Legislature(2011 - 2012)BUTROVICH 205

04/12/2011 03:00 PM Senate COMMUNITY & REGIONAL AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Location Change --
-- Meeting Rescheduled from 4/11/11 --
+ HJR 17 WATER & WASTE WATER REGULATION TELECONFERENCED
Moved CSHJR 17(CRA) Out of Committee
+ HB 197 HOME ENERGY RATING SYSTEM TELECONFERENCED
Moved CSHB 197(FIN) Out of Committee
+ HJR 27 RELOCATE COASTAL VILLAGES REGION FUND TELECONFERENCED
Moved HJR 27 Out of Committee
          HJR 27-RELOCATE COASTAL VILLAGES REGION FUND                                                                      
                                                                                                                              
3:19:01 PM                                                                                                                    
CHAIR OLSON announced the consideration of HJR 27.                                                                              
                                                                                                                                
3:19:14 PM                                                                                                                    
REPRESENTATIVE  PAUL  SEATON,  sponsor   of  HJR  27,  said  this                                                               
resolution supports  "Alaskanizing" the fishing  fleet, including                                                               
the large vessels  that operate in the Bering Sea  and within one                                                               
of the  six Community Development  Quota (CDQ) groups.  These CDQ                                                               
groups were established to give  communities along the Bering Sea                                                               
access  to the  fisheries resource.  The Coastal  Villages Region                                                               
Fund (CVRF) is  the largest CDQ group with a  341 foot Bering Sea                                                               
Pollack trawler,  four 100 plus  foot crab boats, seven  100 plus                                                               
foot ground  fish vessels  as well as  smaller tenders  and other                                                               
vessels. The homeport  for this fleet has been  Seattle, but CVRF                                                               
made a decision to find a  homeport in Alaska. The City of Seward                                                               
has  what the  fleet  needs including  an  ice-free port,  upland                                                               
space  for development,  the Alaska  Vocational Technical  Center                                                               
(AVTEC) training facility, and a  large vessel lift facility. HJR
27 supports  the return  of this private  industry to  Alaska and                                                               
hopefully it  will bring economic  development to from  Seward to                                                               
Anchorage.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  SEATON noted  that the  packets contain  numerous                                                               
expressions of  support for the  resolution and  bringing private                                                               
industry jobs to Alaska.                                                                                                        
                                                                                                                                
3:22:19 PM                                                                                                                    
CHAIR OLSON  asked why  the CVRF initially  made the  decision to                                                               
homeport in Seattle.                                                                                                            
                                                                                                                                
REPRESENTATIVE SEATON replied Seattle  had long all the necessary                                                               
facilities  in one  place,  including road  and  rail access  and                                                               
sufficient dock  space. In anticipation of  becoming the homeport                                                               
for the  CVRF fleet,  Seward did a  preliminary analysis  to make                                                               
sure  it had  sufficient  dock space.  In  addition, the  capital                                                               
budget allocates $400,000 to do a more detailed economic study.                                                                 
                                                                                                                                
CHAIR OLSON  asked if he  had an idea of  what it might  cost the                                                               
community of Seward to be able to handle these large vessels.                                                                   
                                                                                                                                
REPRESENTATIVE SEATON  replied the detailed facility  design will                                                               
give the economic analysis.                                                                                                     
                                                                                                                                
CHAIR OLSON asked who will maintain this large facility.                                                                        
                                                                                                                                
REPRESENTATIVE SEATON  replied it  will probably  be the  City of                                                               
Seward.                                                                                                                         
                                                                                                                                
3:25:15 PM                                                                                                                    
CHAIR OLSON asked  if the City of Seward would  look to the state                                                               
for  operating   capital  if  it  had   trouble  maintaining  the                                                               
facility.                                                                                                                       
                                                                                                                                
REPRESENTATIVE SEATON  said he hopes  the facility will  be built                                                               
to a standard  such that major maintenance  wouldn't be necessary                                                               
for 15-20 years.                                                                                                                
                                                                                                                                
CHAIR  OLSON asked  what adverse  effects the  large vessels  and                                                               
increased traffic will have on the smaller vessels.                                                                             
                                                                                                                                
REPRESENTATIVE SEATON  replied that  shouldn't be a  problem; the                                                               
large vessels will be located on  the east side of the bay across                                                               
from Seward. At  this point there is no intention  to place these                                                               
large vessels inside the municipal  boat harbor. He added that he                                                               
doesn't foresee a traffic problem.                                                                                              
                                                                                                                                
CHAIR  OLSON asked  if he'd  sought  comment from  the local  CDQ                                                               
group.                                                                                                                          
                                                                                                                                
REPRESENTATIVE SEATON answered yes. He  offered to provide a copy                                                               
of  the  video presentation  CVRF  made.  This  will be  a  great                                                               
economic  development for  not  just Seward  but  also the  Kenai                                                               
Peninsula to Anchorage.                                                                                                         
                                                                                                                                
CHAIR OLSON asked when the actual move will take place.                                                                         
                                                                                                                                
REPRESENTATIVE SEATON replied 2014 is the timeline.                                                                             
                                                                                                                                
3:27:38 PM                                                                                                                    
SENATOR WAGONER  asked how  much of  its own  money the  CDQ will                                                               
invest and if that would be  enough to ensure that CVRF will stay                                                               
in Seward.                                                                                                                      
                                                                                                                                
REPRENTATIVE SEATON  replied that's  a question  for the  CDQ but                                                               
there  has been  talk about  contractual obligations  to use  the                                                               
facilities over time.                                                                                                           
                                                                                                                                
3:28:43 PM                                                                                                                    
PHILLIP OATES,  Manager, City of  Seward, informed  the committee                                                               
that the  CDQ groups  were formed  as a  result of  the Magnuson-                                                               
Stevens Act. The vision in the  '70s was first to Americanize the                                                               
foreign-dominated fishing fleets. Second, it  was to give some of                                                               
the  fishing quota  to the  communities that  surround the  prime                                                               
fishing areas  of the Bering  Sea. Third,  it was to  allow those                                                               
communities  and development  groups to  reinvest their  earnings                                                               
into  the  fishing  industry   through  training  and  education.                                                               
Finally, the vision was to  "Alaskanize" the fishing fleets. That                                                               
is the current focus.                                                                                                           
                                                                                                                                
Responding to the  question about why the CVRF  vessels have been                                                               
homeported  in Seattle,  he explained  that the  location of  the                                                               
homeport  is an  owner's decision  and the  CDQ groups  initially                                                               
didn't own  their vessels.  The Coastal  Villages Region  Fund is                                                               
the most  successful of  the six  CDQ groups  in terms  of vessel                                                               
ownership and  as owner they  made the decision to  leave Seattle                                                               
and homeport  in Alaska. Mr.  Oates opined that this  is probably                                                               
happening  sooner  than  those  initial  visionaries  thought  it                                                               
would.                                                                                                                          
                                                                                                                                
Responding to  the question about  cost, Mr. Oates said  the City                                                               
of  Seward  has paid  for  the  initial engineering  concept  and                                                               
economic  analysis and  has  received input  from  the U.S.  Army                                                               
Corps  of Engineers.  The  project appears  to  be economic.  The                                                               
$400,000   capital  appropriation   is  to   complete  both   the                                                               
engineering concept and economic  analysis before committing more                                                               
money to  the project. At  this point  the rough estimate  of the                                                               
cost is  approximately $34 million.  That builds on  the existing                                                               
$70 million infrastructure on the  east side of Resurrection Bay.                                                               
He noted that  there are two additional phases to  the project if                                                               
the remaining five CDQ groups move  to Alaska. The City of Seward                                                               
would maintain  the infrastructure, just  as it does now  for the                                                               
existing  industrial area.  Revenue is  currently generated  from                                                               
land leases  and the  lease with Seward  Ship's Drydock  & Ship's                                                               
Chandlery. The  Coastal Villages Region  Fund would have  skin in                                                               
the  game  through binding  contracts  sufficient  to secure  the                                                               
bonding  for the  project. Funding  for  the project  could be  a                                                               
combination  of  state  GEO   bonding,  revenue  bonding  through                                                               
contracts with CVRF and others,  or public/private financing. The                                                               
Coastal  Villages  Region  Fund can't  build  the  infrastructure                                                               
itself  because  the  Magnuson-Stevens   Act  mandates  it  spend                                                               
earnings  in the  Bering Sea  area or  the vessels  that fish  in                                                               
those areas. CVRF can be a tenant.                                                                                              
                                                                                                                                
3:32:58 PM                                                                                                                    
SENATOR MENARD joined the committee.                                                                                            
                                                                                                                                
MR. OATES  said CVRF found  that only  Seward met all  its needs.                                                               
The initiative  to move came from  the president of the  board of                                                               
the Coastal  Villages Region  Fund and the  board produced  a DVD                                                               
that does  a good job  of articulating their reasons  for moving.                                                               
He noted that every year  CVRF spends approximately $2 million to                                                               
fly  crewmembers  to  and  from Seattle,  about  $20  million  in                                                               
moorage and  maintenance in Seattle,  and $2 million to  fill the                                                               
fleet's  fuel tanks  just  one  time so  there  are business  and                                                               
economic  reasons for  the move.  He  agreed with  Representative                                                               
Seaton  that the  fleet wouldn't  interfere  with smaller  vessel                                                               
traffic in  Seward because the facility  is on the other  side of                                                               
Resurrection Bay. The timeline is December 2014.                                                                                
                                                                                                                                
3:35:16 PM                                                                                                                    
CHAIR OLSON  asked if the  City of Seward had  considered bonding                                                               
for the capital project.                                                                                                        
                                                                                                                                
MR.  OATES replied  revenue  bonding would  be  one approach  for                                                               
funding the project.                                                                                                            
                                                                                                                                
SENATOR WAGONER  asked if  there is  any opportunity  for funding                                                               
through the U.S. Army Corps of Engineers ("Corps").                                                                             
                                                                                                                                
MR. OATES  replied the  initial phase  can be  done at  the state                                                               
level, but the Corps might need  to be involved in the permitting                                                               
and  funding stream  in  phases 2  and 3.  The  initial phase  is                                                               
economic and will be sufficient  to establish both land and water                                                               
infrastructure. Finally,  he said,  many of the  Coastal Villages                                                               
Region Fund  crew members  already come to  Seward for  the AVTEC                                                               
training and are familiar with the area.                                                                                        
                                                                                                                                
3:37:57 PM                                                                                                                    
SENATOR WAGONER asked if the  Seward shipyard was currently under                                                               
lease.                                                                                                                          
                                                                                                                                
MR. OATES replied it's under  lease to the private company Seward                                                               
Ship's  Drydock &  Ship's Chandlery.  That  ship repair  facility                                                               
does major work on Coast  Guard and other vessels, which provides                                                               
another reason for coastal villages to come to this area.                                                                       
                                                                                                                                
SENATOR  WAGONER asked  if the  entire acreage  was leased  or if                                                               
there was a place for other vendors to locate.                                                                                  
                                                                                                                                
MR. OATES replied  there's plenty of expansion room  for all user                                                               
groups; some  of the available land  is municipal and some  is in                                                               
private ownership.                                                                                                              
                                                                                                                                
SENATOR  KOOKESH  reminded the  committee  that  this is  only  a                                                               
resolution.                                                                                                                     
                                                                                                                                
3:40:04 PM                                                                                                                    
NEIL  RODRIGUEZ, Coastal  Villages Region  Fund (CVRF)  said CVRF                                                               
already uses  the Seward facility as  a dry dock for  some of its                                                               
vessels, but  they aren't there  on a full-time basis.  One thing                                                               
to  take into  consideration,  he  said, is  that  CVRF has  been                                                               
growing at  a rapid  rate and  it has  partnerships in  other CDQ                                                               
groups.                                                                                                                         
                                                                                                                                
MR.  RODRIGUES  noted that  a  number  of regional  residents  do                                                               
maintenance  on CVRF  boats  and it's  an  overwhelming trip  for                                                               
Western Alaska residents  to travel to and  from Seattle. Sending                                                               
these workers to Seward would help  the city and keep the work in                                                               
Alaska.                                                                                                                         
                                                                                                                                
CHAIR OLSON asked Representative Seaton  if he would like to make                                                               
any closing comments.                                                                                                           
                                                                                                                                
REPRESENTATIVE SEATON  said the  City of  Seward bonded  to build                                                               
the Spring  Creek Prison,  which is  another indication  that the                                                               
business community  will find the municipality  approachable when                                                               
a long-term project makes sense.                                                                                                
                                                                                                                                
3:43:36 PM                                                                                                                    
SENATOR KOOKESH  moved to report  HJR 27 from the  committee with                                                               
individual recommendations and attached fiscal note(s).                                                                         
                                                                                                                                
CHAIR OLSON announced  that without objection, HJR  27 moved from                                                               
the Senate Community and Regional Affairs Standing Committee.                                                                   
                                                                                                                                

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