Anchorage Daily News: Anchorage Assembly votes to secure expanded port terminals, financed partially with higher tariff

Members of the Anchorage Assembly, with the backing of Mayor Dave Bronson’s administration, passed two important measures this week related to the modernization project at the Port of Alaska.

The first ordinance affects the design of the port’s two cargo terminals, which are on track to be built out for maximum utilization in the coming decades. The second vote increased tariffs charged for products coming into the port, with the extra money intended to go specifically toward the modernization project and ensure greater financing options, as officials continue pulling together funds for the infrastructure overhaul from a range of sources.

Taken together, the measures are two big steps forward for longstanding efforts to overhaul the eroded and outdated port, through which flow enormous volumes of the fuel, food and supplies that Alaskans depend on.

“It is important to note that the port has tried to work through a modernization program for many years, and this is a huge milestone in that process,” said Assembly Vice Chair Meg Zaletel, who represents Midtown and has worked closely on port-related ordinances.

The design measure that passed on Tuesday clears the way for both cargo docks to be the same width and built to accommodate 100-gauge cranes to offload vessels, as well as ships configured for “roll-on, roll-off” loading that typically happens by moving containers and material off on the backs of trucks.

That more versatile design was not a given. Initial proposals would have made the second dock terminal skinnier, unequipped for cranes and only capable of handling roll-off loading, which would have cost around $200 million less. Port officials, as well as a design advisory board, pushed for the expanded model that, while more costly, will be able to handle a wider range of vessels in the decades to come, particularly if different shippers or cargo operations want to start using the port.

“The modified cargo dock design, as proposed, accommodates the current fleet and provides flexibility to service additional and larger vessels in the future,” reads a memorandum submitted with the ordinance from the Bronson administration, which has supported the expanded concept.

However, Tuesday night’s vote does not finalize that full concept. It locks in plans for the first terminal and punts the decision to commit to the uniform design for the second dock terminal until after the Assembly gets detailed cost projections from the engineering firm working on the project. If there are no major unforeseen cost overages turned up in that analysis, the Assembly is likely to green-light the expanded design.

“The administration and the (Design Advisory Board) believe it is in the best interest of the public that both terminals be constructed with a continuous and contiguous dock face,” the memorandum states.

The second measure approved Tuesday goes toward paying for that work, which will take years more planning, fundraising and construction to be completed. The current timeline for the modernization project forecasts it will be fully completed in 2032. It is expected to cost in the neighborhood of $1.9 billion, though most involved in the modernization efforts admit that such figures are crude estimates at best.

After four public meetings in 2022 by the Anchorage Port Commission, members voted to approve a temporary surcharge on top of the port’s tariffs. The additional money collected from the revised fee structure will go specifically toward costs associated with the port’s modernization upgrades, although that includes a wide array of targets, including paying off existing debt associated with the project.

Those increased tariffs will be passed on to consumers, though proponents have said the cost impacts will be minimal, particularly compared to pressures from variables like inflation and fluctuations in energy prices.

The funds collected from that seven-year surcharge give the municipality more flexibility in financing future costs and construction work, either by giving local officials more capacity to bond for the money, or by serving as a cash reserve to access federal or state matching funds.

Bronson and the Assembly have been largely in lockstep when it comes to the Port of Alaska, presenting a united front to state lawmakers and the congressional delegation in requesting funds. Those efforts have been fruitful. In 2022, the Legislature approved $200 million in capital budget funds for the project, although half of those funds will be available only if the municipality can secure match contributions. That same year, Alaska’s U.S. Sens. Lisa Murkowski and Dan Sullivan announced $68.7 million in funds for shoreline realignment and demolition of old sheet pile walls at the port, money that came from the bipartisan infrastructure bill introduced by the Biden administration and was supported by both senators.

“Safeguarding Alaska’s most important piece of infrastructure is the top priority for my administration,” Bronson said after the Assembly approved the measures.

This winter, after seeing the cost estimates for alternative designs, the Assembly will vote on the final plans for the second cargo terminal dock.

By:  Zachariah Hughes