Boondoggle Index – Knik Arm Bridge by the Numbers

April 11th, 2016

There are over $140 million in unobligated funds for the Knik Arm Bridge stashed away in past capital budgets that are now in play. Those federal and state funds can pay for approximately $275 million in transportation projects this construction season (state funds get an approximately 10:1 federal:state match). It’s time for the legislature to take those funds away from the KAC boondoggle and reassign them to this year’s capital budget for transportation projects.

Amount spent on Knik Arm Crossing (KAC) project from 2003 to June 30, 2015 1 : $101,166,523
Department of Transportation (DOT) estimated cost of approach roads, 2 lane no sidewalk bridge 2: $1.138 Billion
Number of times the US Department of Transportation has rejected KAC for low cost federal loan for 1/3 project costs of $380 million 3: 7
Number of construction permits KAC has obtained from NMFS, Army Corps of Engineers, and Coast Guard 4: 0
Percentage higher the Knik Arm Bridge and Toll Authority (KABATA) consultant projected growth in Mat Su population by 2040 versus separate estimates from the ADOL state demographer, UAA ISER, and McDowell Group 5: 60%
California-based traffic and toll firm accused in 2013 legislative audit of providing “unreasonably optimistic” traffic and toll revenue projections 6: CDM Smith
Firm that made “aggressive assumptions in your traffic and revenue study” cited in “suspending” further review of KAC loan request in 2/9/16 letter from by Chief Financial Officer of US Department of Transportation 7: CDM Smith
Amount KABATA paid to CDM Smith after the critical 2013 Alaska legislative audit resulted in KABATA promising a “fresh start” in paid statewide radio ads 8: $2,104,713.20
Minimum number of projects nationwide where actual traffic and toll revenue was about half of what CDM Smith had projected, resulting in projects that declared bankruptcy or had forced debt restructuring 9: 4
Population estimate by HDR for Point MacKenzie (west side of bridge) in 2035 Mat Su Transportation Plan 10: 7,177
Population estimate by KABATA/DOT for the same area in 2040 11: 37,074
Rank this 37,074 population would make Point MacKenzie in size of Alaska cities today 12: 2nd
Salary of KAC Project Director 13: $157,039
Salary of Governor 14: $145,000
Average daily vehicle traffic on 4 lane free Glenn Highway between Mat Su and Anchorage today 15: 30,460
Average daily vehicle traffic CDM Smith claims will fit on 2 lane tolled Knik Arm Bridge in 2046 16: 34,600
Amount of current and future state funds currently committed to Knik Arm Bridge that can now be transferred to other eligible Alaska transportation projects 17: $140,000,000
Estimated amount that DOT still needs in state funds for the 9% State match necessary to release the maximum amount of advanced federal construction funds 7/1/1618. 18: $25,000,000 – $40,000,000
Minimum amount of this match that could be put into Alaska economy this construction season if the Knik Arm Bridge were to be defunded now 19: $275,000,000
More highway work, ferry service, and jobs today versus more salaries and bogus studies tomorrow Priceless

Notes:

  1. http://knikbridgefacts.org/wp-content/uploads/2016/04/Attach_A_from_Aug_31_2015_KAC_to_TIFIA_Letter.pdf
  2. Pg 2. http://knikarmbridge.com/wp-content/uploads/2015/06/8.25.2015-Knik-Arm-Crossing-Project_Non-Rural-3.50-percent.pdf
  3. KABATA/DOT TIFIA Letter of Interest Loan Applications rejected in 2005, 2008, 2010, 2011, 2014, and 2016 p. 31 http://www.akleg.gov/basis/get_documents.asp?session=28&docid=8512. TIGER grants rejected 2010, 2011, 2012, 2014, 2016
  4. After several negative comments from the Army Corps of Engineers during the EIS process, KABATA first formally applied for Army Corps of Engineers 404 Permit in September, 2011-pg. 35 (pg 31 on the sheet) http://www.akleg.gov/basis/get_documents.asp?session=28&docid=8512. KABATA Board minutes since 2014 reflect staff predictions that NMFS permit expected “within months” “nearing decision”, and staff “hopeful.” NMFS permits necessary before Corps and Coast Guard permits. The permit was discussed at the most recent KABATA Board meeting on 11/11/15, but that meeting ended up being only a “discussion” because there were insufficient members for quorum.
  5. State Demographer Eddie Hunsinger Alaska Department of Labor has 166,338 people Mat Su in 2042 Pg. 33 http://laborstats.alaska.gov/pop/projected/pub/popproj.pdf; “Spliced” Number of 151,241 for Mat Su 2040 adopted by Anchorage Metropolitan Transportation Solutions (AMATS) Technical Committee from McDowell and ISER number- http://knikbridgefacts.org/wp-content/uploads/2016/04/PC_SE_Explanatory_Memo_v2_11_19_717_AM.pdf p. 4. KABATA/DOT has 207,888 people in Mat Su 2040-pg. 25 http://knikarmbridge.com/wp-content/uploads/2015/06/Attachment-C-AMATS-SE-and-TR-Presentation12-8-2014.pdf. Since population = traffic = tolls, the argument of how large the population will be and where it will be located is critical to understanding if bond payments can be made or, more likely, the future legislature will have a choice between whether the state defaults on bond payments or the legislature has to appropriate annually the amount necessary to make up the toll shortfalls.
  6. http://www.adn.com/article/20130407/audit-knik-arm-bridge-revenue-forecast-unreasonably-optimistic
  7. http://knikbridgefacts.org/wp-content/uploads/2016/03/TIFIA-Letter-to-AKDOT-20160209.png
  8. State Checkbook: http://doa.alaska.gov/dof/reports/ckbkonline_reports.html Detail By Vendor FY-2014-2016.
  9. Southern Connector (SC), San Diego Freeway (CA), Indiana Toll Road (IN), Pocahontas Parkway (VA) http://knikbridgefacts.org/wp-content/uploads/2013/12/13-11-27-Bloomberg-20131127122836.pdf and http://usa.streetsblog.org/2014/11/18/the-indiana-toll-road-and-the-dark-side-of-privately-financed-highways/ KABATA also paid Los Angeles, California law firm Nossaman LLP $1.4 million for legal work (p. 488 http://doa.alaska.gov/dof/reports/resource/vn_detail_fy12.pdf) on the failed “public-private partnership” finance plan before KABATA gave up on the P3 model to finance the project and moved to a direct state funding. The Nossaman firm also put together the Texas State Highway 130 project which went bankrupt last month https://www.texastribune.org/2016/03/02/sh-130-toll-road-files-bankruptcy/. Nossaman did the legal agreements for the now bankrupt Indiana Toll Road and San Diego Freeway projects.
  10. http://knikbridgefacts.org/wp-content/uploads/2016/04/Handouts-w-Truncated-Traffic__Hwy_Manual.pdf
  11. http://knikbridgefacts.org/wp-content/uploads/2016/04/Handouts-w-Truncated-Traffic__Hwy_Manual.pdf
  12. http://www.geonames.org/US/AK/largest-cities-in-alaska.html
  13. http://doa.alaska.gov/dof/reports/resource/ctep/2015_comp.pdf
  14. https://ballotpedia.org/Alaska_state_government_salary
  15. Look at Eklutna Flats on this map: http://dot.alaska.gov/stwdplng/transdata/traffic_AADT_map.shtml
  16. Table 5-13 p. 158 http://knikarmbridge.com/wp-content/uploads/2015/06/Comprehensive-TR-Study-for-the-Knik-Arm-Crossing-Project-September-30-2015-No-Appendices-Compressed-v.4.pdf
  17. $136 M in federal Bridge funds unobligated as of and $5 M in General Funds as of 2/3/16 see pg.566, 767, 768, and 814 https://www.omb.alaska.gov/ombfiles/17_budget/PDFs/CASR/Capital_Appropriation_Status_Report_2-2-16.pdf
  18. DOT has refused to identify this amount in response to legislative inquiries but a DOT source has suggested this range.
  19. $136 M in federal Bridge funds unobligated as of and $5 M in General Funds as of 2/3/16 see pg.566, 767, 768, and 814 https://www.omb.alaska.gov/ombfiles/17_budget/PDFs/CASR/Capital_Appropriation_Status_Report_2-2-16.pdf which combined with General Fund operating funds for FY 16 and FY 17 that can also be used as 9% state match of advanced federal construction funds available on 7/1/16. Total approximately $275 M.