MEMORANDUM

TO: Gary Superman, Assembly President

Members, Kenai Peninsula Borough Assembly

THRU: Dale Bagley, Mayor

Scott Holt, Finance Director

FROM: Gary Davis, Roads Director

DATE: May 5, 2005

SUBJECT: Resolution 2005-044______

Funny River Bridge

The State of Alaska has received a $5,000,000 congressional earmark to begin the Funny River Bridge Project. The Alaska Department of Transportation and Public Facilities ("DOT") has requested that the Kenai Peninsula Borough accept the administration, management and ownership of this project.

The funding requires a 20 percent local match of the total amount of $6,250,000, which equates to $1,250,000. DOT has offered to provide half of the local match if the KPB would assume ownership and maintenance of the roads connecting the bridge to the Sterling Highway and Funny River Road.

This resolution is provided to give the administration direction on how to proceed with the DOT request. Key considerations relating to this project include:

1. The local match amounts. If the DOT offer is accepted, and the borough accepts the connecting roads into the borough road maintenance system, then the local match will total $625,000. But $6,250,000 may not be enough to finish the project: we have seen estimates of over $11,000,000. If the actual cost exceeds this appropriation and local match, where the remaining funds come from must still be determined, especially any additional necessary matching funds.

2. The "connecting roads" that the state is requesting the borough take over are Huske Street on the Sterling side, and Spring Street on the Funny River side. Improvements to these roads will be part of the project costs. (1) Huske Street will need some major improvements since it is currently a narrow road, and it intersects Scout Lake Loop Road at a dangerous curve and on the side of a slight hill. (2) Spring Street is currently not constructed, and would be over one-half mile from Funny River Road.

3. An Environmental Impact Statement (EIS) was completed in 1997 and will need to be updated. This process will be an added unknown expense to the project. Earlier provisions appeared to contain strict land-use requirements on the Funny River side riverfront properties.

4. Where will the remaining funds come from to complete the project? It is unknown how much of the $5,000,000 will need to be expended on the consulting and EIS phases. The actual construction of the bridge has been estimated at near $11,000,000, and there are other potential costs including expenses for the connector roads and the EIS update.

The Road Service Area board has discussed this DOT request and has indicated it wants the state to manage the project. The state DOT has spent funds over the past several years on the project, and is best suited to lobby and secure any additional funds. The RSA board supports the project as a borough priority, but believes it is best handled by the state. The RSA board has not yet taken an official position regarding funding the project but expects to consider it at its May 10, 2005 meeting. The state has indicated this project has been a STIP nomination for several years and does not score well under the STIP scoring criteria. This lack of score points makes it ineligible for federal funding under the STIP process.

The resolution is to provide the borough administration some direction in further negotiations with the state DOT. The key questions are:

1. "Should the KPB accept the Funny River Bridge as a KPB owned and managed project?" and

2. "If so, under what conditions?"

To the best of the administration's knowledge, future funding needed to complete this project has not been broached by any entity as of this date.

The resolution is stated in the "positive." Should this resolution not be approved, the outcome of the $5,000,000 earmark will be left up to the DOT.