University of Alaska items top $2.1B budget

The University of Alaska was a big winner when the Senate passed its $2.1 billion version of the state capital budget.

In the Senate, $195 million was added to Gov. Sean Parnell’s 2015 fiscal year budget proposal to fully fund an overhaul of the combined heat and power plant at the University of Alaska Fairbanks. Another $35.6 million was added to complete the UA Anchorage campus engineering building and associated parking garage.

 The 17-megawatt plant has a $245 million price tag, but fuel savings from new high-efficiency boilers will allow the UAF to finance the remaining $50 million, according to the Board of Regents.

General fund money makes up $37.5 million of the $195 million approval, with much of the rest being bonded.

While funding the power plant in one lump sum was unexpected, university system leaders for years have emphasized the need to overhaul the 50-year old, coal-fired plant at Fairbanks and prioritized that project over the funds needed to finish their own engineering building now under construction.

With $547.9 million in unrestricted general funds, the Senate added more than $132 million of such money to the governor’s budget proposal. More than $1.1 billion of the capital budget is federal funds.

As of press time April 16, there was no reason to believe the university add-ons to the governor’s budget would not pass the House.

Parnell had appropriated $10 million to the UAA engineering building, but the Senate’s total $45.6 million appropriation should finish the $123.2 million, 75,000-square foot building and 500-space parking garage, the latter of which is required by Municipality of Anchorage zoning laws because of the parking eliminated by the building construction.

When he released his budget in December, Parnell said the state would focus on completing existing work in the midst of a budget shortfall projected to be in the neighborhood of $1.5 billion.

The Senate followed the governor’s lead.

“Our main objective is to show continued restraint in capital spending while maintaining current assets, finishing what we started and focusing on critical needs within our communities,” Senate Finance co-chair Kevin Meyer, R-Anchorage, said in a formal statement after passing the budget.

The budget passed with a 19-1 vote; Anchorage Democrat Bill Wielechowski was the only dissenter.

During debate Wielechowski said the budget disproportionately doles out funding.

“Anchorage is 42 percent of the population of the state and by my calculation we’re getting about 20 (percent) to 21 percent,” he said. “I think there needs to be better regional balance.”

Sen. Johnny Ellis, D-Anchorage, said the UAA funding would come as a “great relief” to university faculty and students.

Meyer said he felt good about the capital budget because of the cooperation between the Republican majority and the Democrats on the bill.

Anchorage Democrat Sen. Hollis French called the budget “defensible” but added, “Had the minority written this bill it would have been smaller.”

A $10 million appropriation for the UAF engineering building in Parnell’s budget stayed in the Senate version. UAF spokeswoman Marmian Grimes said the money would allow the university to enclose the structure and finish it when the power plant is done. Finishing the 119,000-square foot engineering building will mean putting $23.3 million towards it in future years.

Grimes said in an interview that the university is ready to get to work on the power plant so it can be up and running for the winter of 2018-19.

“We’ve received an air quality permit and there’s an RFP (request for proposal) for boiler designs on the street now,” she said.

The new boilers would decrease most particulate and gas emissions by more than 50 percent, according to UAF.

Along with the plant funding, the Senate added language to the budget stating the university system should implement a utility surcharge or increase tuition up to $2 million annually to offset revenue bond debt service for the plant.

Wielechowski’s amendment to remove the surcharge language was voted down 5-15. The Anchorage Democratic caucus voted for the failed amendment.

“I can just imagine what the (UAA) students will think when the hand of government goes into their pockets to help the students at UAF,” French said.

Other projects

One day before passing a complex financing plan for the Knik Arm Crossing, the Senate approved $55 million for the Knik Arm Bridge and Toll Authority. That money will be used for remaining bridge design, contract procurement and permitting needed before formal construction begins among other things.

The KABATA appropriation matches the governor’s recommendation.

The Alaska Railroad Corp. got $15 million in the Senate’s version of the budget to continue installing the federally-mandated Positive Train Control safety system.

Railroad spokesman Tim Sullivan wrote in a statement to the Journal that the $15 million is a “good start” but won’t cover all the expenses incurred from the system meant to remotely slow or stop a train before an accident occurs and will soon be necessary for the railroad to avoid federal fines and continue passenger service.

An additional $5.2 million request has been sent to the House along with the budget, Sullivan wrote. Before the legislative session began, railroad officials requested $20.2 million in fiscal 2015 and $20.6 million in 2016 for Positive Train Control.

The Matanuska-Susitna Borough-led, 32-mile Point MacKenzie Rail Extension from Houston to Port MacKenzie got $11 million. If the figure holds in the House it will leave the quarter-billion dollar project about $90 million short of completion, which has been hoped for late 2016.

With the added expense of the university projects, the state cannot afford the KABATA or rail extension money, French said. He was one of four senators to vote against the Knik Arm Crossing Financing plan April 12.

The State Museum in Juneau, which closed in February for more than two years of renovation and will reopen as the State Library, Archives and Museum, received $37.5 million from the general fund. The Anchorage Museum was appropriated $5 million for a gallery redesign in the Senate budget as well.

Statewide village water and wastewater projects received $51.5 million, of which $42.7 million is federal money. An additional $14.5 million went to municipal water and waste facilities grants — all general fund money.

The Alaska Energy Authority got $10 million for continued Susitna-Watana dam reconnaissance work and $22.8 million for its popular Renewable Energy Fund, slightly more than Parnell’s recommendation.

If the controversial emergency access road from King Cove to Cold Bay on the Alaska Peninsula championed by Sen. Lisa Murkowski is ever approved by the federal government, the state will be ready to build it with a designation of $21 million from the federal State Transportation Improvement Program.

Port work in Seward, where the city is looking to complete its breakwater and develop additional marine infrastructure was awarded $3.9 million. The Senate approved $3 million for similar work in Nome.

Elwood Brehmer can be reached at [email protected].

11/21/2016 - 10:25am