Lawmakers balk at request for new Anchorage port funding

JUNEAU -- The Port of Anchorage is trying to wrest $320 million out of the Legislature this year for its massive dock replacement project, but the initial signs are that it won't get nearly that much money.

Port director Bill Sheffield -- a former governor -- made his pitch Wednesday to the Senate Finance Committee.

The port project now stands out as the single biggest capital request in a year the Legislature is being bombarded with pleas to finance big projects, from the Knik Arm bridge to a Port MacKenzie rail line to a Susitna River dam for hydroelectric power.

The city-owned Port of Anchorage is in the midst of $1 billion-plus replacement of the old existing dock with a new structure that involves creating a new dock face 1.5 miles long out of sheets of steel, and backfilling it with gravel to create new land. It's a vital facility -- much of what Alaskans eat, wear and drive comes through the port, which turns 50 this year.

The port project has secured and mostly spent $279 million, but the project needs over $900 million more, Sheffield said.

He is seeking $320 million in state funds for new dock sections he said need to be installed over the next few years. On the south end of the port, contractors can't start replacing fuel docks until all the money is in hand, Sheffield told senators. On the north end, Sheffield needs more money to repair and complete a troublesome new section, he said.

"Is that in the governor's capital budget?" asked Sen. Bert Stedman, a Republican from Sitka who co-chairs the Senate Finance Committee. "Did I miss that? Or where is that?"

No, Sheffield said. Anchorage Mayor Dan Sullivan requested $20 million from the state, and Gov. Sean Parnell proposed spending that amount in the state budget year that begins July 1.

Not enough, Sheffield told legislators.

"We need a big hit within the next two years," he said.


Of the $279 million in federal, state and other funding the port has collected for the project, it has spent all but $14 million.

The port needs another $922 million to finish the job by 2021, Sheffield told the senators. It expects to recover some of that through claims against the faulty work done in 2009, he said. Numerous U-shaped steel cells installed then ended up bent, mangled or otherwise damaged and must be replaced. Most of the 2010 construction season was spent dealing with the problem.

The project is now hundreds of millions of dollars over budget and a decade behind a plan set in 2005.

Several legislators said they support the Anchorage port, but doubt the project will get anything like $300 million for the coming budget year.

"Highly unlikely," Stedman said. The governor's proposed budget is in the red as it is, the senator said.

State Rep. Les Gara, D-Anchorage and a member of the House Finance Committee, has been questioning the port project's rising costs for years. The port is in his district, and he said he supports the expansion, but the budget just can't keep growing with no end in sight. Dollars spent on construction instead could pay for statewide preschool, or more slots for alcohol treatment, or college aid for financially needy students, he said.

When told of Sheffield's $320 million request, Gara's initial reaction was, "Are you serious?"

Sen. Lesil McGuire, R-Anchorage and member of the Senate Finance Committee, said the Legislature is "in an infrastructure building mode. You can feel that and sense it, whether it's energy projects or transportation projects."

Sheffield likely will end up with more than $20 million, she said.

"But I think $320 million is too much for the Legislature to bite off and chew right now," McGuire said.

Karen Rehfeld, director of the governor's Office of Management and Budget, said Sheffield has been working hard to persuade the governor and legislators of the need and has proposed what she called an aggressive financing plan.

But: "the $300 million is a pretty heavy lift for everybody," she said.


Mayor Sullivan said in an interview Wednesday that he backs Sheffield's request and anticipates the money would come from a statewide port bond package, not a direct appropriation. Financing could be a combination of revenue bonds paid back through port finances, and general obligation bonds, which require voter approval, Sullivan said.

"There is no more critical project for the state than finishing the Port of Anchorage," Sullivan said. "We'd regret it for many, many decades if we don't get this project to completion."

The Anchorage port isn't the only one in Alaska seeking a big check from Juneau.

The Mat-Su Borough wants $55 million to build the next leg of a rail line to Port MacKenzie -- the governor requested $20 million. The Port of Skagway wants $10 million -- matching the governor's request -- for improvements to accommodate the growing Yukon Territory mining industry as well as more dock space for cruise ships. Smaller marinas want to grow, too, Rehfeld said.

There's hallway chatter about a port bond package but nothing has been introduced in the Legislature, Rehfeld said. Sheffield said no legislators have agreed as of yet to take the lead on such a measure.

Stedman said the Port of Anchorage doesn't bring in enough money to support a big revenue bond. A general obligation bond couldn't go before voters until 2012, Rehfeld said.

While the port is looking to the state, it is not counting on any money from the federal government over the next two years, Sheffield said.

"The way Congress is putting on the battle right now -- (anti-)earmarks and cutting back -- we may well get some money this year. We may well get some money next year. But we are not sure," he said.

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