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State transportation officials and their private sector allies advocating for a road north from Juneau toward Skagway have been presenting misleading financial arguments to the public and to the Legislature to justify the $374 million project.

A key argument in favor of the Juneau Access Project, the extension of a road 50.8 miles north from Juneau to a new shuttle ferry terminal at the Katzehin River, is that eliminating a ferry run up Lynn Canal and replacing it with a cheaper road would save the state money by cutting costs for the financially strapped ferry system.

That's part of a larger plan throughout Southeast Alaska called "roads to ferries" intended to build roads all across the region, connected by inexpensive shuttle ferries running shorter stretches.

Road advocates such as Juneau's Richard Knapp, head of Juneau's road advocacy group Citizens Pro Road, said building new roads will help save a struggling, but needed, ferry system.

"We cannot continue in going the way we are," he said.

"The whole ferry system costs $100 million a year and ridership is dropping and capital requirements are building up," Knapp said.

A new strategy for Southeast

Among places where that strategy could be implemented is on Baranof Island, where a road across the island would enable the ferry system to avoid a lengthy and dangerous run to Sitka, between Kake and Petersburg, and in Lynn Canal.

Many of those communities aren't interested in the roads DOT is offering them, however. Skagway, Sitka and Kake have all sought better ferry service but don't want new roads.

First up is expected to be Lynn Canal, said Jeff Ottesen, planning director for the Department of Transportation and Public Facilities.

Ottesen called the Juneau access road "self-financing" because of its ability to replace a costly ferry with a cheap road, in testimony to the Senate Transportation Committee during the last legislative session.

Department Commissioner Leo von Scheben reiterated that position in a letter defending the Juneau access road last month.

"One of the benefits of (the Juneau access road) is that it reduces the cost of ferry operations in Northern Lynn Canal," von Scheben wrote.

"This future saving of general fund is an important cost consideration," he wrote.

Data contradicts commissioner

State and federal project documents reviewed by the Empire show the plan being advocated by the Department of Transportation would not save the state money and would actually cost more in annual maintenance and operation costs than not building a road.

The top two documents enabling the road to go forward include the Environmental Impact Statement completed by the state but required by the federal government under the National Environmental Policy Act. Also needed is the federal Record of Decision, required before federal highway funds can be spent on highway projects and outlining the justification for spending federal money.

The two documents list multiple benefits of the road, including lower cost to travelers, convenience and speed.

The EIS looked at multiple project options and settled on alternative 2B, a road up the east side of Lynn Canal. It compared it to a "no action" alternative, as required by law.

The financial comparisons contained in the 554-page EIS show that alternative 2B would cost more than the no action alternative, costing $4.5 million per year, versus $3.3 million, in maintenance and operations cost. The Record of Decision confirmed those numbers after the decision was made.

Alternative 2B wouldn't entirely do away with ferries in Lynn Canal, because it would still require shuttle ferries from Katzehin to Haines and Skagway. Subsidizing that ferry service, as well as $1.8 million for maintaining and operating the road itself, results in the projection of a $4.5 million annual expense.

The operating cost estimates do not include the cost of building the road, currently estimated at $374 million, of which $24 million has already been spent on planning.

DOT's project manager for Juneau access said reducing state operating costs is not among the benefits of the road.

"It is not going to save actual dollars," DOT's Reuben Yost said.

Yost's statement is backed up by the EIS and the Record of Decision, but contradict public statements of prominent road advocates within and outside the department.

Von Scheben has declined several interview requests, but said he may agree to answer written questions the Empire submitted in May, said Roger Wetherell, the department's communication director.

"At some point, time permitting, he may send you a response to those questions," Wetherell said.

Knapp, a former commissioner of the Department of Transportation and Public Facilities as well as a prominent road advocate, called the revelation of a lack of cost savings "absolutely astounding."

They don't change his conclusion about Juneau's need for the road, however, it's just one of the arguments in its favor. And Knapp isn't ready to acknowledge there won't be a cost savings.

"There's so many different ways to figure this thing," Knapp said.

The road would still be important to diversify Juneau's economy, reduce costs significantly for travelers and help lower overall transportation costs, he said.

In addition, numbers may well have changed since the EIS was completed, and ferry costs likely have increased more than road costs, he said.

Yost said costs of construction of the selected alternative are recalculated annually, but the cost of the rejected alternatives are not.

"It was a major exercise when we did it for the EIS; it's not something we chose to do again," he said.

The overall calculations may have been different if capital costs were included, Knapp said, balancing the cost of building the road with that of building one or more new ferries.

The EIS also includes what it calls a "life cycle" cost comparison, showing costs over 30 years and including capital costs. That comparison, too, shows not building the road to be cheaper than building it.

An updated, "supplemental" EIS in 2005 said the 30-year life cycle cost would be $267 million for the no action alternative, compared to $352 million for the Lynn Canal highway.

"None of the build alternatives would reduce state cost over a 30-year period when taking into consideration construction and refurbishment costs, operating costs and revenues," the 2005 SEIS concluded.

Alternative reflects lower service

That document also makes an argument that Knapp did as well.

"The overall lower net cost to the state of the No Action Alternative would be the direct result of higher out-of-pocket cost for travelers," the SEIS stated.

The "no action" alternative developed in 2004 would reflect lower service than currently provided, leading to some of the cost savings, Yost and Knapp pointed out.

Growing costs have hit ferry expenses harder than the road, Knapp said, and his extrapolations show operating and maintenance costs savings that are not reflected in the EIS.

"There's at least a million dollars savings even when you factor in road maintenance, and you are moving all these cars," he said.

The EIS helps decision makers weigh the value of various options, and cost to the state is only one. Cost to travelers is another, and the EIS determined that's where big savings would come.

The EIS process doesn't force policy makers to choose any one alternative, but instead provides information about all reasonable alternatives to ensure an informed decision.

The EIS determined that cost per vehicle would decline dramatically with the new road, because traffic would increase because the road would meet "latent" demand for travel between Juneau and upper Lynn Canal.

The EIS estimates that travel in Lynn Canal could rise from the 2008 estimate of 90 vehicles per day to as many as 400 relatively quickly.

That's the typical amount of travel between towns the size of Juneau, Haines and Skagway elsewhere, and the EIS assumed the high cost of ferry service is what is preventing that travel.

Knapp said the new highway would meet that demand, while a "no build" option would not.

"People in Lynn Canal want better service, and the do-nothing alternative reflects less service than is provided today," he said.

One of the reasons for the dramatic difference in possible cost savings is that the Lynn Canal route has traditionally brought in the most money of any marine highway run.

The EIS was conducted at a time when Lynn Canal service was provided by one of the fuel-hungry fast ferries. Former ferry chief Robin Taylor told the Legislature that only on the "lucrative" Lynn Canal route could the fast ferries operate cost effectively.

This year the more fuel efficient, but slower, Malaspina is operating in Lynn Canal during the summer. That means the Lynn Canal cost and benefits may be changing again, but Knapp said it is not changing his mind that Alaska needs the road.

"You can't convince me this is not cost effective to do this, to say nothing of the transportation benefits," he said.

Work on the road is awaiting a final permit from the U.S. Army Corps of Engineers, which department officials say they expect to receive this month. It also faces the prospect of court challenges that could stop work.