Governor Dunleavy wants to tie $175 million in funding to the ports of Anchorage and Mat-Su. It can be a tough sell.

Governor Mike Dunleavy is proposing an infusion of funds to shore up the bustling Alaskan port of Anchorage, but tied to the nearly dormant port five miles across Knik Arm in Governor’s home base of Mat-Su

The Dunleavy administration suggests the Municipality of Anchorage and the Borough of Matanuska-Susitna consider forming a new regional port authority to decide how to spend $175 million in general obligation funds for needed repairs to the of them.

The so-called Knik Arm port infrastructure project currently accounts for nearly two-thirds of a larger $325.1 million statewide GO bond package, Dunleavy included in a proposed state budget unveiled in December. Any package is subject to review and approval by the Legislative Assembly before being presented to voters in November.

The port’s early-stage funding proposal is already encountering challenges: no port authority exists, there are no immediate plans for the Anchorage and Mat-Su assemblies to discuss it, and the idea general is already raising questions among key lawmakers.

The Dunleavy administration simply met with Borough of Mat-Su and City of Anchorage officials to encourage them to explore the viability of a Port Authority, Governor spokesman Jeff Turner said in a statement. e-mail, adding that the final decision rests with the borough and the municipality.

But it’s not entirely clear how the Port of Alaska would benefit from the relationship, many people interviewed for this story said.

[New Alaska rail line just ends in a forest after consuming $184 million]

Mayor Dave Bronson has no immediate plans to present the Port Authority idea to the assembly, although he may in the future, Bronson’s spokesman said on Friday. , Corey Allen Young.

The mayor is awaiting more information from the governor’s office, Young said.

“Obviously he wants to do his due diligence and get a study done,” he said. “He wants to look at all the options before he dives into this with the assembly. We don’t even know what that means yet.

Anchorage assembly leaders said a reporter’s call Friday was the first they’ve heard about the proposal. The assembly had not been informed of the concept on Friday, according to President Suzanne LaFrance.

The global bond package is part of early budget talks in Juneau. Last week, lawmakers raised questions about passing a large bond package — and deep debt — when federal infrastructure funds are expected to start flowing to Alaska.

Specifically, the idea of ​​a Knik Arm port centered around a regional authority that does not yet exist raises red flags even among members of the Mat-Su caucus.

State Sen. Mike Shower, a Republican from Wasilla and vice chairman of the Senate Transportation Committee, balked at the governor’s port funding mechanism during a committee hearing Thursday.

A port authority that doesn’t exist can’t spend money, Shower said, adding that the governor’s funding idea also risks increasing existing tensions over funding between the two ports.

“Not a good idea, guys,” he said. “We need something different from that.”

Both parties need help. Anchorage’s handles nearly all of the cargo shipped to Alaska, but is in dire need of repairs. At Mat-Su, the port sees no large vessel traffic and over the past two years has run $400,000 into the red.

According to budget documents, work funded by the port package could include repairing and rebuilding the Port of Alaska; facilities to improve passenger service, including cruise ship berthing and to provide shore services to visitors; Development and modernization of MacKenzie Harbour; and work on a rail extension of the Alaska Railroad’s main line to Port MacKenzie.

The proposal does not include a specific allocation between the ports but rather encourages the two to coordinate infrastructure needs instead of dealing with them separately, according to legislative testimony from Neil Steininger, director of the Office of Management and Budget of the State.

Mat-Su district officials said they met with the governor’s office and discussed the idea of ​​the regional port with the district assembly during a special meeting earlier this month.

The assembly expressed interest in exploring the concept, which Borough Manager Mike Brown called a way to better leverage future federal infrastructure investments by presenting a unified front instead of two competing entities.

“For the borough, Port MacKenzie has been underperforming for years. It’s not a secret. We want to see opportunities there,” Brown said.

The Port of Mat-Su has no revenue or activity “nearby” Anchorage, but does have potentially valuable assets like real estate, he said. “I think a broader conversation around this could be helpful. I think this idea that we’re trying to get away from is that it’s competition, or it’s one taking away the other.

The future of the long-troubled Mat-Su port has been a source of scrutiny for years. A rail line extension intended to boost business stalled more than five years ago and now remains nearly $200 million short of completion. A ferry intended to transit between the port and Anchorage was finally sold in 2016 after never making a single trip – and cost more than $12 million.

Port of Alaska, the state’s main conduit for essential supplies distributed throughout the state, has been in dire need of repairs and design improvements for decades, in part due to Cook’s extreme tidal conditions. Inlet that crush piles causing corrosion of crucial metal supports.

The municipality is already asking the Legislature for $600 million and approved a $165 million revenue bond earlier this month, according to Young.

Port MacKenzie was built in 1999 to specialize in resource exports that did not materialize. Only 14 large ships have called since 2002. About 250 barges have docked during that time, carrying everything from vehicles and heavy equipment to timber and steel, and providing the bulk of the port’s current revenue, according to port manager Therese Dolan.

Like Anchorage, the Port of Mat-Su faces constant maintenance needs due to harsh tidal conditions. A conveyor damaged by the earthquake and built for a former woodchip company is now under the responsibility of the borough.

The Dunleavy administration is interested in forming a port authority at Knik Arm because it could establish “coordination in planning and operations that improves the efficiency of both ports,” Turner said in an email Friday.

“If Port of Alaska and Port MacKenzie had a joint management plan in place, it could result in a more reliable flow of cargo to Alaska, including greater food security, especially if a natural disaster had to happen,” he also wrote.

Pressed to worry about the lack of an established port authority, he said the governor was simply encouraging both sides to consider the viability of this structure.

If the legislature approves the bond and it is approved by voters, the money could still be appropriated with or without a port authority, Turner said.

The port proposal, along with the larger bond package, is just beginning to go through the legislative process in Juneau.

Tally Teal, chief of staff to House Finance Committee Co-Chair Rep. Kelly Merrick, R-Eagle River, said the port proposal raised some early concerns. The committee will work with the Office of Management and Budget to “work out the details,” Teal said, as part of the broader budget review.