YEAR IN REVIEW: Five-year transportation bill provides stable funding to Alaska
President Barack Obama signed the $305 billion Fixing America’s Surface Transportation Act Dec. 4, approving the nation’s first long-term transportation funding legislation in more than a decade.
Known as the FAST Act, the bill provides five years of funding aimed at improving rail, road and marine infrastructure. It passed both the House and Senate by wide margins the day prior to being signed by the president.
All three members of Alaska’s congressional delegation supported the legislation.
Alaska is poised to receive more than $2.6 billion over the life of the FAST Act, with yearly allotment increases. The state took $483.9 million from the federal government for surface transportation programs in federal fiscal year 2015, which ended Sept. 30.
In 2016, that figure jumps to $508.6 million; by the end of the FAST Act in 2020 it is $555.3 million, according to a release from Sen. Dan Sullivan’s office.
The FAST Act also corrects a formula error in the 2012 MAP-21 transportation bill that cost the Alaska Railroad Corp. about $3 million per year in formula funding. The railroad should get $5 million more per year under the new law.
Railroads across the country will also have the opportunity to compete for $199 million in federal grants to aid implementation of the federally mandated Positive Train Control safety system, which is expected to cost the Alaska Railroad nearly $160 million by the time it is fully in place in 2018.
The previous year-end deadline for railroads to have Positive Train Control in place was pushed back to 2018 in a separate piece of legislation passed earlier this fall.
The Tribal Transportation Program — $450 million per year under the MAP-21 extensions — will get an additional $15 million in 2016 and $10 million more in the following four years.
A new federal freight program designed to fund freight-related highway improvements will send $80 million Alaska’s way over the duration of the legislation as well.
2. Ferry system cuts, new ships on way
It was a year in limbo for the Alaska Marine Highway System.
Early in the year, the Transportation Department, which manages the state ferries, increased fares by 4.5 percent on all but the system’s most expensive routes in an attempt to increase revenue and equalize its jumbled fare structure, which had not been changed since 2007.
Ferry funding was again a hot topic in the Legislature as proposed budget cuts could have forced the Alaska Marine Highway System, or AMHS, to cancel summer sailings for which thousands of tickets had already been sold.
In the end, lower oil prices — the cause of the budget crunch — left $5.5 million of fuel money unspent, which was reallocated to fund summer service.
This fall, the AMHS and some legislators began holding meetings in coastal communities to discuss how to prioritize service during future lean budget years.
The system is prepping for a 15 percent cut in fiscal year 2017 when compared to 2014 — the last year before its budget started falling. That cut could also deepen depending on what the Legislature allocates in its upcoming session.
In fiscal year 2014, the Marine Highway System was appropriated $162.6 million by the Legislature. It will have a budget of about $137 million in the 2017 fiscal year, which begins next July 1, if the administration’s projection holds true.
While dealing with funding struggles, the AMHS has been installing a new reservation system, which system leaders say should provide data to better inform future fare and schedule plans.
On the positive, construction of the twin, Alaska class “day boat” ferries bound for service in Lynn Canal continued on schedule at Vigor Industrial’s shipyard in Ketchikan. The 280-foot ferries should be ready for water in October 2018.
A final design for the M/V Tustumena replacement vessel is expected in January from Glosten, a Seattle-based marine engineering firm.
3. Corps selects Nome, then suspends Arctic port work
It was a promising start to the year when the U.S. Army Corps of Engineers released a report in February outlining its idea for a reasonable deepwater port expansion for Nome.
The $210 million plan would have dredged Nome’s expanded outer harbor to nearly 30 feet and added a large vessel dock.
The plan was based on the perceived long-term need for more marine infrastructure in the region as Shell prepared to resume its offshore Arctic drilling program over the summer. Nome would have been home to smaller safety and support vessels for shipping through the Bering Strait and promising oil development in U.S. Arctic waters.
That all came to an end in September when Shell announced the end of its offshore exploration in the Chukchi Sea — a $7 billion expenditure brought down by poor drilling results and onerous federal regulations, the company said.
The fallout from Shell’s decision hit Nome in late October when the Corps suspended its work to expand the city’s port — no Shell, no drilling, no need for more infrastructure was the rationale.
The Corps had been studying the prospect of a major Arctic port in Western Alaska since late 2011 through a cost-sharing agreement with the State of Alaska.
4. Matson closes Horizon deal, invests in Alaska
Pacific shipper Matson Inc. wrapped up a $469 million deal to buy Horizon Lines Alaska business in late May and immediately began investing in its new business.
In late July, Matson announced plans to purchase 2,000 new general purpose containers, 430 winter-insulated containers, a 65-ton gantry crane for its Kodiak terminal and two new tractors for container movement at the Port of Anchorage, altogether a $30 million investment.
Three containerships operating in Alaska are also getting exhaust scrubber systems to comply with international treaty emission control regulations as part of Matson’s investment.
The exhaust systems will eliminate nearly all sulfur dioxide and particulate emissions, according to the company.
Kodiak’s new crane arrived Aug. 13. The ship renovations should be done in about a year. Matson provides twice-weekly containership service to Anchorage and Kodiak and weekly service to Dutch Harbor from Tacoma, Wash.