Legislature(2003 - 2004)

04/01/2004 01:35 PM Senate TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   SB 371-POWERS/DUTIES DOTPF                                                                               
CO-CHAIR WAGONER announced SB 371 to be up for consideration.                                                                   
SENATOR  GARY  STEVENS, sponsor,  said  this  bill cleans  up  an                                                               
obsolete  statute  at  the  request of  the  DOTPF  and  Attorney                                                               
General.   An   Executive   Order    (EO)   created   an   Alaska                                                               
Transportation  Council  in the  1970s,  which  directed the  DOT                                                               
commissioner to  consult with the  council on  all transportation                                                               
projects, but the  council never was appointed. The  state is not                                                               
complying with  this old statute  and it  could be the  basis for                                                               
litigation. SB  371 amends the  statute and makes  it retroactive                                                               
as  well.   Other  changes  allow   the  commissioner   to  study                                                               
alternative fuels  for use in  state vehicles and  changes annual                                                               
requirements  to periodic,  which  will  allows the  commissioner                                                               
discretion in choosing sensible times.                                                                                          
SENATOR LINCOLN asked what projects  are being held up because of                                                               
litigation on this issue.                                                                                                       
SENATOR  GARY  STEVENS answered  the  Iliamna  bridge project  is                                                               
being held up for one.                                                                                                          
MR. OTTESEN elaborated that the EO  became law years ago when the                                                               
legislature did  not take action to  keep it from becoming  law -                                                               
by default.  It never underwent  an approval process.  The bridge                                                               
lawsuit  has three  issues:  the council  was  not formed,  DOTPF                                                               
didn't consider  cost and  benefits at the  time the  project was                                                               
selected and  that the  project was  baselined [this  project was                                                               
treated as  on-going in the Southwest  Alaska Transportation Plan                                                               
and it  shouldn't be subject  to additional planning].  The court                                                               
found in favor  for the state on two of  those arguments - having                                                               
no council  and baselining, but the  cost and benefits had  to be                                                               
fully evaluated. He explained that  the department didn't feel at                                                               
that  time that  rural projects  would ever  measure up  to urban                                                               
projects if they  were measured by the same  test, simply because                                                               
rural projects serve  far fewer people. Rural  and urban projects                                                               
didn't  have  the  same  set of  questions  on  the  department's                                                               
scoring criteria. This is the fault the court found.                                                                            
The  department is  backing up  in  its Southwest  Transportation                                                               
Plan and selecting this bridge and  one other that was also under                                                               
construction.  It is  reconsidering costs  and benefits  for both                                                               
projects, which will cost about $50,000.                                                                                        
     Our fear  is that  this particular legal  theory, which                                                                    
     now has been upheld by the  courts, can be used on many                                                                    
     other  projects,  including  projects  that  are  under                                                                    
     construction  right  now,  projects  that  are  in  the                                                                    
     design pipeline and will soon be under construction.                                                                       
He explained that  his major concern was that  selecting only the                                                               
most cost effective  projects would leave out  all rural projects                                                               
and would  make 40 percent of  Alaska's population transportation                                                               
SENATOR LINCOLN  said she  didn't want to  see the  state without                                                               
performance standards  for rural  Alaska facilities  in reference                                                               
to language on page 3, line 24.                                                                                                 
MR.  OTTESEN  answered that  years  ago  the department  was  the                                                               
architect  of school  district facilities  in  rural Alaska,  but                                                               
authority  was transferred  typically to  the local  governments,                                                               
rural education attendance areas or boroughs 15 years ago.                                                                      
SENATOR  LINCOLN said  that thankfully  there were  not a  lot of                                                               
boroughs out there, but she  didn't know if anyone was identified                                                               
as  the  responsible  party  to   accomplish  what  the  bill  is                                                               
MR. OTTESEN replied that he  understood her concern, but the bill                                                               
before  the committee  is  truly housekeeping  and  isn't at  the                                                               
heart  of what  the  department is  doing to  try  to save  rural                                                               
transportation projects.  "We're really concerned about  the cost                                                               
and benefit language and how that  may be applied to projects all                                                               
across the state."                                                                                                              
SENATOR   THERRIAULT  asked   if   the  same   result  could   be                                                               
accomplished  by  just  passing  a  letter  of  intent  with  the                                                               
MS. SUSAN YURIG, Department of  Law (DOL), said that the language                                                               
in the bill protected regulations from being exposed.                                                                           
SENATOR  LINCOLN  moved  Amendment  1  to  reinsert  the  deleted                                                               
section on page 3, line 24,  through page 4, line 19. The sponsor                                                               
didn't object. There were no objections and it was so ordered.                                                                  
MR.  MARK HICKEY,  representing the  Lake and  Peninsula Borough,                                                               
supported  SB 371  and said  the  focus of  the lawsuit  is on  a                                                               
project  that has  been this  borough's number  one priority  for                                                               
over  10 years.  It  completes a  road  connection between  three                                                               
communities  that  has tremendous  benefits  in  terms of  saving                                                               
transportation  costs  and  lives.  He   said  the  goal  of  the                                                               
Executive  Order was  to give  DOT a  strong presence  working on                                                               
public facilities.  After the change  in planning  authority, the                                                               
department  has not  had the  facilities technical  expertise for                                                               
the last 15  years. It has had all federally  funded and no state                                                               
funded projects.                                                                                                                
CO-CHAIR WAGONER  commented that often the  cost benefit analysis                                                               
overshadows  issues of  loss of  life and  safety and  the socio-                                                               
economic impact of  a project. "I think that should  have just as                                                               
much weight as the cost benefit analysis in some cases."                                                                        
MR.  JEFF PARKER,  representing  Bob Gillam  and Trout  Unlimited                                                               
presented the  other side of the  issue, which is whether  a cost                                                               
benefit analysis needs to be  present in statute for all projects                                                               
or  amended.  He said  this  legislation  would not  block  every                                                               
project under  construction, because the requirement  to consider                                                               
cost and benefits applies only to new projects.                                                                                 
The second issue  is that the current statute does  not require a                                                               
positive cost benefit  ratio; it only requires  the department to                                                               
consider  it.  He referenced  attachment  D  in his  letter,  the                                                               
Southwest  Regional  Transportation  Plan  that  gives  the  cost                                                               
effectiveness  data on  five proposed  projects in  the Lake  and                                                               
Peninsula Borough,  and it  shows the Williams  Port to  Pyle Bay                                                               
road coming out as paying for  itself. He asked the committee why                                                               
a project  like Iliamna Nondalton  should be funded, with  a cost                                                               
benefit ratio of 0.26 instead of  a project that comes out with a                                                               
favorable cost benefit ratio.                                                                                                   
He said there has been only  one reported fatality in the last 15                                                               
years  of  someone drowning  in  the  Nondalton area.  The  state                                                               
trooper's  report  on that  fatality  says  a snow  machine  went                                                               
through  the ice  and  the  driver was  inebriated.  There is  no                                                               
evidence  that the  person was  trying  to cross  the river  from                                                               
Nondalton  to Iliamna.  Mr. Ottesen  conceded that  was the  only                                                               
death. A much  more effective use of dollars from  a safety point                                                               
of view would be to build a bridge between old and new Naknek.                                                                  
     I am  convinced you will  end up funding  projects that                                                                    
     will  not  be  well   justified  if  you  abandon  this                                                                    
     requirement  from state  law.  It  simply makes  sense,                                                                    
     particularly in times of budgetary constraint....                                                                          
He  referred the  committee to  section (1)(b)  of the  bill that                                                               
affirms  the  validity  of   the  State  Transportation  Planning                                                               
process and  asked, "Affirmed  with respect  to what?"  He didn't                                                               
think that question was answered  at all. Further, he pointed out                                                               
that Mr. Hickey was commissioner  when portions of that money was                                                               
spent, but the project didn't  get completed before his successor                                                               
found  that it  was  economically unjustified.  "If  you want  to                                                               
continue  that  process  of wasting  money  on  poorly  justified                                                               
projects, then go for the bill."                                                                                                
TAPE 04-15, SIDE A                                                                                                            
MR. PARKER noted copies of cost benefit analysis that he had                                                                    
sent the committee and asked if it didn't make sense for the                                                                    
department to have that kind of information.                                                                                    
CO-CHAIR WAGONER said he just  received the information today and                                                               
wanted  to hold  the  bill  for further  review.  There being  no                                                               
further business to  come before the committee,  he adjourned the                                                               
meeting at 3:35 p.m.                                                                                                            

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