State eyes Alcan funds to pay for road out of town

Administration says it's up to state how to use those federal dollars; critics says it's unjustified

Posted: Friday, February 17, 2006

State officials plan to use an obscure federal law, originally crafted to maintain the Alaska Highway in Canada, to pay nearly half the cost of a Juneau access road.

Some road critics in the capital claim that the state's use of the federal money - called Section 218 funding - for the $258 million project is unjustified.

"They are going to take the lion's share for a road to nowhere," complained Joe Geldhof, a Juneau maritime attorney who is opposed to the controversial project.

The 50-mile Juneau road has been dubbed by its critics as a "road to nowhere" because it ends at the isolated mouth of the Katzehin River, where motorists would need to board shuttle ferries. Originally it was envisioned as a 68-mile link from Juneau's road system to Skagway and the continental highway grid, but parkland considerations have cut short the proposal.

Section 218 dollars have previously been used for the Alaska Marine Highway System. For example, Section 218 funds contributed 82 percent to building the Fairweather fast ferry, which had a $44 million price tag.

The Alaska Department of Transportation and Public Facilities contends that using Section 218 for the Juneau road is justified. "The whole idea is to provide infrastructure so coastal Alaska can connect with the (continental) highway," said John Manly, the department's spokesman.

The state broadly interprets how it can use the money, Manly said, explaining that it could even be used on shuttle ferries in the Aleutians.

Road critics said Thursday that they strongly disagree with the state's use of the federal money for the Juneau road.

State Rep. Kim Elton, D-Juneau, said the spending is likely going to get close scrutiny due to the overall concern about big spending on mega-projects in Alaska this year.

"I think the broader we interpret how we can use the big bucks, the more unstable the debate becomes," Elton said.

Though the Juneau road would take up the major portion of what's available to Alaska in Section 218 funding, other funding would remain available to the ferry system, Manly said.

That may be true, but using nearly all of the money for the road is "depriving the ferry system of an important source of new construction money," responded Bob Doll, a Juneau Assembly member and former manager of the state ferry system.

The state plans to decommission two mainline ferries and is questioning spending additional money on two new fast ferries.

In the meantime, the Transportation and Public Facilities Department has projected spending $111 million in Section 218 funds between 2007 and 2010 on the Juneau road, its shuttle ferries and a new Katzehin River ferry terminal.

That's 43 percent of the project's total $258 million price tag.

The state has gathered a net total of $150 million to $180 million in Section 218 funds over the last 15 years. Right now, $30 million is available but it will be spent on the ferry system, Manly said.

"I can't reconcile that $111 million with the amount of money that has been available (in the past)," Doll said.

Manly agreed that the $111 million was a "big lump" compared to what has been available in the past. Still, department officials believe they can acquire $30 million per year in Section 218 funds over the next few years to pay for the road, he said.

The dollars provided to Alaska aren't directly allocated by Congress. Instead, they represent the difference between what Congress designates for Alaska projects in its five-year national highway bills and the lesser amount that Congress ends up authorizing for those projects in annual spending bills.

The influx of Section 218 money has previously come out to about $10 million per year, Manly said.

In recent years, much larger sums have been designated through Section 218 to reconstruction of the Alaska Highway and the Haines Cutoff Highway in Canada. That spending has been authorized since the late 1970s, through the U.S.-Canada Shakwak Agreement - named for the Yukon's geological fault-formed Shakwak Valley.

In 2005, Congress allocated $30 million annually over five years directly to the Canadian government, according to federal highway officials.

In 1999, the original Shakwak Agreement between the two nations was split into two pots, one for Canada and another for Alaska, said Karen Tennison, financial manager for the Alaska Division of the Federal Highway Administration.

Some Yukoners agree with Alaska transportation officials and Juneau's road proponents that the Juneau project is a good use of Section 218 dollars.

"It would be positive if one assumes that the Juneau access link wouldn't move as quickly without the Shakwak money," said Rob Harvey, president of Whitehorse-based Yukon Engineering Services, which has been awarded Shakwak contracts in the past.

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