Mat-Su legislators want to have a talk with borough about proposed $40 million rail-to-road conversion

Mat-Su legislators are pushing back a bit on the borough’s plan to convert gravel embankments for an unfinished railroad extension to a road.

“Some legislators are asking why this is being proposed,” borough manager Mike Brown told the Mat-Su assembly at its Tuesday meeting, Aug. 1.

The Legislature will be asked to help fund the estimated $40 million needed for the conversion and Mat-Su’s delegation in Juneau will carry the burden of persuading their colleagues to appropriate the money.

A special borough assembly meeting has been set for Sept. 5 to allow legislators, and the public, to ask questions.

The conversion would effectively end the plan for a rail link from the existing Alaska Railroad near Houston to the borough’s Port MacKenzie, on upper Cook Inlet.

About $180 million has been spent to date, mostly state funds, to build the rail embankments but about $200 million is still needed to lay rails and complete the project.

The rail extension is envisioned as a way to move bulk commodities like coal, gravel or mineral ore from Interior Alaska to tidewater. Port MacKenzie was designed as a bulk commodities port rather than a general cargo port like the Port of Alaska in Anchorage.

Construction of the rail extension stopped in 2017 when state oil revenues plummeted and there was no money to continue the work.

Since then the estimated cost to complete the project has increased from $18 million in 2017 to about $200 now.

There is no apparent source for funds. The state budget is still constrained and while the new federal infrastructure bill has money for passenger railroads it cannot fund projects linked to freight.

Brown and other borough officials believe that converting the unfinished rail embankments to a road would provide public benefits for the public funds sunk into the project.

The borough assembly recently gave the go-ahead for Brown and other officials to pursue the $40 million needed fo the conversion.

The Mat-Su delegation is concerned because it is also being asked to get $38 million from the Legislature for a 50 percent state match for $75 million in new road bonds that will be before voters in the November local election. It is uncertain whether voters will approve the bonds, however.

In other matters, the assembly passed an ordinance amending the Beverly Lake management plan to allow use of electric motors and 15 horsepower-or-less motors on non-motorized days. The sponsor was Assemblyman Rob Yundt. The measure was adopted without objection.

A public hearing was held, as is required, but there were no comments made.

In another action, the assembly adopted a measure officially accepting and appropriating $33,300 in anticipated income from the Point McKenzie rail extension project.

This revenue from lands along the rail right-of-way that was leased to local farmers. The money will be used to help pay salaries for borough employees managing the lands. A public hearing was held, as is required, but there were no comments made.

In yet another action, the assembly officially accepted a $44,000 state grant from the Department of Health for management of point of dispensing medical countermeasures. A public hearing was held, as is required, but there were no comments made.

Both of these ordinances were sponsored by the mayor and borough manager.