This story has been updated with additional information.
The state expects to meet a Friday deadline to submit a revised plan for spending federal transportation dollars after revising numerous deficiencies that put the plan — and associated summer construction — at risk.
That’s what Ryan Anderson, commissioner of the Alaska Department of Transportation and Public Facilities, told members of the Senate Finance Committee on Wednesday, where a packed audience listened to Anderson answer questions from lawmakers about what went wrong with the first plan rejected by federal officials and what the department is doing to ensure it doesn’t happen again.
The presentation came several weeks after the federal Department of Transportation notified the state that its list of projects had been rejected.
[Statewide transportation projects at risk as federal government rejects 2024-27 improvement plan]
Alaska’s State Transportation Improvement Plan, or STIP, for 2024-2027, is the state’s schedule of federally funded highway projects. The state submitted that plan to the federal government on Jan. 19 and received notice on Feb. 9 that it would not be approved.
Among the Juneau area projects that could be affected is a $30 million Cascade Point ferry terminal at the northern end of Juneau’s road system, despite its inclusion in the 2020-23 STIP for construction sometime after 2023. The U.S. DOT, in a 24-page report detailing problems with the proposed 2024-27 STIP, listed the project as ineligible for funding because “no ferry facility here/not part of any transportation network.”
Numerous other area projects including a second Juneau-Douglas crossing, safety improvements at the Fred Meyer intersection, and various upgrades to Alaska Marine Highway system vessels and facilities have deficiencies cited in the report. But many of those are in the process of seeking a place on the STIP list and thus not a foremost priority for the state to correct.
The federal government’s report details findings and itemization of “corrective actions” Alaska must take to bring the plan into compliance with statutory and regulatory requirements.
The federal government identifies, for example, a list of projects that the state included in the STIP that are ineligible for inclusion. The state plan also fails to identify all funding sources for projects and doesn’t clearly document how the state collected public input and consulted with tribes to put the plan together, the federal response says.
In all, the federal government identified over a dozen elements of the state plan needing corrective action.
The clock is ticking for the Alaska Department of Transportation and Public Facilities to resubmit a plan that the U.S. Department of Transportation will approve.
The STIP Alaska is currently operating under expires on March 31. The federal government needs 30 days to review the resubmission, meaning the state must resubmit its plan by Friday.
A plea for Alaska’s congressional delegation “to explore all possible options” by working with the Federal Highway Administration to fix the STIP deficiencies made in a Feb. 26 letter signed by 25 of the 60 member of the Legislature, although House Speaker Cathy Tilton and Senate President are not among them.
House Minority Leader Calvin Schrage, an Anchorage independent who was among those circulating the letter for signatures, said in an interview Thursday the letter was sent “out of an abundance of caution given the really unprecedented errors in the steps submitted to the federal government and concern that these actions could not be corrected in time.”
“We may be in need of some serious flexibility from the federal government to keep funds flowing through the 2024 construction season,” he said.
Schrage said legislators have discussed the matter with all three members of the congressional delegation and “I think they’re hesitant to outline what specific steps they can take and until we actually see whether or not we have an approved STIP, but they are they recognize that they may be able to influence the situation.”
Anderson on Wednesday told senators that there were a few reasons that the original STIP came up short in the federal government’s eyes, and that the department had been working “seven days a week” since receiving the rejection to get the issues resolved.
The state, for example, debuted new software for the current STIP cycle that was later found to have flaws. In previous years, the plan has been presented as a “series of spreadsheets.” This STIP cycle, Anderson said the department wanted to present the information in a way that was more interactive for users and less burdensome on administration.
“One of the problems — and the primary problem — we found (was) that the numbers weren’t adding up,” he said. “We had some certifications where we had staff and others go in and test it, and it was apparent that that system wasn’t accurate for our needs.”
The department then pivoted to a different software — Airtable — to present the information, which is the public-interfacing program users can currently access on the department’s STIP webpage.
Anderson also said there are new interpretations of the federal rules outlining how the plan should be assembled, meaning the state had to do things differently this cycle than in previous cycles. For example, Anderson said the state has historically been allowed to “over-program” in the plan, by adding between 10% to the total plan price tag for projects the department expected to complete if the opportunity arose.
As reported by the Anchorage Daily News, federal highway administrators denied in a Feb. 23 letter that the department’s requirements have changed significantly since 1991.
“We’re now constrained in every year to the revenue that’s been forecasted,” Anderson said.
Multiple senators during Wednesday’s hearing impressed on Anderson the importance of Alaska’s STIP being approved by the federal government.
“It’s hard to downplay the importance of this program and the requests by the federal government for a resubmittal that I think is very important for the listening audience,” said Sen. Lyman Hoffman, a Democrat from Bethel. “This is no trivial matter.”
Sen. Click Bishop, R-Fairbanks, asked if the department had modeled any cash-flow scenarios depicting worst-case, middle-case and best-case funding scenarios depending on the federal response to Alaska’s revised STIP. Anderson said modeling will be done once the approved plan is submitted to the federal government.
“We are the finance table and I don’t have to stress to you the importance of not having the cash flow and (how) it would impact the construction industry in the state,” Bishop said.
State Transportation Department spokesperson Shannon McCarthy said Wednesday the department should know by the end of March whether the state’s resubmitted plan has been approved.
The state has about $350 million worth of projects carrying over from last year, in addition to $200 million already obligated under Alaska’s existing STIP. If the federal government rejects the state’s resubmitted plan, construction on that $550 million worth of projects will continue, but no new transportation projects could move forward.
Wednesday’s Senate Finance Committee meeting can be streamed on the Alaska Legislature’s website at akleg.gov.
• Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com. This reporting from the State Capitol was made possible by the Alaska Center for Excellence in Journalism’s Legislative Reporter Exchange.
