Valley braces for capital budget cuts

PALMER — With the Legislature’s January start date fast approaching and the newly elected Governor Bill Walker taking an axe to state budget that funds roads, schools and other capital projects, local officials are working on their strategy for getting Valley projects funded.

On Dec. 14, Walker announced plans to cut the state’s capital budget down to $106 million — a figure that includes only projects with federal matching funds and the school at Kivalina that the state is obligated to pay for.

“Any growth from that $106 million capital budget will be done with the utmost scrutiny, and with an eye toward items that reduce future obligations,” Pat Pitney, Director of the state’s Office of Management and Budget, wrote in the press release.

Walker cited plunging oil prices as opening up a yawning fiscal gap that constitutes a “budget challenge of an unprecedented magnitude.”

Still, Mat-Su Borough Manager John Moosey said he thinks he’s got a strong pitch to make.

“We’re really the only growing borough in the state, we’re behind on infrastructure and our projects are really to allow Alaska to kind of diversify the economy,” he said.

The diversification he pointed to included work on the borough’s Port MacKenzie, which he, as the borough does consistently, described as a project of statewide significance. He said the borough is talking to Central Alaska Energy, which wants to build a tank farm at the port to store low sulfur diesel fuel for delivery to the Interior of the state, and to WesPac Midstream, which is eyeing a liquefied natural gas project there.

In both cases, Moosey said, the products are to be sold mostly outside of the borough.

“Their main market is Interior Alaska so our project can really help drive down heating costs in the Fairbanks area,” he said.

The companies behind both of those projects are anxious for the completion of the Port MacKenzie Rail Extension, which would link the port to the Alaska Railroad’s mainline in Houston.

“We would like to say we’re 66 percent complete,” Moosey said of the rail extension, before noting that having the project in progress also helps the pitch.

“We’re over half. It doesn’t make a whole lot of sense to get into a project and not finish it especially of that magnitude,” he said.

Funding for the rail spur is not included in the governor’s pared down budget. Also not in the budget? The Susitna-Watana Dam.

“Governor Walker’s common-sense, economics-based decision to remove funding for the Susitna Dam is a strong show of leadership and willingness to walk the talk from last fall’s campaign when it comes to doing what’s best for Alaskans,” Mike Wood, president of the Susitna River Coalition, wrote in a press release from that organization, which has strongly opposed the dam.

And, actually, it’s getting harder and harder to find dam supporters out there. In setting its legislative priorities for the year, the Mat-Su Borough Assembly actually removed the dam from its list.

“By all indications that project is dead on arrival,” Assemblyman Ron Arvin said at the assembly’s Dec. 16 meeting.

Mat-Su Borough Mayor Larry DeVilbiss agreed in his regular Mayor’s Minute podcast.

“I think all of us recognize that we really don’t have the money for that project,” DeVilbiss said.

But the borough hasn’t given up on mega projects, at least judging by what happened when Mat-Su Borough Assemblyman Jim Sykes tried to move the Knik Arm bridge lower in borough rankings.

“I don’t think that the Knik Arm Crossing deserves a high priority due to the fact that the funding mechanism isn’t complete, the thing isn’t actually underway,” Sykes said. “We can move it up later if it looks like someone’s going to order steel or get the (Transportation Infrastructure Finance and Innovation Act) loan,” Sykes said, referring to the loan that bridge supporters have said they are seeking to move the project forward.

The assembly split 3-3 when it came time to vote on whether to de-prioritize the bridge. DeVilbiss cast a tie-breaking vote in favor of keeping the bridge high on the borough’s priority list.

One item that actually moved up on the priority list was the Mat-Su Convention and Visitor’s Bureau’s planned Gateway Visitor Center. The assembly chose to rank that center higher than the South Denali Visitor Center, which the borough has partnered with the state to build near Denali National Park.

The Gateway Visitor Center would sit on land close to the Glenn Highway/Parks Highway interchange, purchased with a $1 million state grant and currently under design with another state grant, this one for about $1.2 million.

“The final phase and request for $5 million in construction costs will also be matched with approximately $2 million from the sale of the current visitor center parcel next to Mat-Su Regional (Medical Center),” MSCVB President Bonnie Quill wrote in that organization’s regular newsletter recently.

Like Moosey’s pitch on the rail spur, she supported finishing what’s already been started.

“Let’s get this done,” she said.

Contact Andrew Wellner at 352-2270 or andrew.wellner@frontiersman.com.