERLE said it is yet to be determined if the airlines want to pursue it as a separate CIP project, pay for the systems directly, or whether it is going to be under the PFC application. REPRESENTATIVE HALCRO noted that $1.8 million will be saved on interior construction for the third floor office spaces. He wondered if this was for the 9000 square feet of unfinished office space. MR. KETNER said no, and he explained that there is roughly 22,000 square feet available for future airport administrative offices on the third floor, as well as a "VIP room," the Alaska Airlines board room, and other lease offices. The entire third level would be left unfinished, and the interior building of that area is the $1.8 million figure. Number 534 REPRESENTATIVE COWDERY reported that a question arose last year about Project Labor Agreements (PLAs). He recalled that the commissioner of DOT/PF stated at that time that there were no plans for PLAs, and he asked if that has changed. MR. EBERLE said no, but he mentioned that it was his understanding that the commissioner of DOT/PF has recently been approached by union representatives interested in PLAs. To his knowledge, he stated, that has not happened. REPRESENTATIVE COWDERY felt that it would be inappropriate for a government project to enter into PLAs, and that it would cut out many contractors, possibly at a lower price. He emphasized that he would be very much against that taking place, and he believed it would not be in the best interests of everyone concerned. CHAIRMAN WARD confirmed that Mr. Ketner is Project Manager for the Terminal Redevelopment Project. He said, "If, in fact, ... these committees are under the impression that the project is not going forward as the way we had anticipated it when we funded it last year, and if there had to be a realignment of the project to work within the existing budget ... as project person, where would you reduce back in order to make this fit into the existing funding sources that there are?" Number 557 MR. KETNER indicated that the team put together a number of alternatives that were reviewed by both the airport and the airlines, and, in some cases, were reviewed in a public forum. They currently have a list of cost-cutting measures that do not represent the original concept versus the current schematic design. There are additional opportunities to reduce cost, he noted, but it would probably involve reducing square footage. They plan to take this to the air carriers and work with them to see where future reductions might be appropriate. CHAIRMAN WARD emphasized that the airport belongs to the public, not the air carriers, so he hoped that they were willing to take suggestions from the public. He asked if they had gone through "the exercise of staying within the budget." All of this money comes out of one pot, he added, and even the railroad is part of public funding. Moving money around from project to project still involves using money that belongs to the people, he explained. Number 580 MR. KETNER said, "First of all, all the costs that would be associated with a CIP would either come through PFCs, which would be generated as airport revenue, or it would be a separate CIP request generated as the International Airport Revenue Fund (IARF) ... under the standard CIP process." He felt that the important question for the project team to answer is, "How are we going to stay within the $230 million?" He indicated that it was fair to characterize the baggage system costs as substantially beyond what was originally anticipated. He admitted that there may have been some underestimation on their part initially; however, it was nowhere near the $13 million requested by the air carriers. The air carriers brought up that it is customary at other airports, in some cases, for airlines to bear that cost or to look at other funding opportunities. Tape 99-11, Side B Number 001 MR. KETNER declared that the Airport Redevelopment Project is still within its original budget, with the exception of the separate funding for the baggage, even with the increase of over 60,000 square feet. CHAIRMAN WARD asked if there was a contingency plan in place. MR. KETNER indicated that the contingency plan would have to be processed by going back to the airlines, the users of the terminal, and the public to look at how further cuts could be made. He related that the team has ideas as to what can be cut, but those ideas have not been prioritized at this point in time. CHAIRMAN WARD asked Mr. Ketner to submit those ideas to the committees as soon as they are available. Number 013 SENATOR PEARCE said, "Depending upon what calculation you used and whether you'd consider the escalation over the original project costs to be normal or not normal, you are now 17 percent over budget, if you count that escalation, plus the $20 million in original things that you are not going be able to do, or you're going to have to come back and ask us for more money one way or another, because if it's PFCs, it would still have to be appropriated. If it's IARF funds, that still has to be appropriated." Furthermore, she added, it is the people of the state of Alaska who will end up having to pay, as they are the ones who fly the airlines. She noted that PFCs have not yet been approved, and may not be approved, and that the additional $25 million requested may not be approved either. In addition, the project may end up being shut down until it is able to fit inside the original cost, because, she said, "we are not giving you any more money. This isn't like building a house and some rich uncle hands you more dollars. This is sticking with the budget." MR. KETNER asked for clarification as to whether or not Senator Pearce was including the escalation outside of the budget. SENATOR PEARCE said no. MR. KETNER clarified that the escalation was determined to the mid- point of construction, and the design and construction budget they are working to right now is $205.3 million. SENATOR PEARCE declared, "You have already used every dollar of that." MR. KETNER said that was correct. SENATOR PEARCE noted that every penny has already been used, and asked, "When you get to the midway, if you have some other problems, where are you going to go?" Number 032 MR. KETNER said, "In terms of ... program contingency, you are absolutely correct." SENATOR PEARCE reiterated, "You've already used all your contingency monies and you are three percent in." She again asked what the project will do now for funding if something comes up that they did not know about ahead of time. CHAIRMAN WARD asked Mr. Ketner, as Project Manager, if this is how projects are usually done. MR. KETNER indicated that the program contingency was initially set up for adjustments in the program. He agreed that it was fair to say there could be the need for some program adjustments in the future. He said there is a 10 percent change order construction contingency on new construction and a 15 percent contingency on renovation. In addition, he felt that a fairly conservative estimate has been built into the renovation figures, as they realized certain unknowns might be identified in the renovation process. He pointed out that they were fairly comfortable, at this point in time, with the renovation budget, but said, "That does not take away from Senator Pearce's point of view that some additional contingencies further into the project might be advisable." He added, "It appears ... right now the scope on the project has solidified to a point where we know what we're designing. We're at the end of schematic design, where certain decisions would have to be made, so that we can move ahead with higher level design. At this point in time, we've gone to the airport, we've gone to the airlines, to make those decisions and they've made them. ...We're moving ahead with the more detailed design in order to meet the schedule." Number 052 SENATOR PEARCE wondered if they said no to anything the airlines asked for, and, if so, what those things were. MR. KETNER said yes, and noted that some of the items were in the "Cost Reduction List" in the booklet, and that there were other ideas that he felt would provide a fairly severe cut, such as reducing gate lounge areas, ticket lobby areas, and baggage claim lobby square footage. He noted, however, that all of those items have fairly significant impacts on the functionality of the terminal. He stated that the team has tried to make decisions by taking into consideration both airline input and the best interest of the traveling public in terms of level of service. SENATOR PEARCE noted that the Terminal Redevelopment Project currently has both a language and a budget problem, and she suggested that they fix both of those problems. Number 065 REPRESENTATIVE COWDERY noticed that the final design is not scheduled to be done until July 2003; however, he wondered if it was still true that construction will not be started this year if the additional $25 million in bonds is not authorized. MR. KETNER explained that, in terms of schedule, Terminal "C" replacement is the most challenging part of the construction. He described a fairly tight design time line in getting a bid package out to begin the two phases of the project: first, foundations and steel, followed by the balance of the terminal. He indicated that one of the most important objectives, from the airport's point of view, is to achieve a replacement of Terminal "C" by tourist season of 2002. If it is not completed by April of 2002, he cautioned, the next point of opportunity to benefit from that improvement would be the next tourist season. CHAIRMAN WARD asked, "Is that a yes or a no?" MR. KETNER indicated that the policy has been to work with the airlines to address any significant changes in scope, and the time line to do that would jeopardize the design and construction time line, which are already fairly aggressive. CHAIRMAN WARD said, "So, if there was a 'blip' at this point ... the answer would be that it would not continue on. Is that correct?" MR. KETNER stated, "I think a fair way of answering that is that there is a chance that the time it would take to redefine the changes would slow down the design process to where we may be pushed to 2003 for Terminal 'C' replacement or to have that be the next benefit year in terms of a peak period for tourism." Number 098 REPRESENTATIVE COWDERY asked if Terminal 'C' was estimated to be around the $60-million range. MR. KETNER said yes. REPRESENTATIVE COWDERY noted that the demolition would be started within a couple of months, and the contract replacement would be let in January 2000. He said, "At the time that the contract to Terminal 'C' was let, that money would be in place to ... for that contract, obviously. It would have to be in place." MR. KETNER said that was correct. REPRESENTATIVE COWDERY continued, "So, there would be other things that probably cost more than what we are talking about, the $25 million, that would be considered ongoing projects, that the contracts probably wouldn't be let at that time, or it might be let at a later date. Is that right?" MR. KETNER said he believed that was so. He added, "I think it's a fair statement to say that we're at the end of schematic design right now, and we have defined this piece of work as the biggest challenge for our design team. To get a package out on the street by [the] end of 1999 for foundations and steel is a significant challenge from a design perspective. That's our critical path right now. So, telling our design team what it is they're designing, this is where the decision point has to come in order to meet this time line for construction." He noted that if the design time line is moved, other lines will have to slide out as well. REPRESENTATIVE COWDERY said, "It seems to me that this is a $230 million project, and, certainly, [we're] not going to let a $230 million contract in this year ... or next year. It'll be phased into different phases." MR. KETNER confirmed that was correct. Number 125 MR. EBERLE stipulated that, if the legislature had concerns over the present scope of the project, and they were not going to get the $25 million requested, they would have to go back and redefine what it is they are going to build, in terms of the new Concourse 'C' replacement, and that would stop the project. He added, "If we have to carve $25 million out of this overall project, we need to sit down with the airlines and figure out what they can live without, what is going to be the least disruptive to them. That process is going to take time, and, as Don [Ketner] mentioned, the design for Concourse 'C' replacement is the critical path." He pointed out that any disruption of the critical path pushes the end date out. He added, "If we have to re-scope this project and cut out additional aspects of the terminal, we need to do that before we've gone ahead and designed it; otherwise, we've thrown away all that money." REPRESENTATIVE COWDERY clarified that the project would still receive $25 million eventually through FAA at approximately $2.5 million per year. MR. EBERLE said that was correct, but that it would redefine "what gets built in what time line, and we can't do that unilaterally. It was a package deal when the airlines voted on it: airside, landside and the terminal." Number 151 REPRESENTATIVE HALCRO had a question for Morton V. Plumb, Jr., Director, Anchorage International Airport, DOT/PF, who was on-line from Anchorage. He mentioned that he had asked Commissioner Perkins last week about the airport's rumored expansion into the Sand Lake Gravel Pit area, and that he was assured the committee would be "kept in the loop" should discussions progress. He asked Mr. Plumb if there has been any discussions with private developers trying to pitch the airport expansion into the Sand Lake Gravel Pit area within the last four to five months. Number 161 MORTON V. PLUMB, JR., Director, Anchorage International Airport, Department of Transportation and Public Facilities, testified via teleconference from Anchorage. He said, "The short answer to that is yes. We have continued to have people that have done some exploratory work in that area. We have not had anyone officially come to the airport with an application or with an exact plan. As you may be aware, we are going through our master plan update at this time. We are probably about 30 to 35 percent through that. At the end of that time, that will give us a much better idea of future land requirements and the time that will be needed." REPRESENTATIVE HALCRO asked if these private developers were the same individuals that approached him one year ago. MR. PLUMB said yes, but that he was uncertain if they now represent two different groups or are still joined together. REPRESENTATIVE HALCRO asked, on behalf of himself and Senator Pearce, to be kept updated as far as these discussions and activities. He stressed that it was very important to their district, especially with some emerging subdivisions right in the path of expansion. He said, "I know, at one point in time, the developer had asked you for 'confidentiality,' but ... the fact is that this is a public process. The airport is a public facility" MR. PLUMB recalled that some of these individuals actually went to some of the community council meetings at Sand Lake. He thought the only thing that had been requested from them in the way of proprietary information was their layout or business plan, but he felt the intent was pretty well-known. Number 190 CHAIRMAN WARD recommended that individuals also attend community councils in Bayshore, Klatt and Ocean View, as they seem to have some concerns about flight patterns. MR. PLUMB indicated that he would be happy to do so; in fact, he lives in that area. Number 201 CHAIRMAN WARD asked Mr. Eberle to be sure to be in contact with Chair Masek's office and his office so that some type of a plan can be formulated. He concluded by stating, "I think that, as we all voted for Representative Cowdery's bill last year to do this, it was the intention to do one thing, and, if the majority of the legislature didn't understand what they were voting on, then we need to reeducate everyone to see if we can all get back on the same sheet of music, and in a timely manner." Number 210 ADJOURNMENT There being no further business before the committees, the joint meeting of the Senate and House Transportation Standing Committees meeting was adjourned at 2:42 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.