Alaska officials scramble to submit new $5.6B state transportation plan by Friday deadline

JUNEAU — Alaska transportation officials are scrambling to resubmit a $5.6 billion state transportation plan by the end of the week to ensure billions of dollars in planned construction projects across the state can get federal approval.

Alaska’s State Transportation Improvement Plan, or STIP, was rejected by the federal government earlier in the month due to significant deficiencies it found in the state’s plan. The STIP is a federally required plan for highways, state ferries and general transportation projects to be implemented in Alaska through 2027.

State officials have until Friday to submit a new transportation plan, which needs federal approval by March 31.

Ryan Anderson, commissioner of the Alaska Department of Transportation and Public Facilities, told the Senate Finance Committee on Wednesday that around 90% of the new transportation plan was completed as of that morning. Some projects may only get funding for a first phase of construction, he said.

Alaska legislators have been alarmed by the federal rejection of the state’s transportation plan, and the revelation that a litany of problems occurred during its development process.

For 12 to 16 months, state officials used a new platform to develop the transportation plan before abandoning it last May when problems emerged.

“One of the problems, and the primary problem we found, were that the numbers weren’t adding up,” Anderson said.

Local transportation planning organizations in Anchorage and Fairbanks warned in August that there had been no coordination from the state before a draft plan was unveiled. They also raised concerns that the Dunleavy administration had planned projects within their municipal boundaries without their approval, which would be a violation of federal regulations.

One particular sticking point were bridge improvement projects planned in the Interior that could be used for a contentious Kinross Gold-operated ore-haul project. Shannon McCarthy, a state transportation department spokeswoman, said Wednesday that those bridge projects were no longer in the plan.

Federal highway administrators have told Alaska officials that they need to defer to local planning organizations for projects within their municipal boundaries. In a Feb. 23 letter, those highway administrators said that “these requirements have not changed significantly since 1991,” despite state transportation officials insisting they were new.

At one stage last year, the state had planned projects $3 billion above what was allowable before stripping planned spending back.

Costs have ballooned for projects in recent years, partly due to high inflation. The Cooper Landing bypass project — a decades-old plan to divert traffic around the small and congested Kenai Peninsula community —needed to have its construction plans reworked last year after projected costs had more than doubled to $850 million since 2018.

State transportation plans are typically approved by October, the start of the federal fiscal year. Alaska is the only state waiting more than six months later for federal approval of its four-year transportation plan.

Federal highway administrators said in a 24-page disapproval notice earlier in the month that the state’s transportation plan was missing significant information on how projects would be operated, maintained and funded.

Last week, those same federal agencies said in a letter to the state transportation department that “we feel like progress is being made” to resolve the deficiencies in the state’s transportation plan.

Fairbanks Area Surface Transportation, or FAST, Planning held a special meeting Wednesday afternoon and discussed the federal rejection notice. Jackson Fox, executive director of Fairbanks transportation planning organization, said it was his opinion that it would take weeks to resolve the issues flagged by the federal highway administrators.

“I don’t know the consequences of another rejection,” he said Wednesday, later adding, “I hope the state gets a conditional approval in March, so the state can move forward with something. That’s my hope.”

Senate Finance Committee members on Wednesday said they wanted a list of projects that may need state funding if the transportation plan is rejected or is only partially approved.

Watching in the Capitol on Wednesday morning were members of the Associated General Contractors of Alaska. Executive director Alicia Amberg said that getting the transportation plan approved, and billions of dollars flowing into Alaska for construction projects, was the organization’s “No. 1 priority.”

“We want to see a speedy resolution,” she said, adding: “We can do a lot of postmortem and assess what happened and what we can do better in the future — afterwards.”