Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

A proposal to improve Lutak Road in exchange for transferring three roads to the Haines Borough has shed light on a state program that favors projects that shift costs onto municipalities.

The state selects community transportation projects through a competitive application process with a bias for proposals that involve transferring state-owned facilities to local governments. The Alaska Department of Transportation (DOT) likely wouldn’t widen Lutak Road if Haines didn’t agree to acquire state roads, like Piedad, Comstock and possibly Allen-Menaker, DOT planner Marie Heidemann told the CVN.

The state’s policy of transferring ownership of facilities to municipalities is not unique to Haines. The state views it as a way to cut costs and even the playing field among municipalities, some of which have more state facilities and fewer local obligations than others. But the issue is concerning to Alaska Municipal League (AML) executive director, Nils Andreeassen, who said he has heard frustration from other municipalities who face taking on state obligations.

“For one, I don’t think this can just be approached as a way to save the state money, especially as what’s suggested means local governments potentially having to increase their tax revenue to take on those costs,” Andreassen wrote in an Oct. 29 email to DOT in response to a draft of the state’s updated long-range transportation plan, which outlines the policy of shifting facility costs to municipalities. “What this document is saying is that instead of the state taxing residents for these expenses, the state’s policy is to require local governments to do it.”

In Haines’ case, officials have expressed interest in improving Lutak Road – which they say has experienced an increase in traffic, particularly from cyclists and other tourists headed to Chilkoot Lake State Recreation Site — and in exchange the state is proposing to transfer neighborhood roads to the borough. The project would be administered through a selective funding program for transportation improvements called the Community Transportation Program (CTP).

For about a decade, CTP has been the main avenue for DOT to improve state-owned roads that aren’t part of the national or state highway system, according to state officials. (With the passage of the federal infrastructure bill last year, DOT spokesperson Shannon McCarthy said the state now has new programs to fund community transportation projects.)

Under CTP, the state solicits community project proposals every three years. Projects are scored and ranked by an evaluation board consisting of DOT officials, including a deputy commissioner, statewide director of design and engineering and regional directors, or their designees. Heidemann said DOT has received about 200 letters of intent this cycle, but not all will necessarily be submitted as final applications.

Likely only between 10 and 20 projects will be selected, depending on the size and cost of each, Heidemann said. Thirteen were chosen last time. There is a pot of up to $120 million available for the current cycle.

A project scores higher if it includes a commitment from a local government to take over ownership or maintenance of a state facility. Heidemann said the Lutak improvement project would not be competitive without the proposed transfer of state roads to the borough.

“We kind of need these extra points to get this project up to a place where it’s compelling,” she said. “I simply don’t think it would score well without this (exchange).”

She added that the Lutak proposal is in a preliminary stage and details are subject to change. Borough manager Annette Kreitzer said the planning commission and borough assembly need to approve the plan before it moves ahead.

In addition to community proposals, the state also submits its own project ideas to be scored and possibly awarded through CTP. Heidemann said if DOT receives borough support it intends to sponsor the Lutak project, including the road exchange, as one of four nominated in the region and 12 statewide.

Heidemann said DOT typically wouldn’t widen a road like Lutak without an exchange “because our funding is limited.” She said the state does routine maintenance, like resurfacing, on its own.

To cut costs, one of the state’s 13 criteria for scoring CTP projects is whether, and to what extent, municipalities agree to take over ownership and maintenance of either the state facility that’s being improved or a facility that incurs similar costs. The more M&O (management and operations) costs a municipality takes on, the higher mark it gets, according to the scoring rubric published on DOT’s website.

“Some communities have declined to take on maintenance and ownership responsibility, and still enjoy state ownership and maintenance of roads that primarily serve the local population. These communities essentially get a subsidy that other communities do not,” DOT’s list of criteria for the last CTP cycle said.

The state’s 2036 long-range transportation plan, which was adopted in 2016, lists as a DOT action priority: “collaborate with local units of government…to transfer state-owned and/or state-maintained local facilities that have no regional or statewide function to local ownership and local financing mechanisms.”

The plan says doing so “will ensure greater equity between communities” because some communities have more state-owned facilities than others.

The same priority appears as a policy under “funding and financing” on a draft of the state’s 2050 long-range plan, which has yet to be approved.

In public comments on the draft plan, the Alaska Municipal League noted “the potential for objection by local governments to the policy…to transfer ownership and maintenance responsibilities to local governments.”

AML director Andreassen suggested moving the priority to the “strategic partnerships” section of the long-range plan, rather than keeping it as a financial solution for the state. “It’s something we need to spend more time to understand both from a local and a state government perspective and that’s something we might work on over this coming year,” Andreeasen told the CVN.

State Sen. Jesse Kiehl said AML has “very rightly kept an eye on this because sometimes in our history DOT has tried to shunt its obligations onto local governments.” But Kiehl said those obligations were “big arterials that deserve and ought to be state roads” — not the kind of neighborhood roads that DOT would give to Haines in exchange for improving Lutak.

He said DOT and municipalities often negotiate deals in which the state brings a local road up to a higher standard and transfers it to a municipality, as would be the case if Haines and DOT moved ahead with the Lutak exchange, borough officials said at the last assembly meeting.

“This happens throughout the state. It really has to be a negotiated deal,” Kiehl said.

Petersburg is currently negotiating a deal with the state that would involve taking over the dock and floats at Papke’s Landing. Petersburg Borough manager Steve Giesbrecht said the issue has been discussed for several years.

“The state really doesn’t want (the facility). So we approached them at one point about trying to get ownership of the dock. They were willing to pay a certain amount of money, but it was never enough to truly fix the dock,” Giesbrecht said. “I’ve come to the conclusion the state was never going to fix it.”

Now Petersburg is in talks with both DOT and the Alaska Department of Natural Resources to acquire tidelands and uplands along with the infrastructure, which would enable the municipality to develop the site, Giesbrecht said. Although that project isn’t going through CTP, Giesbrecht said it aligns with a broader history of the state transferring ownership and maintenance costs of facilities like harbors to municipalities.

He said he is “happy” with how discussions are going with the state and that “we’re both getting something out of it.”

Still, he said, “In a perfect world, the state would still own (the dock and floats) and run them and have kept them in a decent state.”

Haines Borough Mayor Douglas Olerud said he could see why DOT thinks the three local neighborhood roads the state could exchange for improving Lutak should be under borough control but that if they were transferred he would want DOT to upgrade them. He said DOT approached borough officials last April to inform them about the funding program and ask about the borough’s needs.

“I don’t feel any pressure. They told us right at the beginning we don’t have to do any of this,” Olerud said. “We have freedom to negotiate and freedom not to do it.”

But Olerud called it “frustrating” that the state gives points to projects that include shifting costs onto local governments. “If a (state) road gets to a certain state, the state should fix it,” he said.

The CVN has requested records from DOT showing how past CTP projects were scored but did not receive them before press time.