The House Finance Committee to order let the record reflect that it is 1.33 p.m. on Monday,
January 26th, 2026.
Present today are Representative Hannon, Representative Moore,
Representative Stapp,
Representative Bynum,
Representative Thomas Shefsky,
Representative Galvin.
and the three co-chairs, co chair, foster,
cochair Josephson, and co Chair Truggy.
Also present today are House Finance Committee staff,
Committee Assistant Helen Phillips,
Paige Tallulah-Lestefka, Secretary Brie Wiley,
and Secretary Leah Frazier.
We also have our moderator, Emily Mesh
from the Legislative Information Office with us.
Before we start, please mute your cell phones.
In today's meeting, we will hear the Office of Management and Budget present on the Governor's FY26 vetoes.
With us today is Lacey Sanders, the OMB Director.
Joining her from the Department of Transportation will be when he gets here, Commissioner Ryan Anderson.
With this is his Administrative Services Director, Dom Pannon.
Director Sanders and I think Mr. Pannone,
please come forward and put yourselves.
Or whatever you're most comfortable with, rather do it separately, that's fine.
Put yourselves on the record and begin your presentation.
Presentation.
Presentations.
Thank you Chair Josephson.
Good afternoon members for the records.
My name is Lacey Sanders.
Director of the Office of Management and Budget for
I am not going to start with the House Finance Committee
presentation.
That's before everyone.
There should be a variety of spreadsheets in your packet.
But before we dive into those, I just
wanted to just provide some brief remarks overall regarding
the vetoes from fiscal year 2026.
As the legislature exited the legislative session last year and
passed their versions of the operating mental health and capital bills.
If you recall from my presentation on Friday,
the budget was built at a much higher dollar value based on the spring forecast,
which was proposed to be at the $68 value.
price per barrel. At the time in June, the Office of Management and Budget was
working very closely with the Department of Revenue as we were monitoring the
price of oil dropping.
very significantly and being very volatile at that point of the fiscal year.
So the spring forecast had been released in March.
Fast forward several months ahead, we were seeing that price come down.
So, the Spring forecast has $68 a barrel at the time that the governor was addressing the bills and
through the veto review process and signing them into law.
a $64 a barrel projection.
So we had seen almost a four dollar decrease
in what we were projecting.
And out there on the Department of Revenue's website
is a letter from the former commissioner of revenue.
Outlining where we were at that point in time and also providing several scenarios
You know a five dollar increase a $5 decrease so forth to give people a general idea of where
The the the remainder of the year was going to be
From there the governor
took that very seriously and wanted to ensure that the state was not in a position of
you know, substantial deficits and proposed approximately just about $122 million
for worth of vetoes between the operating and the capital bill.
So today, there should be three spreadsheets in the committee members' packets.
Chair Josephson, I wasn't going to walk through line by line
But what I would be happy to do is to start with one of the the summaries and we can talk or address any questions that members may have
pertaining to the information these are the same veto summories that were released last June when the bill was signed into law and
If that if that works for the committee, that's how I'd offer to proceed sure okay
So we could start with the office of management and budget fiscal year 2026 budget, HB 53 veto summary, this is a one page summary that encompasses the vetoes that were associated with
the operating bill.
It's before us.
Great. And so, Chair Josephson, I will defer to the committee if there are specific items that members would like me to address.
Do members have any questions about the operating budget vetoes?
So they total in UGF 57 and a half million dollars
Chair Johnson that is correct. Yes, and how much is coming back to us as as hope for supplemental?
Chair Josephson, so I will I'll highlight
two items on this sheet that we will see that
we see already in the December 11th budget that was
released by the governor as supplemental items and
they are on.
Row number 24 and row number 27, so line 24 or row 24 is the capitalization of the disaster relief fund.
This was a veto of about $10.3 million with the veto, it would have retained.
$13 million when we had worked with the Department of Military and Veterans Affairs during this
review. We were seeing approximately a million dollars per disaster, or excuse me, per month
for disasters specific to the disaster relief fund. So that was how that estimate was derived.
request before the legislature as noted in my last presentation we saw the typhoon hollong
which was a substantial cost to the state and so we are proposing 40 million dollars be added back.
This was a veto of approximately $26 million.
It would have retained $47.5 million
in the budget for a fire response.
This item we do have a two,
we discussed them last week,
two notifications to the legislature
to address fire totaling $55 million
that number is not the complete number and we will be talking to the legislature about future
requests to address the remainder of costs associated with the fire fund. One thing I will
note about the Fire Fund and also similarly with disaster relief fund is those costs aren't all
over time, and so some of the costs that we're seeing associated with the fire fund are related to prior year
processes where they've gone out and closed out the Fire,
and now we have the correct amount that should be associated
for the state's cost to address the
fire.
Representative Galvin and then Hannah.
Thank you, co-chair Josephson through the chair. Thank You Director, Commissioner.
Appreciate you coming to answer some of these questions,
and I'm not sure that these will be questions
that you can't answer, but I am going to ask
since we're having this forum,
and it sounds like you're here to discuss the vetoes.
There are a few in education that I was seeing here,
and, I remember that the governor asked for these,
and that's why we were very, very...
judicious, I should say, careful to not add funds and where I'm most concerned I guess
is where at the top line, highest priority teacher recruitment, mentorship and apprenticeship.
I heard over and over how this was such a high priority and so I'd guess I would love
There was a bill passed by the four let's see it would have been by
the 33rd legislature that would give teacher incentive payments for
national board certification.
That's another one that got completely zeroed out.
In fact, we passed this statute and then we've never funded it.
teacher recruitment and retention is our top priority.
I'm concerned that this is where,
and it's 500,000.
It's not like it gonna make or break the bank for us.
And yet, that's what was chosen to be removed.
So I am hoping you can speak to that.
And then the last one is around the grant,
the repeal the Grant Resource Education grant.
I know that was a very.
Oh, I see it's been zeroed out, never mind, that one is not one.
So just those two are vetoes that are concerns of mine.
Through the chair, Representative Galvin.
We take this process very seriously when we're going through the view-to-review process
this these these were reduced as
You know indicated on the spreadsheet due to declining revenue they were zeroed out and I don't have anything further
What I was hearing from
Through the chair if I may with a follow-up. Thank you
what I heard from
About other vetoes is that they found ways to make sure that these
pieces of work or services if you will were kept whole one way or another and I'm wondering if there was any of that thought for these two
vetoes if we've been able to
Move positions or move money or moved positions so that there is money so
That we would be able follow the statute that we passed
Through the chair represent Galvin no to my knowledge. No, okay. Thank you
Thank you, Coach, or Josephson.
Ms. Sanders, I want to go to the Disaster Relief Fund.
If I take the supplemental request of $40 million
and the fund that after the veto retained $13 million,
can I presume that our cost for the fiscal year
for disasters is $53 million?
Through the chair representative Hannon, I wouldn't say it's for that specific year
These are disasters cover multiple years. We work very closely with the MBA didn't share
But yes, 53 million is the total appropriation amount. Okay follow up
Can you remind me what you have requested in the FY 27 operating budget for the disaster fund?
through the Chair Representative Hannen, yes
24 million dollars for
fiscal year 2027 and again that was based on the 10-year average that we talked about.
I did get a bit more information of the difference between a 10 year and a 5 year that
was asked from the committee. The 10 years average would actually include the 2018 earthquake
as well as both of both the typhoons that the state has experienced. So it's just one way to
open to conversations about what is the correct approach.
So, representative Hannon.
So follow up, I guess I'm just looking,
so by including the earthquake of 2018,
are we getting to a higher average than we did last year
for using a five-year window?
Oh, sorry about that, Representative Hannen
through the chair.
Calling on a lifeline there the five year and the tenure are actually similar, but we will we're still following up with the committee on more detail. Okay. Thank you. Yeah, thank you, Mr. Chairman.
Yes, represent by them.
Thank You, co-chair Josephson and just as a quick follow up to that question when we talking about looking at these numbers and we are looking
at five-year averages versus tenure averages specifically when were talking
about disasters.
Are we looking at any other or considering any
other factors in that or is it purely just the map?
So what I'm trying to particularly get at is that we know that when we're looking
at things like force fire, wildfire, or hurricane type relief, that there's specific
models that we can look at and have some kind of an expectation about what is
this you're going to look like or next you gonna look
like by looking at those models in general that might inform us that
we are gonna have a high fire year or not. Are those factors that are being
considered or again are you just looking a five-year average and just saying
well if it's gonna be way over then we're gonna come back and ask for a
supplemental or if we think it is too much we gonna veto or remove it from the
Through the chair, Representative Bynum, so specific to fire the Department of Natural
Resources has a very experienced team that does look at all of the data surrounding fire
and what a fire year is anticipated to look like based on historical information.
for 27 utilizes the same amount
that was appropriated last year.
It doesn't increase.
And again, part of that is based on
the, we're capitalizing a fund
and that funding isn't lapsing on an annual basis.
So as we see numbers are
see the amount that's needed from year to year, we should strive to get some type of average
that is going to cover the multiple years. So where you have high years, yes you
have to deposit it in maybe because of prior years because we are still getting this fund
under our belt. It's a new fund. Hopefully what we will start to see is that trend line stabilizing.
with what we're depositing in to cover the highs and the lows.
And we will get away from the swings that we are experiencing.
Follow-up, Representative Bynum.
So specifically, the department is taking into consideration the informed information from
the, specifically from departments that are experts in that area.
Through the chair, representative Bineum, yes, I have met with them on behalf of the information.
the spreadsheet spanning the HB-53, the operating budget, repeal of, for example,
statehood defense funds from previous years.
I understand the note well enough.
That sounds sort of like the debate over the Juneau access road that the dollars are obligated.
And that can be a murky set of facts that could be, I'm not saying in this instance,
In other instances perhaps this instance could be disputed, but but where how does the administration?
What is the Administration's position on efforts by the legislature to claw back undisputed dollars un-obligated unspent?
the governor has struck those and
Tell me what the the Administrative position is on the legality of striking
dollars that that in a circumstance where there's no dispute they weren't spent.
Chair Josephson, first I just want to note for everyone I am I'm not an
attorney. I defer any legal type inquiries like that or analysis pertaining
what is legal or not to the Department of Law.
I did receive the memo that you had provided in the packet,
addressing the questions regarding the repeals
and the governor's line item vetoing those items.
I have shared that with them.
They are reviewing it now.
I'm going to defer to them from our perspective.
appropriate in this case and was made and I will defer to any further comments or
remarks to the Department of Law on that one.
Okay, and that's fair enough.
I wouldn't know in particular whether last summer I had routed this opinion to
your office or not, could have been distracted by any number of things or
I guess if the legislature strikes or tries to claw back what we deemed to be
unspent dollars and spends them over in a different area, entirely different
area the governor I I Guess what I'm wrestling with and again you may prefer
should, shouldn't the governor or could the Governor
just strike that item because that would be a new purpose.
And then that gets in the question of,
is the government even allowed to since it's the same dollars?
But this certainly is apropos of part of the reason we're here,
I think on the Department of Transportation issue.
So I may be muddying these waters,
the top expert on this, Representative Hannon.
So I thank you Mr. Chairman.
I want to go to item number 10 on
this list, it's a department of revenue.
It was a $1 veto, but it was
a structure within the budget with
directive language to decommission the.
office at the permanent fund corporation that had been created in the previous fiscal year without legislative structure or funding.
And my question is, with that veto of a dollar,
what structure remains at permanent funds corporation for funding of second office that has never received legislative authority or appropriation for it?
Good chair representative hannon the administration's stance on this item has been and continues to be that
management is a
management and administration of functions and programs within agencies is at the discretion
of the state, at at discretion of administration. The Anchorage office, the staff continue to
work out of that area. Um the prior years, appropriations spent from one appropriation as we continue
follow-up reps in the hand in follow up and thank you chair josephson and
Remind me that that office is not located in this state office building and anchorage is in a separate facility with a
Separate lease than other state facilities
Through the chair
I don't know the physical location. I apologize.
I do know it was located co-located in a
Department of Environmental Conservation's space previously and I would need to follow up if that is still the case
Thank you
And I Don't see
Our returning this marks on the line now, but but if there are questions from the committee about this fairly complicated issue
Now I see her on the line. She is available to answer them. Any other questions from the committee?
The subject is vetoing
Repealers
Representative Galvin and then staff
Thank you. I have it just a general question. It happened to note that
third or so of these
30 29 lines though nine of them are directly related to education
or child care and that's not counting how we know that things related to health care
diseases and things like that are also affecting children but a third of these
are taking away services to children and I wondered if you were in the back room maybe you know was
Was there any thought around education taken care of?
So let's scoop some out of that.
I'm looking for an understanding for this,
because it's when you look at it like this you can really see
that many of these lines are directly affecting our children.
Director.
Through the chair, Representative Galvin, I do not,
I don't have anything else to add for you.
Okay.
Thank you
Representative Stapp.
Thank Coach, you're just in through the Chair too.
Saunders, thank you again for being here.
I'm trying to go down memory lane again
because the Coach here kind of made some comments earlier.
Got my brain thinking in terms of encumbered funds
monies and stuff like that, can you walk me through when the, you know, administration had these funds
that were later used by the legislature for re-apprope kind of in comfort because I know that there's
kind a time delay on the caster and things like. So when did we decide, hey, because you
know the report comes out in like November and then we have the construction season and typically
money gets appropriated quite quickly or encumbered quite quick quickly to get projects out the door
Through the chair, Representative Stapp, and we can turn to the capital page next if the committee would like.
So we have a process at the Office of Management and Budget.
It's quite intensive as far as the work that the departments need to do to go through what we refer to as
the Capital Appropriation Status Report or CASR.
we pull information from our state's accounting system it is a point in time and the departments
work through their process to go through project by project project and provide updates on those.
Once they're done with their review it comes to the office management budget we go
in January. So we have a significant time delay between when we're pulling information
from our accounting system and reporting it to the legislature. Fast forward to March
April, May when the Legislature is working on rolling out their versions of the operating
or the capital budget that utilizes reappropriations, the information in that report is now up to
I think there is an opportunity for us to work with the legislature to get more
detailed information or more updates. I don't think we have the capacity and state agencies to go
through an entire CASR review again just because it does take such a significant amount of time,
especially for agencies like
the Department of Transportation and Public Facilities,
or the department of Commerce, Community and Economic Development,
but ensuring that we have more accurate information
for the legislature to make decisions
is something that can definitely work towards
so that aren't putting ourselves in a position
where the departments are continuing to operate
and work on the projects that they have been assigned
and they've obligated the funds through
legal contracts between that November timeframe and March or April.
Follow-up representatives, Dan.
Yeah, thank Coach, you're just into the chair.
Yeah. I think that's very helpful.
Obviously, I'm fairly understandable that we would operate.
on a time delay here and CAST reports huge,
like thousands of lines of stuff going on there.
So I'm curious, did anybody like reach out to you guys
and say, hey, before we steal this money,
we're gonna make sure that you didn't have a contract side
or anything like that before they did the reappropriations
through the chair?
Director.
Through the Chair, Representative Stapp,
I was not reached out too on any items
on getting updated information.
But that doesn't mean that there aren't a lot of conversations occurring. I would hope that you know
We could get the most updated information in a formal process to the legislator to ensure we're on the same page
Follow-up represents. Yeah, I think coach you're just into the chair
Yeah it I mean it seems kind of weird to me that we wouldn't want to reach out to them OMB director
I mean, obviously you're not gonna always have all the information, but I hope in the future that you know people in this body and the other body will
kind of remember that the administration
There are lots of moving pieces and we don't really want to be in
the business of kind
of micromanaging departments and
In the event that we kind have these ideas again, maybe we'll give you a call next time. I help through the chair. Thanks
I see representative Bynum
Tom Myshevsky and then Hannah
Thank you, co-chair Josephson.
If I could just wait to ask my question
and go ahead and let the others go for it.
Representative Tamishevsky.
Thank You, Co-Chair Josephsen.
Actually, this is for question for the chair
in regards to your memorandum dated June 24th, 2025.
I don't know if I've seen this before.
I know, I guess it was up.
Loaded like 15 minutes before the meeting was there any response from the governor or attorney general?
Have you have you solicited a response to this memorandum from?
The governor is there anything on record for that?
The short answers no the the longer answer might be
Not not to dispense for the short answer the answers. No, but
This does raise some key separation of powers issues.
The committees that normally would take that up would be,
I think, LBNA and Legislative Council.
And I sit on LBMA, but no motion has been made yet relative to this issue.
Okay, so, no response.
The vetoes were made at the time this memo was prepared.
Had I shared it with them, they weren't going to undo the vetoes.
So I didn't share it
with the administration.
Okay, thank you.
So now Representative Bynum then Hen.
Thank you, co-chair justice.
And I think it's a, I was going
to ask something similar about this particular memo.
I thing it is important for the conversation that had been had.
And, and I don't know that I had seen the document before.
So this was kind of a first time to really go through briefly and I'm just hoping because you'd mention the fact that the attorney was on the line
It's open that you could re-clarify what the question actually was
How it's important to this conversation and then the the having the law department
Give it layman's terms of what their opinion actually is. I mean, like I said, it said
Document I think has a lot of speak for itself in there, but it is a legal document
So it would be better to kind of understand that so we have it in context to this conversation today
I'd be happy to do that miss marks are you with us on the line?
Yes, um, hope you can hear me okay. I'm using the new ring telephone system for the state
Um, But for The Record, this is my mark with legislative legal services
And I think through the chair, if you could just restate the question, I
think it can be put into plain language. The question and the answer of the
memorandum, is that right? I Think that's fair. Yes. Sure. Yeah, through
the Chair, Representative Bynum, the layperson's quick question
include the ability to strike language that does not
appropriate a sum of money.
Here, striking language
that repealed previously enacted appropriations.
This has not squarely been addressed by the last of the Supreme Court,
but in 2001, in a case that talked about what is an appropriation item
and what does the governor's veto power encompass,
Strike or reduce means reducing
an eye is lessons of the amount,
and striking means it lessens it to nothing.
And so I think there's a real issue here
about what power does the governor have
to strike the language that reveals an appropriation.
Since, as you know, when you strike or repeal,
you're not less mean about nothing,
you are actually raising the number of appropriations.
That's it, that's completely.
As I can explain it, I'm a lawyer, so keep that in mind.
But if you'd like further clarification,
I'd be happy to give it a go.
Ms. Marks,
I have a question for you.
If monies are repealed or there's an attempted
clawback presumably based on facts known by the legislature
that those dollars were unspent and held.
And could the governor then veto the re-appropriated dollars
from that repeal?
In other words, could he not strike the SLA language
as he did, the session law of Alaska language
from the previous years, but strike
the new expenditure?
legal services to the chair. That is interesting. New on, that's not what happened here, but
if the legislature makes an appropriation and a re-appropriation would really be a new appropriation
using money that was unspent, then that the governor would have the power to for that new
appropriation, I think, reduce the amount of that no appropriation or strike that
as long as the quantitative effect is to diminish the amount appropriated.
That's what the court said in NOLS.
The power the governor has is the diminished amount
appropriated, so long does that occur
than I think it's within the Governor's constitutional power to veto.
An appropriation item. All right,
so I've got a line up here. Representative Bynum, were you
done with your questions for the time? So what I see in my list next is
Thank you, co-chair Josephson, and I'm going to use somewhat of
representative staff's inspiration and question to director Sanders, but I am going ask
DOT
Mr. Pinion before the re-appropriation length because the largest reappropriated money was
DOT monies from previous projects that was then going be used for federal match and that
was vetoed
Was the Department of Transportation Public Facilities
requested to provide information on whether those funds were fully expended or obligated?
Mr. Penone for the record Dom Penon director program management administration at DOT
through the chair
representative Hannon
For some of the re-appropriations for our match
legislative finance division had reached out
for new balances from the CASR as we discussed.
The CASCER is a point in time.
The Legislative Finance Division
and some legislative staff reached out
and asked for specific balances.
We provided updated balances
and then provided a letter advising
that these were needed,
that those match balances were need for August redistribution.
They had already been incorporated into our project delivery plan.
And that the age did not negate the need for a new additional match which we had requested.
On the other re-appropriations of the projects used in our match, such as Cascade Point and a project in the Matsu Valley.
I don't recall any conversation on that.
And some of other projects were not our DOT appropriations, so I can't speak to those.
Follow-up rep handed. So did the other bodies finance committee capital chairs?
Office reach out to ask for accurate up-to-date data before the reappropriation of money that was in DOT
The cascade well, it's Juno access project money at the time
Before that, was put in the capital budget as a re-appropriations
mr. Penone
Through the chair representative hand in and we talk. We have a whole slide dedicated to the Juno access project
I'm not aware of
a request being made from the other body or any legislative body
Okay coach your shruggy
Yeah, thank you coach you're josephson similar line of questioning or just to pick up where
Representative Hannon left off when with respect to the cascade point projects where those funds encumbered was that after the
Legislature legislative budget came out or can you give me a timeline on that?
Mr. Penone
Thank You mr. Chairman through the chair representative shawty the
The cascade-point project, so we'll have we have the timeline here
I'm going back to April of 2021.
So the the on this slide we show at the top the 4.5 million
that was spent to date prior on design prior to the.
the re-appropriations, you can see the engineering and feasibility and then 35% design build.
So we were in the process of going to contract, to
contract out the work prior to the Re-Appropriations.
The specific date of the contract I don't, if it's on here.
Don't have at the top of my head, but it would have been prior to the effective date of the bill
and was was certainly
Prior to any action taken on the Bill and our commissioner may have anything to add
Commissioner welcome. Yeah, Chair Joseph and thank you
Yeah on this one we wanted to build the timeline so so everyone could have because we understood that this was a big focus for us
And you can kind of see on this slide, you know, the different dates and how we went through,
just to show that when we're going through the project delivery process,
I mean, we are making a lot of commitments ahead of time.
And so when you get to the end, and we were awarding contracts,
there's a significant investment that's been made.
On this side, it's $4.5 million.
That was spent to date on that as well. So this hopefully this provides some clarity on cascade point and the timelines and and
the different milestones for all of you
represent Hannon
Thank You co-chair, Josephson
Commissioner, can I ask why the department did not request that the money that had been designated for Juno access be
re-appropriated to cascade points
So that this confusion didn't develop so that we knew that it was being spent because
It is my understanding we kept asking for how much is left in the fund and
There was no updated money
But if your timeline shows that was obligated why why weren't we either asked to re-appropriate it so
That we know it's being spent and it spent obligated or
We got accurate information to work from
Commissioner yeah through the chair representative hannon
I'm not aware of being asked prior to the re-appropriation for the balances on Cascade Point.
This was something, you know, we had always gone forward,
the scope of those appropriations was a fit for that Cascade point project.
So that's how we were moving that one forward.
All right.
Coach Hregge.
I guess how would you interpret the legislature's reappropriation of those funds?
I mean, what do you intreput the legislative intent to be if those
funds are re-appropriated to meet federal match?
For the record, this is Lacey Sanders, just because there's been a lot of voices
Through the chair or co chair can I interrupt for just a minute? I apologize. Can we get closer to the mic? Thank you
Thank You. Sorry about that. Uh, so through the Chair co-chair shruggy
Sorry, I totally lost my train of thought there. That's okay. Yeah, coach your shruggin for the record the intent
How do you interpret the intent of the legislature in our reappropriating the cascade point funds?
Through the chair
Representative or coach or shruggy. I don't ever want to speak on behalf of legislature. So
but by putting forward a re-appropriation the signal to
And the narrative behind it was to utilize
Balances of projects to meet that match
The concern from the administration's perspective, and I think Commissioner Anderson and i will both share and be in agreement is
We don't want to put ourselves as a state in a position where we don t have the match because of those funds have already been
Obligated or are no longer available because they've already Been spent
That would set us up for a situation where?
We can't meet our federal obligations
The the action was
Reduce veto those appropriations and come back to the legislature with a request for unrestricted general funds to meet that obligation as a state
So do you have anything?
Follow-up
Yeah, I mean I
As a legislator just speaking for myself in a constrained revenue environment
I think we have to balance our priorities in my
as a co-chair of the finance committee having worked closely
with the other body but not to speak for them.
I'd say I think that we made it clear that,
we felt that meeting federal match was more of a priority
than putting up the funds for the Cascade Point Project.
And I'm not going to to your intent,
but, or the administration's intent more specifically,
but it seems to me that the administrations point,
or that effect is to,
say we're not going to meet the federal match we are going back to the legislature to find
a new funding source and we will move forward with cascade point anyways.
And just as the appropriating branch of government I find it very problematic and difficult for
us to define trust through the appropriate process.
So I guess we'll have to work more closely this next year as we navigate this process
to follow up on Representative Staps line of questioning.
We, I'll say for our part, we, there was communication
with the departments on many of these re-appropriations
and we're going to have to figure out a way
to get more clear information from the administration.
There's no question.
Okay, so I have everyone's staff then, Allard?
And if there's someone I've missed beyond that let me know represent the staff all thank you coach
You're Justin through the chair to director and then commissioner. Thanks for being here. I'm always pleasure good fear banks people
Through the cheer so I I kind of want to know just for the public as soon as what happens if we have a contract and we basically
rub pull the money
like are we legally obligated for the contract like so we say to me it's like
okay we put out money we have a bid put an RFP this is a complicated long process
and then the contractor is like sure and we award the bid and
then we sail by the way we just stole the money for
the bit what happens to the chair commissioner yeah through the
chair representative stop yeah that that would be a breach of
contract i think it would set a dangerous you know a precedent
to be unsure that when we, you know, sign a contract
for obligation, that will the money be there?
You know and we work hard to make sure that our contracts
and what we've got out there is solid.
You have a good reputation across the board
for the state of Alaska.
So that's something that,
you you think hard about and want to,
want make to sure we're solid on.
I have a follow-up. Yes, follow up. Yeah, thank you. Thank you through the chair again to commissioner
I obviously I don't get in the nitty-gritty these I know you guys do great job at dot doing that
These contracts that I'm sure they have clauses in there were basically once we're locked to an agreement
We have to kind of pay anyways
I mean or I could just break them arbitrarily. I I think I dunno if
People in industry probably like it if we just started breaking contracts willy-nilly,
but I'm just curious if there's any penalties or anything like that for breaking the contracts
through the chair.
Commissioner.
Yeah.
Through the Chair, Representative Stapp.
Yeah, you know, once when a contract is, even when they're gearing up because they know
a contractor, maybe we haven't even awarded it yet, but, there is an intent to award out
We have a great contracting community in Alaska, they go out and they take a lot of risk ahead
of time when they're securing materials, long lead time items, you know, equipment has to
get mobilized.
You know it's tough in Alaskan to get these places.
So there's a fair amount of money on the line, the last thing we would want is to pull
the rug from out of them, from under them and once the contract's signed of course,
we have legal obligation.
To those to those payments, so yeah, and commissioner. That's why we've this committee has filed a supplemental bill
Frankly, you know, what last fall? That that's certainly an important point represent the stamp. Thank coach. You're just in through the chair
So last quick quick fall on that
You know I guess my biggest fear would be like if we start being in the kind of the
Behavioral process of putting on RPs in that fulfilling
Kind of obligations are pulling them after even we award a bid. Maybe we don't sign the contract
But we we're in that process of awarding like well
We'll just kind of undermine the faith in our general contractor industry in the state
But I do have an actual pertinent question about my Fairbanks Armane that caught fire two days ago
That's also on the veto list
For the upgraded maintenance if I could ask that really quickly through the chair
Obviously
The armory, we had money for the modernization for
the barracks, got fired two days ago, like, is this helpful?
I mean, do we do the modernization?
I don't know, I hope we didn't modernize it and then burn down,
I guess, through the chair.
Through the chair representative step that fire was brought to my attention this afternoon
I do expect that as with most fires when we experience a with state facilities
We would go through a process of ensuring that insurance covers the cost associated with that the modernization piece
clearly didn't move forward due to the veto so
But happy to follow up further if you'd like yes quick one
a quick follow-up on that follow up.
Yep, thank you.
Justin, to the chair.
Well, I guess there's a bright side to a veto then
because rather than spending the money on the modernization
of building cut fire before we spin it.
So, always looking at the bright sign.
Thank you, Coach.
I see representative Allard next to me.
Thank-you.
Thanks for being here.
You're not in the firing squad.
I appreciate everything you do in Eagle River, by the way.
My sidewalks are cleared and there is no like,
ruts on their roads, so they're appreciative.
And thank- you for addressing the ice dam
on Eagle river road.
I kind of wanted to do a little bit of a follow-up with thank you through the chair on what Stapp was saying so
Representative Stap
This body last year reallocated funds or reappropriated funds to go in different areas, and they pulled funds from
projects that were already underway and
I voted now just just on the record
So I guess my curiosity is are you saying that because that happened that it did impact?
When the governor decided to veto certain items to stop it with the reappropriation of these funds
Commissioner yeah through the chair representative allard
Yeah, and that that was part of you know as as we're moving forward and the
After the legislative action. Yeah. We had a lot of questions about you now
Where these projects were at what what was going on and how that would work?
So yeah, that's was a concern for us. Absolutely
May I do a quick follow-up course. Thank you
So, instead of us as a body looking down the road, there are consequences when we do certain actions.
And I guess what I'm hearing you say is that there were consequences to our actions of reappropriating the funds.
Yeah, through the chair, yeah, Representative Allard, yes, of course.
Okay, thank you, chair.
Representative Galvin.
Representative Bynum.
My question has been answered, I think.
Yeah, thank you, Coach, or Josephson.
I think my question is, in terms to the statement
about the long lead times necessary for contractors
to get up for the season, I'm thinking in particular about,
well, the lead time must be quite substantial,
even for an urban project.
But thinking about some of the work
that may take place in Western Alaska
are more remote parts of this state.
Start to get concerned about our con how much notice do contractors need ahead of time about the projects that are going to be going
to bid that summer
To be able to do work and in say Western Alaska
How long out is that planning period commission?
Yeah through the chair representative shruggy. Yeah, it can really vary depending on the type of work
You know if there's anything that that requires
Transportation of like steel products and those types of things that have to get fabricated
There's a whole another time frame that has to be factored in as well there a lot of times when you look at our rural aviation program for Western Alaska
When we get the grants and we go out to bid, let's say in August
September timeframe
You know, it'll be all winter and sometimes the next summer even just to get mobilized for the following fall and so it's it is a long
Yeah, and depending on where you're at
Thank you
Represent by them. Thank You coach your justice and through the chair. Thanks you for being here today. I appreciate it
you know we talk a lot about
readiness of the contractor workforce to do
construction for Alaska and provide
quality projects for us and I know that
here over the last several years historically we've seen very much volatility in the amount
of money that we have available for capital projects not just DOT match money because it
feels like that that's really all we been funding. Can you talk just briefly about
when we had volatility and available dollars and we're only trying to meet the minimum of match
and the availability of contractors that we're seeing in the state.
Commissioner.
Yeah, through the chair, Representative Biden, and thank you for that question because I remember us being here last year
and talking about this and that was the topic and there was concern from this committee about
DOT getting projects on the street.
And so we were really pushing to get those projects on the street, which resulted last
year.
We pushed our teams and we got a record $183.5 million in August for distribution.
We had over $1 billion capital program year by leveraging really every tool we had, including
the capital funds, and including our federal funds and just really making that a possibility.
We have a group of contractors in this state that are pretty phenomenal.
They tend to work in different areas and expertise like Western Alaska.
For example, we have a group of contractors that can work
in Western Alaskan.
We have group contractors
that are good at urban environment.
We a have groups of contractor that, you know,
kind of like working on the Dalton Highway up north,
which is a whole different animal.
And so, really, to keep that constant workloads
that they can keep their work going in those different
areas.
Is really important to us. We're we're working on our new statewide transportation improvement program, which will be
That'll be one of the topics here coming up soon
But that's part of when we are looking across the state
We got to make sure we maintain that balance of work as we you know look at how we allocate those federal funds
Which are so important right now
Commissioner to the contracts that you led to they remind the
recipient that they're subject to appropriation
Now, I understand there was an appropriation in this context, but I assume they say that.
Yeah, Chair Josephson.
We'll get back to you on that, and there's specific contract language in terms of reasons
for default and termination.
And so there may be a clause in there.
I would have to double check that we have very standard contract
language that was used.
Yeah.
Thank you. I have one for DOT and then a simple question for OMB, I think, so I'm going to ask it first, which is I love it when the barracks tell us, you know, it's the Fairbanks Barrick, but I got two,
I've got Camp Carol and Camp Denali. Will you remind me where those two are located so that I haven't accurately?
They're both on J-Bear?
Through the chair, Representative Hannon, thank you for letting me get a lifeline, J. Bear.
And that's, I guess, both on J.B.E.R. Okay.
Then I do want to ask follow-up.
Yes, follow up.
Commissioner, one of the vetoes was maintenance
Dalton Highway, mile post 76 to 89, 2.5 million.
So my question is, was any maintenance done on that stretch?
And will you remind us of The Mileage?
I don't think that is the big sluff.
Because I think that's at mile like 150 or 170 so it's closer to Fairbanks
And I guess I'm wondering
Very specific mile post called out. So I assume there was a specific
Project need and if this money was vetoed was that maintenance done with other revenues
Commission through the chair representative hannon
I mean you have miles the 70 mile is passed if you've been up on the Dalton past the u-con river bridges north of that
We have done a lot of work up there.
We're really leveraging right now
our preventative maintenance funds on the Dalton Highway.
And we actually have a pretty interesting thing
we're working on right
now as we get with Alaska Gas Line,
where Fedhighways is working with us,
where we might be able to just do a big
aggregate stockpiling program on a long-land
tire length of the Delta Highway
to really make sure we are ready for what comes next.
But yeah, we have work every year
on majority of highway.
I can find out for those specific mileposts, you know what what we had going on for this past summer
Follow up follow up. Thank you chair josison
And I guess I will just let you
know that I had the opportunity and did drive the Dalton highway this summer in a commercial rig and
the ongoing frustration of that driver was
that pile of gravel has been sitting there for five weeks and it's just sitting
there and why aren't they just fill in some potholes with it and my recollection it was
sort of in that stretch and I said I would always ask. So from the driver's seat
their thought was there it sits and now we're not going to do anything with
it. And it just will sink into the tundra on the abyss if we don't at least
And they were you know kept joking about maybe we should just jump out and spread it ourselves if do key can't spread
It in those potholes
I didn't want to advocate for that, but
Represented by them. Thank you. I just listen through the chair
I know we're gonna get another opportunity to have a long conversation
conversation about the upcoming budget and and the needs of the Department of Transportation some of concerns
I think that
I have and the committee might have with how we're making investment in the state through capital spend and
whether or not
utilizing fully utilizing federal match and
other dollars
to not just do new construction, but the the maintenance portion that I think is overlooked many times that can extend the life of contracts or
projects and also create a
Create continuity between projects. So there's some
I definitely have a lot of concern about that because I think that we are definitely underfunding
our capital programs. But specifically there was a question asked from the co-chair about
contracts and it made it sound like that you are issuing contracts without an appropriation in place
and is that actually something that's happening or is it I know that
appropriation to kind of put the word out there and then of course we put
the contracts out when we get the appropriations but is it general practice
that we would be doing a contract without appropriation in place? Commissioner?
Yeah, through the chair, President Biden. No, we always have the funds are always
in-place and they're backed by appropriations before we issue a
contract and typically that they call it they are encumbered so that there's no
competition for those funds as well.
So as a follow-up.
Yes, follow.
So maybe the opportunity where we wouldn't continue
a contract as if there was optional phases in the contract
that are pending appropriation.
That could potentially be the case in a contact
where you might put a contractor out for phase one work
with the option to extend or award
pending future appropriations, is that accurate?
Yeah, through the chair, Representative Bynum, there are situations, a Western Alaska is
an example where the Federal Aviation Administration, for example, will issue staged grants.
And so one year we'll get a grant for a certain scope of work and then they've given us that
assurance and we have a good relationship, it's not an appropriation,
Provided you know everything goes and normally as it normally does
You know we'll give you the second phase the following year
So we will structure our contracts and well structure them. So there is a a way out if for some reason it didn't
Anyone else
Representative stamp
Yeah, I think coder just and through the chair to
Commissioner and then mr. Saunders after that I guess
So just regarding the Dalton Highway, I mean I don't know if maybe it's like
what who your favorite child type of question is. To me the D Dalton
Highway is like probably the most important transportation corridor we
have in Alaska because it is kind of the vitals. It's the heartbeat of our
industry. And I'm curious if you would I
mean maybe you got to put some nuance on that statement through the chair but
I am curious how you as commissioners see that through
Commissioner yeah through the chair representative stout. Yeah, thanks for that question
I too have been up the Dalton highway and the 10,000 gallon fuel tanker that was full. I did that ride
That's uh, yeah, it's it a challenging environment
What a lot of people don't remember is it 500 miles from Fairbanks to Prudo Bay and and we know how to fix it
I mean if you look if he could drive the last 30 40 miles up into Prudhoe Bay
It's probably the most beautiful paved road, you know, if I've been on, I'm just it. It is amazing, but
But we had to, that took a lot of investment to over $100 million to get there.
We have this plan over the past 10 years, I think we're over 500 million in what we've
invested in the Dalton.
We're at 500,000,00 million and what were planning with our current, what
we think our statewide transportation improvement program can afford.
over the next 10 years and so really it's you know it is a limited resource we keep investing
on the capital side we absolutely love to have state funds and years ago there were some pretty
big state appropriations and our post did some amazing things up there because you can move
And so you'll see, you know, we're trying to work ways with the Federal Highway Administration
to see if we can get some more flexibility to do more of those types of things.
But really it's just that limited resource and we are balancing it across the state as
the challenge there.
But I agree that Dalton Highway is absolutely important for the State of Alaska.
Yeah, fault Mr. Crochman.
Yeah.
Yep.
Thank Coach for adjusting through the chair too.
And this is going to go to Ms. Saunders this time.
Very good nuance, by the way.
Of course, every transportation system
is important in the state.
Living in an interior, I have a certain love
for the Dalton Highway, obviously.
I'm curious.
Director, your sense is on the consistency of fund sources.
So when I look through some of these veto summaries,
it kind of strikes me as things that this body decided
to appropriate with general funds as opposed to fund
through sort of some sort
of re-appropriation kind
of mechanism.
I, in this case, the veto was because the fund source was
basically eight of funds that were reappropriated for the purpose
of something as critical as the Dalton Highway as
opposed
window replacements and Mount Edge come or something like that.
So in your role as OMB Director,
what is a more consistent fund source?
So if we're going to prioritize what we value as a legislative body,
I mean, would that be general fund dollars or that
be re-appropriations through some sort of state-owned enterprise through the chair?
Director.
Through the Chair, Representative Stapp,
it's a hard question to answer as,
As our fiscal situation has continued to decline,
you can ask any commissioner that I work with
or admin services director.
I frequently am asking, are there projects on the casa
that we could potentially re-appropriate
for another purpose?
We should be evaluating those.
There's a lot of
items on that list, there are a lot of old items
on the list but we want to be very thoughtful
about what we're saying is no longer a priority
in the state and what should be a
priority of the states.
So I don't think that there is any opposition
to re-appropriations, it's
ensuring that there's actual revenue
behind that reappropriation before we put it forward,
that I think is more important.
We don't want to put a re-appropriating forward
that has zero dollars,
then we're not getting the benefit
of being able to utilize that revenue
towards the new item that we are talking about.
When it comes to funding sources,
gosh, I the last time I looked at the list,
there was over
between 350 and 450 different different unique funding codes that we have in the state and that
We utilize all with specific purposes
Some of those are you know constitutionally required some of
Those are statutorily require designated because the legislature has determined that that should be an important use
I don't think that there is a right or a wrong one. I think it's important to
evaluate them on a case-by-case basis I have seen
For example, appropriations made from the Higher Education
Investment Fund for certain purposes
that are outside of the Statutorily Designated Program.
And maybe that is a good reason for that year
to meet that purpose.
So I don't want to say there's a right or a wrong.
I want us, I do think that we should evaluate each appropriation
to ensure that it's, you know,
prioritizing the need and and not to say that the the Dalton Highway in this case that you're talking about
Online 21 is not important. We recognize the importance for those particular items
The the decision was that we're not going to use a to reserves for purposes outside
What has been statutorily designated? Yeah, and that's follow up on this mr.
Coach last follow-up. Yep, think coach here through the chairman centers. Yeah. No, I I kind of
Completely understand and really really for me and obviously this isn't a your prerogative
This is more legislative pregative
But it's just interesting to see how we would take something as vital as the
Dalton highway and use re-approped funds for that, but we wouldn't fund on for example on line 17 the National Historic Preservation Fund with
$1.3 million in general funds you think that we could take
Something as important as adult and used general fronts for them and then reapprope
Use reappropriations to fund the historic preservation fund
But that was the purpose behind the question
about the veracity and the reliability,
rather, of fun sources, thanks.
Roughs and more, I've been remiss.
You would ask for a question.
Yeah, no.
Thank you, George and Susan.
Thank You, Commissioner Anderson, for being here.
We had a really robust construction season in the Valley
this year, and your team was wonderful working
through lots of obstacles and questions from constituents.
So I appreciate Mr. Mills a lot.
Alaska's construction is limited in scope and fragile.
And so maybe for the public that's listening,
contracts in appropriation and different things.
And maybe you can just kind of walk us through the impact
of these funds being vetoed, what that looks like for us,
and how important it is to capture these fund again.
Commissioner.
Yeah, through The Chair, I representative Moore.
Yeah.
I mean, everyone recognizes the value of Alaska's construction
season in the summer.
I think last year, we were over, man,
I want to say 1.3 billion.
you know, and what we were working to secure and we did get secured.
And that's really projects. Yeah, it's the Matt Sioux Valley,
it is Fairbanks, its Anchorage, the parks highway,
it the Stirling highway and the Dalton highway.
It's just across the, I mean, there's so much,
and driving the highways in the summer is always kind of a bummer
because of the construction delays.
But that work, that is project,
that keeps our infrastructure in good shape.
That's what it takes.
It keeps the contracting community healthy.
keeps everyone, you know, it keeps everything going.
You know we, for Alaska, we have a lot to be proud of
with our infrastructure and our highway and the airport system
on the highway side.
You we meet all of our pavement and bridge
federal performance measures and we
have some really,
you have good team of in-house and contract engineers out there
that are working on these bridges,
making sure that our bridges out
there are up to snuff and.
And there's times when, you know, we recognize there are some challenges, and man,
we can move on things to fix things quickly too.
So really, it's just, the project delivery world, when you're working through it,
it is not a one-year type endeavor.
You know it really some projects will take five to seven years to get through the process.
And so you don't want to disrupt the funding flow.
Because when when the funding starts changing engineers stop work they go start working on something else and that's lost time
It's last money. It was a lost opportunity to improve our infrastructure
So really that that is the piece that we're always looking out for just having that stability
So what's there we can expect we get those projects across the finish line that
We've been working and just keep Alaska moving which is our our mission
Thank you follow-up for this questions for miss Saunders
Maybe you can explain a little bit or maybe have some intel on what the fiscal rationale was from the administration with
With
Be towing these funds
Through the chair representative more so the the conversation surrounding the specific statewide transportation
improvement
plan program program. Really had to do with whether the funds were obligated and and we had
something in place that made like I was talking just a moment ago about reappropriations that
Monday no longer being available and leaving a hole in our funding to match the federal program so
working through what those items were that were going to be re-appropriated and determining
whether they were already obligated or had a contract in place, the decision was to not
reappropriate those to the program to come back and ask for the general funds directly
to meet that state match so that those projects could continue and we could get more projects
out on the street.
That's unfortunate.
Thank you.
Shruggi and Pineham.
Thank you, Chair Josephson.
And I apologize when I'm going to return to the Dalton Road,
because sitting in a truck cab for 14 hours with a driver
who'd been driving it for more than 40 years,
and I will tell you you used the magic words,
and told them as soon as it ever came up, I would ask,
paving sections of the Daltan Road from the driver's
perspective, and when we hit that intact
last 30 miles he said this will last two or three years and why do they keep
paving sections that we're gonna have to redo why don't we just keep it gravel
and since you mentioned that last thirty miles of paving that's all intact right
now from the driver's perspective that won't last long because of this
The conditions of the Arctic Road building, so why are we paving instead of just graveling and black-topping?
Commission
Through the chair representative hannon. Yeah, we put that pavement in place
I think it was it
Was it's a result of a 2015 when the road washed out and the floods so it has probably it been there since 2017
So that we've got eight years
on that so that's pretty good I mean typically for an Arctic pavement just
itself you know we'll get 15 if we get fifteen to 20 years we're doing really
good but 15 years there's a lot of maintenance savings and when we look at
our operating budgets I don't know if people know this but when you're driving
the Dalton highway in the summer there is a
lot a dust that dust is is our finds from our road surface we can lose anywhere
from a quarter to three quarters of an inch of our roads surface a year just in
And so by having that you know paved surface that reduces the amount of additional these these piles of gravel
We need for the surfacing and everything it reduces out immensely it saves us a lot of funds
And it we have a minimal staff right when on the Dalton highway we
Maintenance camps about every 30 40 miles and there's there're so many people there that can cover so much ground
And So the maintenance that your you can do when you when?
You can pave a big section they get to go work on those more challenging gravel sections that we don't always get too so
That's really, if we could pave more, we would.
There are some areas where the amount of money it would take,
because we'd have to raise the embankments and insulate
and do all these things.
It would be hundreds of millions of dollar projects
to make it stable.
So we haven't done a lot of sections like that.
But I don't have the stats, but I think it's about 40%
of the Dalton's paved now.
There was a big push back in the early 2000s when I started at DOT to pave the whole Dalton highway and that got so far.
So that's still something.
We aren't actively looking to pave the hole Dalton Highway right now because we're cognizant and we do listen to the truckers.
And so there's areas where we would like to do more and then there are areas that we wouldn't.
Returning to the vetoes. I think you've represented more for bringing them up
You know, we've talked about a number of things in the context of this conversation the long lead times for
the construction industry
and also the certainty needed to be able to
Plan for a construction season.
I know we have given certainty to The Cascade point
Project to some degree through the actions of the administration over the summer
I'd like to take a moment though to look forward, obviously,
by taking that action, we've now jeopardized hundreds of millions
of dollars in federal match necessary
for this upcoming construction season.
And given the very long lead times for construction this year,
or just in general, and now the uncertainty that exists
around this summer construction
When do we need those general funds to be put forward to provide the contractors looking to carry out this work this summer?
The certainty they need to actually be able to plan in a fiscally responsible manner for the work that we all would hope for them to do.
Can you give me some expectation as to when we might need
those General funds available to provides those businesses certainty?
Commissioner.
Yeah, we've been, you know, when this occurred, I mean we had a hard look at you
know what our available match was at the time. The additional is that's over 30
million that was you still there. We had some carryover from the prior year. So
we have it on slide. I'm not sure what number that slide five, which really kind of lays out.
One thing that is going on, and this was the statewide transportation improvement program,
When we were doing amendment two, and I think this was the time, you know, when everyone
was talking about we got to get the projects out, we've got get to the project out.
We had a plan in amendment 2 that we went out to public notice that was what we thought
we would have for the full amount of match.
Then after we had actually not finalized that stip amendment to when the re-appropriations
happened and the governor vetoed.
So when we win finalized a amendment, to what had to reflect was, the amount available
So right now, if you were to go look at finalized
approves to amendment two, that's our plan for this year.
Right now what we're saying is we have the bigger plan
with the additional match, but when we look
at our project delivery schedules,
and there's about 800 to 850 million dollars worth of.
Projects and obligations or authorizations, I guess I would say
Because we do more than just it's more the just construction projects. There's programs there's utilities
There are lots of different elements to a project delivery
But we have the match to get through July 1 with our healthy construction season
It's after July one that that additional that we'd be missing out on so we're really right now focused on that
We're not slowing down
People, as they're delivering projects,
we're telling all our staff, you know,
you just keep going and as
they come available, we are going to be advertising them.
So, the disruption would occur after July 1.
Commissioner, what I'm wrestling with is,
we'll hear different testimony tomorrow.
So that's what I'm wrestling with and and it's hard for me to know what's accurate represent Bynum
Coach here, Josephson
If we go to slide six really quick through the chair
Cascade point timeline funding considerations would be remiss if I did not bring up cascade point specifically the last marine highway and how these two things might be linked
On this slide, we really talk about stage one when this happen as far as putting the
appropriation to use to build this section of road, as you can imagine being from Southeast
and specifically from Ketchikan, District 1, I did receive a lot of feedback from my community
about this.
how this particular plan is going to link
into the long-term range of what's happening right now
with the Marine Highway.
We've had lots of conversations
with Marine highway operating board,
talking about long range vision,
construction of new mainliners,
reconnection, or would like to have some conversations
about it, Southern reconnections,
specifically the study that's been put forward
connection to HIDR, but reestablishing also our connection
to a Prince Rupert.
So this is a big obligation, and I think there's maybe a bit
of a misunderstanding about how this actually plays
into a bigger scheme or the bigger vision
about what we want for the Marine Highway.
I was hoping that you might be able to talk a little bit
about not only this specific decision
But then following on stages or set phases of how this is actually going to fit into the long-range
plan for
Where we currently sit looking at the Marine Highway
Commissioner yeah through the chair representative by them. Yeah, I mean the with the
Last Marine highway system the Long Range plan that was recently
finished
Which which is a good plan
That one of the elements of it was in the recognition that
You know, to reduce operating costs, long-term, extending roads, shortening ferry runs is part
of that plan.
And that's written into the plan that was approved.
So Cascade Point really is that.
We're making the most of the road infrastructure to produce the length of runs in Northland
Canal, and that is, you know to reduced the time and to release the cost to run in the
ferries.
Follow-up represent absolutely appreciate that understand that obviously we know that we've had some major issues with
operating our current fleet
Keeping boats in the water and keeping a move in and so I think that there's a bit of a disconnect with
with
my community
Understanding where we're actually going with this and how these dollars may or may not be directly impacting keeping vessels underway
Yes, I understand we want to make a deploy for a long-term plan, but I'm just really
trying to understand how this specific piece of work is going to play into that and how
it is different than the monies that we are actually using for the Marine Highway Services
itself.
Because I know, you know I think people forget that this is part of highway money with highway
Keeping a vessel on the water and going to a port and that's what I was hoping you could clarify for me
For the comment
Yeah through the chair I represent a vitamin absolutely and we could sure provide the committee with the list of the different funding types
That we leveraged for the last marine highway system, you know
We've done more and more with all of our funding
Types just to make sure that you no we're we keeping it the ferry system running and and in good repairs
So there's a good story there
I think, you know, our director, Craig Tornga, has just done an amazing job on the maintenance
side with an 98.5% uptime for 2024 and 2025 for the ships that we have.
We've really been investing in the overhauls.
Some of our ferry overhaul's are going longer, but that's because we're doing more and just
as we tackle this idea of new mainliners and really replacing these old vessels one at a time.
And just, you know, we advertised for construction the Testimina replacement
vessel just on Friday. That's going to be a $300 plus million investment for the state of Alaska
that absolutely, I mean, the testee's over 60 years old. I went to the 60th birthday party,
that's absolutely needed. So we've got some good momentum right now and doing some
Go ahead, Representative Biden.
Thank you, Co-Chair Josephson, through the chair.
I just would hope that as we move forward
through this session here,
that when we talk about the stages of work
that's necessary and specifically
how it relates to Cascade Point,
if the department could, you know,
incorporate that into the presentations
we're going to be seeing as move
forward, that would be very helpful.
Co Chair Schrein.
Thank you, Coach or Josephson, and through the chair.
Sorry to come back to this.
I'm trying to determine if you actually
answered my last question, then I don't mean that
with any insult.
So I asked about when the general funds would
need to be provided as matched to reclaim the, what's
the exact dollar figure?
It's near 600 million in federal funds that's jeopardized.
Is that right?
Can you give me a finer point on the number?
How much is at stake?
Commissioner Anderson?
Commissioner yeah through the chair of President of Shoggy
It's it's maybe I'll defer to director Penone because you know we have varying match rates
So it s not as easy as a say in 10%
Maybe director pro director penone. Can you give me a finer number there?
And through the chair representative Schraghi, so on slide 5 what we're talking about is
Projects so when we our project our match we are projecting
federal funds at varying rates and then our advanced construction and August redistribution
So beyond belong beyond July 1 we were looking to
Capture 400 to 500 million in projects
Plus, ensure that we capture a reasonable August redistribution as well, beyond July 1.
Okay, so, Coach of Justice.
Yes, follow up.
Thank you.
Through the chair.
So 400 to 500 million in jeopardy.
And I asked when the funds would be needed in order to ensure
that, we do not lose out on those federal funds and I heard, well we're good through July one.
Be missing out on opportunities, but that's the date at which construction would start is that right?
When did the funds actually need to be provided for a construction companies to able to?
Be to ramp up to hire to order materials to being able actually
deploy projects on the ground in Alaska post-July 1 when do they need that funding?
Commissioner yeah through the chair of President Shraghi. Yeah, I can understand the confusion there. So
When we secure funds, you know, so what happens is we go through this project,
deliver, we develop the plans, the environmental documents, all of this work,
the utilities, right of way secured,
all this works gets completed and then we, what we have to do was what's called
certify the project.
Once that project is certified, then,
we can send it to the Federal Highway Administration to secure the funds.
The federal funds and that would also be the time when we would,
you now, lock in that match.
So that's, that can happen, I mean that is happening now.
It will happen over the next, and it actually happens all the way through to the end of
the fiscal year, the End of September.
So it's just this continuous process and continuing timeline that we go through.
And yes, if some of these things after July 1, you know, we're certifying after
July one, then some projects may not get advertised for construction, because we don't
And so that might be in October November and then those projects will be for the fiscal year
Yeah, the next year 27 for a construction year
I'd coach your justice and follow up, please follow. Yeah. Thank you through the chair. I mean this is just
Bringing up more questions for me frankly, so do you need the funding in hand to certify the project?
Through the Chair Representative Schraghi
To cert we certify. The project
Then we asked the federal government for authorization for the funds to build the project
So for that follow-up for 400 to 500 million. It's at jeopardy those projects are those all certified currently
Through the chair represent froggy. No, and what would what?
Would be required to certify those Projects so that they can go out to bid. Yeah through the Chair represent a froggie
Yeah, that's where you know
The design, the stamps, plans, specifications, estimates have to be completed.
The environmental documents, if we had any land acquisitions, they have
to secured.
Any utility agreements have be secured, and so that's all these things.
There's a group of projects right now that are going through that process.
Okay, follow up.
Sorry.
No.
Not a commissioner.
Thank you.
follow-up through the chair. Thank you. So we are going through
the certification process. That's the only thing holding us
up. You don't need more money. Once you finish your internal
process, certify the projects. We'll go out to bid and we'll be
able to take advantage of that $400 to $500 million in federal
funds. Is that what I'm hearing? Through the Chair, Representative
Shraghi. Along with that is our federal fiscal year and our
Our goal always is to make the most of the federal authorities that are given to us the Federal Funds
What to do that you know that that we only get a certain amount as we go through the year of of authority to to
make those
obligations, so I guess as
We get through The Year and and we're obligating these projects that become ready our
projections right now and how we look at this is we have a tentative advertised schedule you can go online and you
the projects, and when we're anticipating they're going to be delivered for construction,
that's, you know, it's before then that we would certify them and then advertise them
and secure the funds.
So the answer is, well, between now and July 1, with what we are seeing that is going
After July 1 is when we believe that most of the match will be used up
Representative
And then representative Galman. Yeah, thank you co-chair Justin that through the chair to commissioner
I'm gonna I want to pick up where he left off co chair Shraghi. I think commissioner
so
I think we all want you to get as many projects out to bit as possible, okay?
And when I'm trying I want to try to break this down really creole style
We want a no if you need more money now to
Get as mini projects up as Possible to contractors
Yes, or no through the chair
Commission through The chair representative staff and with based on our projections the match that we currently have
We'll allow the projects to be bid and, you know, uninterrupted through July 1.
After July one, we wouldn't have the match to continue the program,
which, that would be that slug of projects from July to end of September.
Follow-up.
Thank you.
Thank your chair.
So, I'm hearing you say based on what we are projecting now,
Are we projecting less projects going out to bid this year than the previous year through the chair?
Commissioner
Through the Chair
Representative staff there's there is a couple
Well
We're predicting right now. It would be a very similar to last year if you look at because we also you know last
Year after the direction that we received from you in a legislature and a lot of folks
We leveraged what's called the advanced construction tool, which is where
We can authorize projects now, and then we can pay them in the future.
We convert those funds in future, but so we had a big year last year.
We weren't intending to do that again this year,
but we won't have the match right now to that full program.
Last fall, Mr. Co-Chair.
Yes.
Last follow-up represent the staff.
Thank you, Chair Drowson, through the Chair's Commissioner.
As the Commissioner of DOT, would you like to know that you had the money on hand sooner or rather?
Later through the chair
Commissioner to the Chair or Senate staff
We always like to have the out assurance when we talked about the certainty
I mean, but you know when when We submitted for the supplemental, you Know our when When we looked at our projections
And our targets on the project delivery side of things, You know
Going through July 1 with our existing match
We do not believe we'll see a disruption in projects that delivery
Okay, for Representative Galvin.
Thank you, co-chair, Joseph Sensory, the chair.
The job and the work that you have, Commissioner, is it's hard to even get my head wrapped
around.
Thank for all of the works you're doing.
And I'm now referring to slide five, and I don't sit on the Department of Transportation,
so some of these questions may seem naive, but I think they're very important.
to my constituents, and they're very important to the state of Alaska.
So I appreciate that now there seems to be some funds that do you have to help with some match available?
And in my district, for whatever reason,
some of the projects that my constituency thought were going to happen are now pulled off the table.
And I'm in Midtown Anchorage, just to give you that reference.
Remember, 40% of Alaska's population is there.
And, I am all in for making sure that the Dalton Highway is working,
for make sure the fairies are working and everything else.
And I think it's important that we pay attention to when I went to a few half day meetings.
Thank you to the department and to AMATS and the Anchorage work that's happening.
I appreciate all of these gatherings of people to say, what can we do better in Anchorage?
And the biggest concern right now has been around high volume,
intensity accident areas, whether it's with pedestrians or not.
And there are some very clear projects that were taken off the table around traffic calming.
And I believe that it was a matter of maybe around $30 million.
I see that there's 31.9 million, so I just want to bring this up because it's important to my constituents.
They've made resolutions year after year asking for us to do better and
particularly important for you to note is that it has been state roads that have had the most accidents.
And when I say the most accidents, I don't say this lightly.
We have had approximately 17 pedestrians die in Anchorage.
More than in most other cities, if you compare per capita in terms of the population.
So we are truly in the red zone.
And in my district, we're in The Redist of The red Zone.
So I think it's important that I bring this up.
And hear from you what I intend and hope to meet with you while you're in town
To learn more about what? I can do for our constituents and for the city of Anchorage to feel as though
We're doing the best of the Best especially for state roads there
And I think it's important for me to note that we have lost a 30-year-old this year
This last year, 30-year-old Sandra Blix, 33- year- old Frances Kentungan, 53-
year old Evan Larson, 79- years-olds Gladys Graf, 34-years-
old Donna Nielsen,
34 year olds Lorraine Williams, 65-
33-year-old Erin Cleveland, 85- year- old Clara Mattis,
46-years-olds Jason Felder.
Those are only the pedestrians that I'm listing.
Half of those were in my district.
I am asking you as I hear about all this extra money that we somehow have to fill the match.
And I think that's very important that, we do.
I also am, asking, what is going on?
With what I know my constituents have asked for these are calming measures
I don't think they're exuberantly new things. They're things like lights things, like
putting
Trees in the right space things? Like that. So I am asking you
in this conversation
What should we be doing differently to make sure that Anchorage isn't dropping off?
Yeah, through the chair, Representative Galvin, yeah, any death on our highway system within
our corridors is tragic, there's no doubt, and that's absolutely something that we pay
very close attention to, we want to make safety work in Anchorage as well.
The $30 million that is referenced, it's called Highway Safety Improvement Program
that when it initially came to me, it was one of these project delivery statements where our
teams were saying we can't, and this was angry gamble, we cannot deliver angry gambling this year.
We recognized, you know, the fair amount of legislators wrote a letter.
We recognize that, okay, well, let's see what's possible here. We met with the mayor of Anchorage
to really understand, what they were at. And we did come up with a plan.
We re-initiated the $30 million we revised the plan we put the money back in
We've talked to our teams about some different ways that we can just resource that project and and get that thing across the finish line this year
So we are working through that
Represent Galvin follow up. Thank you through the chair
Commissioner Anderson, thank you. I understand that you did restore around 30 of the 77 million that it was originally
headed toward
Anchorage
my district I think got one of them many projects and
There were many more in my District
I Think A Street was the only one and I'm not sure if even you're patching up the part near northern lights or Benson or Minnesota
But those were where most so the reason I bring this up
is that I was told in my driveabout,
I spent a half day driving with DOT,
that you all pay a lot of attention to your data.
And you, I,
I wasn't given a list of where most of the accidents high,
I think the way that was termed as some high cost accident,
so lots of damage to people and lots
of damaged to cars and things.
So I would shown the list,
On that list were in my my district and yet I believe maybe one project was restored and maybe there's a reason behind that
I look forward to more conversations
But what's more important to me is that I think half of the funds got dropped back in and I'm very grateful
That you worked with the mayor to make that happen
And I'm asking for more.
If we're looking at a billion dollars roughly, then I hope that we will continue to strive for
following the data, which I believe we are professing to do.
And, I encourage that if you do that, include our districts data.
Because I already listed the names, but it's way more than that.
Every one of those people have a mother, many have children.
And not all of them were from Anchorage, some of
them from rural Alaska, I appreciate that, but we can do better.
We can do better for our community and this is upon our department.
AMAT, all of you working together and I will be there also holding hands with you
to encourage all us to note that Department of Transportation is about making sure
that our economic engine, our driver is working still and it's also about
making that sure that we are all safe. Thank you.
Thank you coach or Joseph Sin and appreciate all the opportunities to ask questions.
Thank You all for being here. I really appreciate it. Sorry to spend so much time on this.
I just have a lot of constituents that are concerned.
I've got this Meet the Match letter.
I never quite seen a coalition quite like that and I'm just trying to really drill down.
On some basic facts for myself. Sorry if I'm a little repetitive or you've already answered the question
But it's better for me to make myself look silly and just be really certain about the answers
So my question is
You say you have the match through July 1 are there projects that would not go to construction this summer if
The additional match that was vetoed is not provided by July one
I would say it's possible depending on, you know, how quickly our folks can deliver projects.
There's always that.
Our current projections are that we're going to be okay.
There is one factor in here with our August redistribution.
Our plans, and that's not one of our timelines, but our plans are due in, I think it is May
when we have to have our entire plan for what we're capable of securing in terms of federal funds.
Of course, last year, that was $183.5 million, which that
was a record that we ever thought was possible.
Initial estimates this year are about $66 million from federal highways,
but we'll be asking for quite a bit more than that.
So there are some variables in there, for sure.
From my perspective, you seem very calm about it. I mean it it as long as we get the money by July no problem
I don't sense a lot of worry from you
I'm trying to just reconcile that with this meet the match letter I've gotten where there's in my view an unprecedented coalition of
businesses and
They've come together and that seemed really
Very concerned about us being able to provide the match to secure these federal funds
Why why the concern and uncertainty from industry when I?
Gather that everything's just fine from from what we've heard today
Can you can you help me reconcile that at all or do I just need to wait till tomorrow to hear from Industry?
Commissioner yeah through the chair representative Schraghi. Yeah, no, I mean they have to be worried though. This is this is their
their life earnings, you know, this is how they make their living.
So that understood on that front, absolutely,
that the certainty piece is important, and I will say,
you now having that match in place provides the
certainty for the fiscal year.
If we weren't to get the additional match that was asked
for in the supplemental July 1, there will be projects
that don't go on the street.
If the match is available early, that adds more certainty.
We don't object to that.
That's for sure at DOT, but, you know,
we put in a supplemental request,
you now based on what we saw with our projections.
Thank you.
That was good for today.
Representative Allard.
Thank You.
I'm going to circle back around to what the representative
from Anchorage said in regards to Minnesota
and I think northern lights.
In regards to the incidents that have been happening through the chair, that
have had been happen in Anchorage, I'm kind of getting a little bit annoyed that
it's constantly falling that DOT is the problem.
We have a leadership problem in the MOA, and when the assembly votes to remove crosswalks,
and just allow people to cross wherever they want to, cross, it is going to wreak havoc.
On the state roads and also on the municipality roads.
I was in a brief when I heard a sitting legislator say that you as DOT will have blood on your hands and that is your responsibility and your to blame, which was just atrocious.
I have a road that's artillery road.
That's right there, it's an interchange coming off of Eagle River and I've been fighting for this for.
The amount of time I've been in office is eight years.
It's been going on for 15 years, we had money designated for it eight million.
It has been siphoned all the way down.
It was going to be a $22 million project.
It is now up to $55 million and nowhere in the MOA are the municipality of Anchorage cares
about that particular road because it's an equal river.
Question to you is even if you fix those roads and or how they're requesting they be changed or altered
Can you even guarantee that these are actually going to solve?
The deaths that should never have happened because I don't think people are recognizing the individuals that are hitting these
People that have died are also traumatized.
My daughter was one car back witnessed it,
was totally devastated.
And I'm just trying to figure out if the road,
the improvement that the DOT is going to do
is gonna say, okay, it's fixed.
Nobody should die anymore.
Because I am leaning more, this is a leadership issue.
When we change laws that actually hurt those individuals
to the point where they're dying.
Comment?
Yeah, through the chair, represent Ballard.
Yeah, the safety piece, you know, it can't just be engineering.
It can just just projects.
There's the enforcement aspects and we all know that enforcement matters.
We've seen DOT going out and doing the emergency,
the EMS, providing the jaws of life so we can have faster response times.
There's the education piece, we put a lot of money into getting out their reflective gear,
educating people, how it's safe out there in the highway. So yeah, absolutely. It's not just
projects. There are a lotta factors that go into it and it takes everybody. Yeah, DOT alone can't
solve this problem. Representative Tomaszewski. Thank you, Coach Anderson, through the chair,
and I'm just gonna continue with the same topic. Incredibly devastating when any life is lost.
in and especially so tragically and unnecessarily and and DOT relies on a
lot of data and I don't know I, don' expect you to have this data but I
know the assembly and Anchorage decriminalized J walking in 2023 and
I just wonder if that has anything to do with the number of deaths that occur
in just the middle of the road Anchorage anywhere and i don t expect
just for the representative to my left information,
maybe that is somewhere to start
and look at data and gathering and see
if that maybe was a mistake by the municipality to do that.
So, that's all I have.
Thank you.
Representative Bynum.
Thank You, co-chair Josephson.
I just wanted to also say appreciate you have an industry
come tomorrow to speak with us
and share some of the concerns that they might have
or excitement about the opportunities that lie ahead.
Commissioner Anderson I was hoping and through the chair. I
Was hoping that maybe you would give us some level of commitment that she would
Take some time to to pay attention to that the hearings tomorrow
For finance and that when you come back that you might be ready to have some levels of response
at the time you came back and or
Before you coming back to help us gauge what we're going to hear tomorrow, and then maybe
a little bit of follow-up information from you guys.
Would you be committed to doing that follow up for us?
Yeah, through the chair.
Representative Bynum, yeah, absolutely.
Thank you.
Representative Stamp, the final question.
Thank You, Coach, your Joseph,
through to the Chair very quickly on the topic
of safety since we just kind of on it.
So we had this new overpass over the Richardson Highway
by my house.
It goes over to train tracks.
And I've never seen a bunch of cars flipped over in the ditch.
Until you guys built the overpass, I know we built
the Overpass because we like safety, but the train
came like once a day at two in the morning, and now I see
cars flipped over all the time coming off the
OverPass.
So is there any way maybe you can give me like the
methodology we use for like, safety?
Because I can't prove it because I have no data,
but empirically it would seem that the
Over Pass is way more dangerous than the
train tracks ever were through the chair.
Through the chair representative Josephson. Yeah, I don't yeah, not having the data
I mean typically overpasses are to reduce conflicts with you know railroad
I'm mean we do we have a big effort right now like on the parks highway to get all grade separations
For all those railroad tracks across the board just because there's a conflict there. That's pretty serious one
So I think that's the the method we take but we can get back to you if we haven't a date on that
Want to thank the three of you
Director Sanders, Commissioner Anderson, and Director Panone for your presentation.
I know a lot of work went into this PowerPoint, I encourage the committee to look at it.
It's mostly historical document at this point since we've got a match to worry about or fund.
But it's their sort of history of describing how those funds came to the point where they are.
Our next House Finance Committee meeting is scheduled for tomorrow, January 27th at 1.30 p.m.
At that meeting we'll introduce and have our first hearing on House Bill 283 entitled Appropriations Supplemental.
Then we will hear from the Legislative Finance Division as it presents its overview of the Governor's FY27 budget.
With that I'm going to adjourn this meeting at 3.22 on the 26th.
Thank you.