State and Federal Funding Contribute to 2020 Construction: Routine maintenance of public buildings continues to be deferred.

Author:Orr, Vanessa

It was a long and hard-fought battle, but when Alaska's state budget for FY2020 was finally approved this past August, things weren't quite as grim as they at first seemed. Still, there were some major cuts--the budget for FY2020, which began on July 1, 2019, was $390 million below the previous year's approved funding, with spending on capital projects down from $168 million in FY2019 to $144.3 million in FY2020.

The good news is that the majority of construction projects that take place in the 49th State are financed by federal funds; the bad news is that the state's general fund, which is used to provide matching money to move these projects forward, has been reduced. The general fund is Alaska's major source of discretionary funding and can be used to pay for government operations, basic services, and capital improvements. While most Alaska Department of Transportation and Public Facilities (DOT&PF) projects are federally funded, the state is still required to provide matching funds of around 9 to 10 percent.

Money for the routine maintenance of public buildings has also been decreased, which could have a lasting effect on properties far beyond this budget year.

According to Ben White, director of program development for DOT&PF, the majority of DOT&PF's infrastructure projects that are currently in progress are federally funded.

There are only a couple of General Obligation [GO] Bond-funded projects remaining, and most of these required some supplemental federal funding." he explains. "There are a couple of state-funded projects currently under development; however, this is a very small proportion of the overall project workload for the department."

According to White, DOT&PF anticipates moving approximately $482 million worth of highway projects into construction in federal FY2020.

"The state has more infrastructure needs than funding that is available, which means that we need to prioritize the infrastructure needs and find measures to reduce the overall project costs," says White, adding that DOT&PF is actively working to expedite project delivery as one method to reduce project costs.

"Since the majority of DOT&PF projects are federally funded, there are federal requirements regarding delays and cancellations that could pertain," explains White, adding that projects can be delayed for numerous reasons. "Projects have a set amount of time to advance to construction, and there are requirements for the state to reimburse federal funding...

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