News
Citing the importance of establishing new infrastructure and connecting rural Alaska to the urban core of Anchorage, the body that authorizes transportation projects for the municipality voted 3-2 to keep the Knik Arm Crossing on its list of short-term projects.
This decision comes despite a 6-5 advisory vote from the Anchorage Assembly in favor of moving the project back into the municipality's long-term list of transportation projects, which would delay construction of the bridge until 2018 or later.
Assemblywoman Sheila Selkregg, who voted against expediting the project, launched a volley of questions at bridge supporters during a recent hearing, noting uncertainties regarding the project's funding and sustainability.
She mentioned a hypothetical model in which the bridge is expected to raise nearly $8.8 million annually in toll revenue. She is concerned the project won't break even until the bridge's $650 million to $700 million cost is paid off.
Annual payments would amount to $44 million, of which only a percentage is covered by toll revenue.
Kevin Hemenway, chief financial officer of the Knik Arm Bridge and Toll Authority, said that this figure is off base, instead saying that 90 percent of the project will be covered by toll revenue.
Mary Ann Pease, a liaison to the state authority pursuing the project, said this covers one of several hypothetical models that may be adopted as the project moves forward.
Detractors of the project expressed concern that the state may end up funding the project by taking money from the permanent fund dividend or the constitutional budget reserve accounts, as private industry investment may not pan out as the state hopes it will.
The state is considering using a $261 million federal transportation bond, for example, to cover costs not handled by the toll. She resents the implications that the state would dip into the permanent fund dividend to pay off the debt, a solution she said the state would not even consider.
Since toll revenue may not cover the cost, fears lingered among many of the detractors present that the state would shoulder the portion of the burden intended for private-sector investors.
Most of the citizens and advocates who testified at the meeting were against the project despite the fact that the majority of voters on the Anchorage Metropolitan Area Transportation Solutions board voted for it.
Selkregg said later that any state funds used to pay for the project would be better spent elsewhere, where the benefits are less nebulous and the rewards are assured.
"We could have the best universities in the country," Selkregg said in a phone interview after the meeting. "We could do many, many things if we're going to start talking about dipping into the permanent fund or the reserve."
"It's projects like this that will lead us out of the recession," said Anchorage Mayor Dan Sullivan, who voted to expedite the project. Sullivan said the community would be unlikely to look back on it with regret if constructed.
Sullivan said it would stimulate the economy and bring jobs to the state in a time of great economic need. He said funding infrastructure projects is a great way to stimulate a faltering economy.
Those who testified in favor of moving the bridge to the short-term plan argued that the nearly $50 million spent in economic and environmental studies should not be allowed to go to waste.
"That'll be approximately $50 million that we'll be putting into the dustbin," said Jeffrey Ottesen, director of program development for the state Department of Transportation.
"Just because we spent a lot of money doesn't mean we should continue to use a lot more money when there are so many better uses for it," said Lois Epstein, director of the Alaska Transportation Priorities Project, an alliance of industry leaders interested in swaying the prioritization of transportation projects.
The Knik Arm Bridge and Toll Authority, an organization created by the state Legislature in 2003 specifically to pursue construction of the bridge, estimated in its latest financial report that the project would create 5,000 new construction jobs over three years.
Pease said this figure accounts not only for workers constructing the bridge, but also for gravel mining and transportation, as well as quality control and ancillary services.
The report also estimated that more than 14,000 new jobs would be created in 2030, a number that takes into account jobs created specifically to provide labor on the bridge and jobs created in related industries as a result of the construction companies and their employees purchasing goods and services. Without considering these indirect jobs, the bridge is said to create more than 8,000 jobs in 2030.
Selkregg said she believes many of the figures authority the presented are inflated and the bridge should be put on the long-term plan so the statistics can be verified more thoroughly.
Proponents argued that environmental and economic analyses become less relevant over time as conditions change and the bridge needs to be built now while current analyses ring true.
The latest financial report also touts the connectivity the bridge would provide between the area of the Matanuska-Susitna Valley immediately surrounding the bridge and Anchorage, arguing that connecting the two directly would provide much-needed route redundancy in case a disaster cuts off the existing highway route.
This decision comes despite a 6-5 advisory vote from the Anchorage Assembly in favor of moving the project back into the municipality's long-term list of transportation projects, which would delay construction of the bridge until 2018 or later.
Assemblywoman Sheila Selkregg, who voted against expediting the project, launched a volley of questions at bridge supporters during a recent hearing, noting uncertainties regarding the project's funding and sustainability.
She mentioned a hypothetical model in which the bridge is expected to raise nearly $8.8 million annually in toll revenue. She is concerned the project won't break even until the bridge's $650 million to $700 million cost is paid off.
Annual payments would amount to $44 million, of which only a percentage is covered by toll revenue.
Kevin Hemenway, chief financial officer of the Knik Arm Bridge and Toll Authority, said that this figure is off base, instead saying that 90 percent of the project will be covered by toll revenue.
Mary Ann Pease, a liaison to the state authority pursuing the project, said this covers one of several hypothetical models that may be adopted as the project moves forward.
Detractors of the project expressed concern that the state may end up funding the project by taking money from the permanent fund dividend or the constitutional budget reserve accounts, as private industry investment may not pan out as the state hopes it will.
The state is considering using a $261 million federal transportation bond, for example, to cover costs not handled by the toll. She resents the implications that the state would dip into the permanent fund dividend to pay off the debt, a solution she said the state would not even consider.
Since toll revenue may not cover the cost, fears lingered among many of the detractors present that the state would shoulder the portion of the burden intended for private-sector investors.
Most of the citizens and advocates who testified at the meeting were against the project despite the fact that the majority of voters on the Anchorage Metropolitan Area Transportation Solutions board voted for it.
Selkregg said later that any state funds used to pay for the project would be better spent elsewhere, where the benefits are less nebulous and the rewards are assured.
"We could have the best universities in the country," Selkregg said in a phone interview after the meeting. "We could do many, many things if we're going to start talking about dipping into the permanent fund or the reserve."
"It's projects like this that will lead us out of the recession," said Anchorage Mayor Dan Sullivan, who voted to expedite the project. Sullivan said the community would be unlikely to look back on it with regret if constructed.
Sullivan said it would stimulate the economy and bring jobs to the state in a time of great economic need. He said funding infrastructure projects is a great way to stimulate a faltering economy.
Those who testified in favor of moving the bridge to the short-term plan argued that the nearly $50 million spent in economic and environmental studies should not be allowed to go to waste.
"That'll be approximately $50 million that we'll be putting into the dustbin," said Jeffrey Ottesen, director of program development for the state Department of Transportation.
"Just because we spent a lot of money doesn't mean we should continue to use a lot more money when there are so many better uses for it," said Lois Epstein, director of the Alaska Transportation Priorities Project, an alliance of industry leaders interested in swaying the prioritization of transportation projects.
The Knik Arm Bridge and Toll Authority, an organization created by the state Legislature in 2003 specifically to pursue construction of the bridge, estimated in its latest financial report that the project would create 5,000 new construction jobs over three years.
Pease said this figure accounts not only for workers constructing the bridge, but also for gravel mining and transportation, as well as quality control and ancillary services.
The report also estimated that more than 14,000 new jobs would be created in 2030, a number that takes into account jobs created specifically to provide labor on the bridge and jobs created in related industries as a result of the construction companies and their employees purchasing goods and services. Without considering these indirect jobs, the bridge is said to create more than 8,000 jobs in 2030.
Selkregg said she believes many of the figures authority the presented are inflated and the bridge should be put on the long-term plan so the statistics can be verified more thoroughly.
Proponents argued that environmental and economic analyses become less relevant over time as conditions change and the bridge needs to be built now while current analyses ring true.
The latest financial report also touts the connectivity the bridge would provide between the area of the Matanuska-Susitna Valley immediately surrounding the bridge and Anchorage, arguing that connecting the two directly would provide much-needed route redundancy in case a disaster cuts off the existing highway route.
