Walker fires DOT commish after road report

Gov. Bill Walker fired Alaska Transportation Commissioner Pat Kemp Jan. 12 after he urged Walker to move forward with the Knik Arm bridge and the Juneau access road projects, or face repaying up to $98.6 million to the federal government.

Walker spokeswoman Grace Jang wrote in a statement to the Juneau Empire that the governor wants department commissioners aligned with his priorities.

Status reports on three of the state’s biggest and controversial road projects were released Jan. 9 by Walker’s office.

Kemp was appointed by former Gov. Sean Parnell and had been with the department since 1971. The Empire reported that Kemp planned to retire at the end of November, but Walker asked him to remain on month-by-month basis.

The former state commissioner told the Empire that he was surprised to learn the projects weren’t in line with Walker’s priorities.

“That memo I sent out was just a factual memo, there wasn’t any editorial stuff in there. We just gave facts, so that was a little surprising,” he said to the Empire. “(The Juneau road) project’s been around for a while and all the previous governors supported it and this one apparently doesn’t and that’s just what happens when someone takes over.”

DOT Deputy Commissioner Reuben Yost was also asked to step down.

Deputy Commissioner John Binder, who oversees the state airport system, will replace Kemp on an interim basis.

Jang said the governor plans to name a permanent DOT commissioner by the end of January.

Walker suspended spending on six large state projects, all in the pre-construction phase, with a Dec. 27 administrative order. The governor plans to investigate which, if any, of the projects should be continued as the state faces an ever-widening budget deficit currently topping $3.5 billion. He has long said the state needs to prioritize its infrastructure spending.

Walker requested the agencies leading the projects submit the reports to him by Jan. 5.

“Perhaps the most significant issue is that each project must be evaluated in total, as the many specific contracts and reimbursable service agreements with other agencies are intended to advance the project,” Kemp wrote in the report to Office of Management and Budget Director Pat Pitney, who is overseeing the reviews for the governor. “Halting or even suspending any one of these activities is essentially delaying the overall project, and as such would likely trigger a financial penalty.”

The State of Alaska would not save money on the federal funds allocated to these projects if they are stopped because the required state match amounts would simply be shifted to other projects along with the Federal Highway Administration dollars, according to Kemp.

Transportation projects that receive federal funding must be matched by state or local sources. Federal Highway Administration, or FHWA, allocations typically require an overall project match of 10 percent to 20 percent.

The state would likely have to repay $72.9 million spent on the Knik Arm bridge and $25.7 million spent on the Juneau road — a 48-mile extension of the Glacier Highway north of the capital — if the projects are killed for what are deemed political reasons, according to Kemp’s report.

To date, $74.3 million of federal money has been spent on the Knik Arm Crossing by the Knik Arm Bridge and Toll Authority and state DOT, and $28.9 million on the Juneau project. The expected repayment amounts are slightly less than the federal project expenditures due to an FHWA formula used to calculate what needs to be paid back, state DOT spokesman Jeremy Woodrow said.

“The Federal Highway Administration wants to know what the direction of the department is. They want to know whether we are moving forward or stopping the projects,” Woodrow said.

Further, quickly reallocating the “use it or lose it” federal dollars would be a challenge because transportation projects are planned years in advance, he said.

KABATA was allocated $55 million for its work and DOT got $35 million for the Juneau road in the fiscal 2015 capital budget. Both allocations included $5 million state matches.

The Knik Arm bridge construction responsibility has since been shifted to DOT, and project lead Judy Dougherty has said the $55 million would get the state to the early construction phase scheduled for late 2016.

Additional state match funds would be included in the overall $300 million needed from the state and FHWA for the project’s three-pronged, $900 million financing plan.

The $574 million Juneau access road would be paid for state-matched federal allocations.

Putting the Juneau project on hold would be easier once it has a record of decision, or ROD, according to the status report.

“Delaying the project prior to issuance of the ROD for more than a year or two would result in the requirement to later restart the process with agency and public scoping, and revising or replacing the draft (environmental impact statement) as appropriate,” the report states.

A supplemental draft EIS was released for the project in September. In 2006 the FWHA issued a ROD in support of the road. However, a 2011 federal Appeals Court ruling required additional alternatives to the road be investigated.

Arctic director for The Wilderness Society Lois Epstein called the reports “confusing and misleading” in a formal statement released Jan. 9.

“Alaska’s now-limited revenues should go not to controversial mega-projects with known community harms, but to higher priority needs such as upgrading bridges and maintaining existing state infrastructure,” Epstein said.

Public debate over the Juneau access road project has been renewed after the release of the latest draft EIS.

On the Knik bridge, the report states that as long as DOT is making progress on a project: “Reasonable requests for time extensions are allowed. Due to the total cost of the project exceeding $500 million, FHWA requires that a financial plan be approved by the administration’s Major Projects Office. The financial plan must provide reasonable assurance that sufficient funds will be available to meet the proposed construction schedule.”

The Alaska Industrial Development and Export Authority’s look into a 220-mile industrial road off the Dalton Highway to the Ambler Mining District is the third proposed thoroughfare on the governor’s chopping block.

Walker cut an $8 million appropriation to the project from Parnell’s proposed capital budget in early December.

AIDEA has $9.7 million from prior appropriations to continue work on the project’s EIS and would need another $6.8 million in the next two fiscal years to complete the work.

The state has spent more than $52 million $26 million on the project since fiscal year 2011.

AIDEA had hoped to submit an EIS application by the end of 2014, prior to Walker’s order to stop work, according to spokesman Karsten Rodvik.

Construction of the industrial gravel route would be privately financed through the authority.

NovaCopper, the primary explorer of the copper deposits in the large area of Northwest Alaska has said it needs the road to make final exploration and construction of one or more mines feasible.

Villages along the route have expressed great concern over how it could impact migrating caribou relied upon for subsistence hunting.

Epstein said a claim by AIDEA that “No appropriated funds would be used for the construction or maintenance of the road” cannot be substantiated.

Giving AIDEA the opportunity to move forward with the EIS would better allow the agency to gauge public sentiment and address concerns. It would also validate to industry that the state is willing to develop infrastructure for resource development that brings value to the state, according to the authority.

Elwood Brehmer can be reached at [email protected].

11/18/2016 - 2:00pm