State would have to pay some Knik bridge operating costs

JUNEAU -- The state of Alaska would be on the hook for costs to operate the Knik Arm bridge until the project generates enough tolls to offset those costs.

The bridge over Knik Arm would provide a second route from Anchorage to the Matanuska-Susitna Borough, which in the last census was the fast-growing region in the state. Supporters say a bridge would create new opportunities for economic development and could pay for itself. It would connect Alaska's largest city to land near Point MacKenzie, which is home to a soon-to-open prison.

Critics say the project could be a bust -- another "bridge to nowhere." They worry that traffic estimates are overblown and that the state obligation could be significant.

The House Finance Committee this week advanced after its first hearing of the session on the bill, a measure that would increase the bonding authority for the Knik Arm Bridge and Toll Authority and create a reserve fund for the proposed Knik Arm crossing. Rep. Mark Neuman, R-Big Lake, the sponsor of HB158, said no money is being sought for the reserve fund right now.

The authority says the bridge and associated 18 miles of road will cost around $1 billion.

Shannon McCarthy, a spokeswoman for the authority, said Friday that it could be seven to nine years before sufficient tolls are generated to exceed what are known as availability payments, which the state would have to pay for the bridge being built, run and maintained by a yet-to-be-named private entity.

During those early years, the state would be asked for money for a reserve fund to make up for a shortfall in tolls. The authority expects to seek $150 million for the reserve fund, which McCarthy said should be sufficient to cover the state's obligation.

After that period, McCarthy said, it is hoped that tolls will exceed the availability payment.

If the state ever wanted to terminate the arrangement, it could, but there would be a payoff cost, which could be around $1 billion, she said

The bill removed reference to the obligations incurred by the authority being the obligations of the state. Some people were uncomfortable with that language, though the authority still would have had to come back to the Legislature -- as it would, under the current version of the bill -- if more money were needed, McCarthy said.

Rep. Les Gara, D-Anchorage, expressed frustration in Thursday's hearing, saying the authority wasn't forthcoming in explaining the state responsibility. He said later that it has been difficult to get accurate information from the authority and that he worries about what the project ultimately could end up costing the state.

Associated Press