Billions of dollars of road, ferry and other statewide transportation projects are at risk due to the federal government rejecting Alaska’s State Transportation Improvement Program (STIP) for 2024-27, citing a variety of failures by Gov. Mike Dunleavy’s administration to meet project eligibility requirements.

Juneau-related items potentially affected include a multitude of Alaska Marine Highway System vessel and facility projects, a second Juneau-Douglas crossing, and improvements at the “Fred Meyer intersection,” all for different reasons.

The state has been given until March 1 to submit a revised STIP that meets specified requirements to the U.S. Department of Transportation. If the plan is accepted the deadline for DOT to approve it will be extended until March 31.

Shannon McCarthy, a spokesperson for the state Department of Transporation and Public Facilities, said Wednesday “the plan is to address each and every one of the corrective actions brought up” by Feb. 23, giving the federal government sufficient time to approve the updated STIP by the extended deadline.

The revised plan, which includes about $900 million in annual federal funding for projects, is slated to replace the existing 2020-23 STIP, funding for which ends March 31. McCarthy said she did not immediately know if there would be a funding lag between the end of the current STIP and the new one if federal approval occurs on or near the same date.

“We are absolutely confident that addressing these corrective actions will keep us on track” for the summer construction season, she said.

Four members of the state House’s minority caucus, which is frequently at-odds with Dunleavy on policy matters, said during a media availability Wednesday concerns about deficiencies in the new STIP have been raised for months by residents, local government officials and others, which has also resulted in exchanges between the state and federal governments.

“So one question is why has the department not listened to, and responded to and fixed issues identified in the critiques,” said Rep. Zach Fields, an Anchorage Democrat. “And then the other question is what are they going to do now in a very short timeframe to fix the STIP so that their errors don’t cost the state a billion dollars annually in transportation funding, which of course would be devastating for our economy and for much-needed projects throughout the state.”

Members of the minority caucus said they learned about the STIP rejection Tuesday night, one day after McCarthy said DOT officials received the letter of notification from the federal government, which is dated Feb. 9. State DOT leaders are expected to discuss the rejection with lawmakers during a House Transportation Committee meeting at 1 p.m. Thursday.

The draft STIP for 2024-27 was released last July, with a revised draft released during the fall. McCarthy said they submitted a “soft” version of the final draft to the U.S. DOT on Jan. 11 and, after getting no notification of needed corrections, officially submitted the final draft on Jan. 19.

Alaska is in a unique position with the subsequent rejection, with most other states having their plans approved weeks or months ago, according to a report by the Alaska Beacon.

Among the local projects facing rejection is a new $30 million Cascade Point ferry terminal at the northern end of Juneau’s road system, despite its inclusion in the 2020-23 STIP for construction sometime after 2023. But the U.S. DOT, in a 24-page report detailing problems with the proposed 2024-27 STIP, listed the project as ineligible for funding because “no ferry facility here/not part of any transportation network.”

“This is an interesting one for us, it’s going to take some more questions with the Federal Highway Administration, because of course the Cascade ferry terminal has actually been previously approved in a previous STIP,” McCarthy said. “So that’s one of those ones that will have to get clarification on.”

Various questions are raised about other ferry projects and facilities, including the use of “toll credits” — essentially passenger fees — for some purposes such as meeting state matching fund requirements for federal grants. The U.S. DOT report states such credits “are being reviewed for approval,” but in the meantime “any use of toll credits should be noted on the individual projects they are programmed to be used on.”

The rejection of proposed improvements at the Fred Meyer intersection — cited by some local officials as one of the most dangerous in Juneau due to the number of accidents there — is because the project is not in the federal Highway Safety Improvement Plan and thus ineligible for safety funding, according to the U.S. DOT.

A list of procedural deficiencies is cited in declaring the second Juneau-Douglas crossing — which remains in the planning stages after decades of debate, although the City and Borough of Juneau received $16.5 million in federal funds last year to complete final design work — ineligible for the new STIP.

“Planning is not a phase of a construction project,” the report states. “Separate planning work in a different Need ID. Planning study not expected to be complete until summer 2024. How is design going to start immediately after? Match is not correct – 5% for RAISE and 9.03% for CDS.”

While such terminology may not be familiar to laypersons — or even policymakers trying to understand and respond to the deficiencies — it is indicative of the various regulatory and public policy shortcomings cited by the U.S. DOT in its rejection.

McCarthy, a state DOT employee for the past 25 years, said that while a new STIP is created every four years (and amendments are added during the interim years), changes have occurred that made preparing the 2024-27 STIP different.

“The STIP has really changed over the years,” she said. “I think what’s happened is that DOT has had different advice, different guidance regarding the FHWA statutes and regulations in the past than we’ve had this year. Some interpretations have changed this year. And that’s what we’re really coming down to.”

• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com or (907) 957-2306.