Juneau can’t afford decisions driven by momentum

Angela Rodell. (Mark Sabbatini / Juneau Independent)

By Angela Rodell

As an investor, one of the hardest decisions is not choosing what to buy but deciding when to walk away. That becomes even harder when an investment is underwater — when the numbers no longer support the original thesis, the timeline has slipped and the cost continues to grow. At that point, the challenge is no longer analytical. It is emotional.

Over the course of my career in public finance and institutional investing, I have seen this pattern repeatedly. Past effort starts to justify future spending, even when the facts change. But experience teaches a simple lesson: time and money already spent are not reasons to keep going. Markets shift, assumptions break down, and risks emerge. When that happens, discipline requires reassessing the plan and, if necessary, redirecting resources. The ability to pivot is not weakness. It is judgment.

That same discipline is just as important in public decision-making as it is in investing. In recent years, the Assembly has advanced several major projects that share a troubling pattern: early cost estimates that proved too optimistic, changing scopes and decisions that continued forward even as price tags climbed. Each project can be explained on its own, but together they raise a larger concern about whether sufficient due diligence is being done before commitments are made — and whether the city is holding the line once costs begin to rise.

Consider a few examples.

The Eaglecrest gondola was once discussed as a project costing less than $9 million. Current estimates are closer to $37 million, driven largely by needs that were not fully accounted for at the start.

The new City Hall in the Burns Building was initially presented as roughly a $14 million solution. The current cost is about $20.5 million, including $10.2 million for the purchase of two floors and another $10.3 million in remodeling costs and reserves, with no clear cap in sight.

Telephone Hill began as a roughly $2 million planning effort and now carries projections exceeding $40 million when demolition, road construction, and the feasibility gap for housing are included. Regardless of one’s position on the project, the scale of the change illustrates how far initial assumptions can drift. The same pattern can be seen in discussions around the Capital Civic Center, Pederson Hill, and a growing list of park and playground proposals.

None of these projects were pursued with bad intentions. Each addressed a real goal — housing, recreation, civic space, or economic development. But good intentions do not replace rigorous financial analysis, and optimism does not substitute for discipline.

At the same time these projects have grown more expensive, the city faces core infrastructure obligations that are neither optional nor deferrable. Water and wastewater systems need significant upgrades, with costs in the tens of millions. Flood mitigation in the Mendenhall Valley could require hundreds of millions over time. The community is also discussing a long-term landfill replacement that could approach well over $100 million.

When viewed together, the numbers are striking. The potential $40-plus million cost of Telephone Hill, combined with the money committed to the gondola and the new City Hall, would by itself go a long way toward covering the cost of a long-term waste disposal solution. That does not mean those projects have no value, but it does show the scale of the trade-offs. Every major decision limits what can be done next.

These are the kinds of choices that require careful prioritization, and that is where the current approach feels out of balance. When residents hear there is not enough money to address flooding risks, landfill capacity, or basic infrastructure, yet see repeated cost increases on discretionary projects, the result is not simply disagreement — it is a loss of confidence. People begin to question whether priorities are being set based on need, or based on momentum.

Strong governance requires more than approving projects. It requires asking hard questions before commitments are made. Are the cost estimates realistic? What are the risks if prices rise? What happens if revenues fall? How does this project rank against other needs? What will not get funded if this moves forward?

Those questions are not signs of opposition. They are signs of stewardship.

We are entering a period where financial discipline will matter more, not less. Every major decision carries opportunity costs that will be felt for years, and the margin for error is getting smaller.

Juneau does not need fewer ideas. It needs stronger due diligence, firmer cost control, and clearer prioritization. The community deserves leadership willing to ask the hard questions early, hold the line when costs grow, and focus first on the needs that matter most — and when the facts change, to have the judgment to pivot rather than continue simply because a project has already begun.

• Angela Rodell is a former CEO of the Alaska Permanent Fund Corp. and commissioner of the Alaska Department of Revenue who is currently a business consultant and member of Juneau International Airport’s board of directors. Her column appears the second Tuesday of every month.