House passed Knik Bridge bill

rmauer@adn.comApril 12, 2013 

JUNEAU -- The House passed the Knik Arm bridge bill 24-15 after debate stretched into early Friday morning, the vote dividing between boosters who cheered the notion of big projects and opponents who questioned the bridge's risk to the state treasury.

Invoking the image of the late Gov. Wally Hickel at the controls of a bulldozer, Rep. Charisse Millett said, "We need some big dreamers, we need some people that can have vision for our state."

"The financial reality can't be willed one way or another by belief," countered Jonathan Kreiss-Tomkins, D-Sitka. "This is a vote not just now in this moment, but this is a vote with implications for decades to come and we don't know what those implications are -- we don't know what the cost of this bill is."

The vote, at 1:05 a.m., split the parties and the caucuses. Most members of the Republican-led majority voted for the bridge, and most members of the Democratic minority voted no.

But there were a number of crossovers. Anchorage Democrats, solid in their opposition, were joined by Anchorage Republican Mike Hawker. Three other Republicans from Southcentral also voted against the bill: Kurt Olson of Kenai, Paul Seaton of Homer and Eric Feige of Chickaloon.

The bill went to the Senate with three days left to the regular session.

Passage in the House was up in the air until the Republican leadership grabbed the bill off the floor Tuesday and sent it to the Rules Committee, where chairman Craig Johnson, R-Anchorage, oversaw a complete makeover in the project's management.

House Bill 23 initially authorized the Knik Arm Bridge and Toll Authority to sell bonds and arrange loans for a contractor responsible for the financing, construction and operation of the billion-dollar project. Tolls were supposed to pay the contractor back, but if the revenue fell short or something else went wrong, House Bill 23 put the state on the hook for up to $1.14 billion.

A legislative audit recently found that the authority overstated projected traffic and revenues. The audit put the bill in trouble but the Rules Committee used an amendment to House Bill 23 to completely revamp the project, dumping KABATA and putting it under the auspices of the Alaska Housing Finance Corp.

AHFC chief executive Dan Fauske, one of the Legislature's favorite bureaucrats, agreed to take on the project after expressing reluctance. He vowed to review its details and fix the problems cited in the audit even if it meant setting back the project's timeline.

While the revised bill authorized the AHFC to take the project to bid and still carried the $1.14 billion obligation, he said he would return to the Legislature if its finances were shaky.

The bill had its first hearing in the Senate Finance Committee Friday afternoon, where KABATA officials defended their traffic projections. They said the audit didn't take into account Point MacKenzie population growth -- and additional bridge traffic -- that the bridge itself would generate.

Finance Vice Chairwoman Anna Fairclough, R-Eagle River, said during the hearing and again later that the Senate might not have enough time to study the bill. If the Senate fails to vote on the House bill, KABATA would remain the bridge agency, at least till the Legislature's next session in January. Responding to that suggestion, KABATA chairman Mike Foster said the agency could continue to do work advancing the bridge, though it wouldn't have the state backing it needed to secure a bidder or federal financing.

Sen. Lyman Hoffman, a Finance Committee member and Democrat from Bethel, said in an interview that during a break, he asked Foster which he preferred -- Senate passage of the House bill, which would allow the bridge project to advance under AHFC, or nothing, which would keep KABATA in control. Hoffman said Foster told him he'd rather not see the House bill passed.

Just before midnight Thursday on the House floor, Johnson praised the work already done by KABATA. "But what we've done with this bill is brought in our best team. We're bringing in the A-team that's going to complement the work they've already done, incorporate the work they've already done. The bond market loves these guys," he said

But both Johnson, who voted for the bill, and Feige, who voted against it, said they'd rather see the state build the bridge using conventional financing or its own massive cash reserves, not the private-public partnership -- called "3P" -- that KABATA was working toward.

Rep. Les Gara, D-Anchorage, tried to amend the bill to remove the $1.14 billion obligation because of the risk to the state's future it represented. "Until we get better toll numbers, until we get better traffic numbers, we should not include that section," he said.

But the amendment failed 9-30, with opponents saying it would have killed the project.

Rep. Tammie Wilson, R-North Pole, argued that traffic projections shouldn't be the only criterion for evaluating the project.

"How many people are going to cross this bridge? I have no idea," Wilson said. "How many people went up the Parks Highway when it was first built -- I mean, did they even have traffic counts back then, the little rubber things where you drive across? Probably not. So if they would've waited to build a highway in Alaska until they had the numbers, we'd probably still be walking or on horses."

Two representative with land in the Mat-Su Valley declared conflicts -- Rep. Lynn Gattis, R-Wasilla, who owns a Point MacKenzie hay farm, and Rep. Beth Kerttula, D-Juneau, who grew up near Palmer and whose family still owns property there. But as is common in those circumstances, other representatives objected to their withdrawal from the vote and House Speaker Mike Chenault ruled they would have to participate.


Reach Richard Mauer at rmauer@adn.com or in Juneau at (907) 500-7388.

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