Money appears to be available for Wrangell’s Byford yard cleanup that would allow remaining contaminated soil to be shipped off-island rather than disposed of in a local monofill.
At the behest of Gov. Bill Walker, the Alaska Legislature approved $5 million of additional funding to be allotted to the project in its FY19 capital budget. A capital and operating budget had both been passed by the Alaska House and Senate on Sunday, bringing to an end their extended session.
Sen. Bert Stedman (R-Sitka) noted it was the first year in a while the regular session had come to an end without any special sessions lined up to follow. In previous years, lawmakers had been called back to Juneau multiple times to take up additional items.
Taken together, the $10.4 billion budget still needs to be signed by Walker before it can take effect on July 1, when the new fiscal year starts. He has 20 days to do so once the package has been submitted to his desk, giving his office time to review its contents. While the governor has the option to veto or reduce individual items, in light of Walker’s support for the additional funding for Byford it was not expected the amount would be changed further.
The additional funds will be added to those currently apportioned to the cleanup’s second phase, which involves removal of around 18,300 cubic yards of lead-contaminated soil removed from the decommissioned junkyard. The soil had been chemically treated to prevent the further leaching of its lead content, but lingering concerns among residents about the wisdom of storing the material within a fifth of a mile from the Pats Creek system convinced the managing Department of Environmental Conservation to support further funding for its complete removal by barge.
Rather than provide the requested resources from the state’s general fund, legislators directed the DEC to draw from its oil and hazardous substance release response fund, an account capped at $50 million that is maintained by a share of oil production surcharges. The fund was already tapped for Wrangell’s Byford project, cleanup of which in 2016 cost around $6 million. Transport for the remaining material was expected to cost more than $9 million, above the $5.5 million instead approved for constructing the monofill.
The majority of projects financed by the fund deal with oil or other petroleum-based spills around the state, though contaminants like the lead at Byford also fall under appropriate use. DEC director of administrative services Jeff Rogers explained that, while contained at this point, the Byford cleanup still fit the intent of the response fund.
Project leads assigned to the project are currently updating cost estimates to transport the material to Oregon for final processing. Depending on whether newly allotted and remaining funds would together cover the total cost, more funds may still be required to complete the cleanup. Depending on how much money may be required, Rogers said DEC would likely approach the Legislature for approval.
“It will depend on how significant the delta is,” he said.
On the state of the response fund itself, chief budget analyst Neil Steininger for the Office of Management and Budget explained it would not be directly reimbursed for the additional withdrawal. It would be replenished over time with its proportion of production surcharges, which Rogers estimated averaged out to around $1.5 million per year.
While the City and Borough Assembly had remained largely ambivalent to the fate of the soil, issuing a resolution favoring either its transport or designation into a monofill last week, Wrangell Cooperative Association had been expressly against the monofill. Meeting with the lieutenant-governor and DEC leadership since the project was put on hold last August, it had helped mobilize the turnaround in direction.
“The WCA is happy the state allocated $5 million to ship the lead-contaminated soil off island,” tribal administrator Esther Ashton conveyed in a statement, following news of the additional funding. WCA was appreciative of the state’s assistance in reaching this conclusion, and was hopeful for the future.
“In 100 years our great-, great-grandchildren will not have to worry about monthly monitoring of a lead-contaminated monofill so close to Pats Creek. They will not have to take water samples to determine if lead and phosphates are leaching into our fish streams,” Ashton said.
With the passage of the new budget, changes to Alaska’s Permanent Fund are also at hand. Legislators found common ground on calculating a percentage of the $65 billion sovereign wealth fund’s earnings that could be withdrawn without harming the principal, to be used to reduce the state’s substantial spending deficit.
“We made quite a bit of progress in using the percent-of-market-value approach,” said Stedman.
Based on a five-year average value, the percent of the draw would start at 5.25 percent for the next couple of fiscal years, to be divided between dividends and agency spending. A proponent of a smaller, 4.5-percent draw, Stedman noted the percentage could be reduced as needed at the behest of the Legislature.
The money yielded by the fund would bring the state deficit down to around $700 million, according to estimates by Walker’s office. The draw would yield an estimated $2.8 billion for next year, of which around $1 billion would be used for individual dividends, or around 36 percent.
“I think that should be 50-50,” Stedman commented.
In future, he would like to see the fund’s earnings reserve protected from legislative overreach. Stedman expects a concept to that effect to be put to the public later this year, with the hopes of having an item on the ballot by 2020.
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