Legislature(2013 - 2014)BARNES 124
01/17/2013 01:00 PM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| Overview Department of Transportation & Public Facilities | |
| Alaska Marine Highway - New Direction on Vessel Acquisition from the Alaska Class Ferry | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
JOINT MEETING
HOUSE TRANSPORTATION STANDING COMMITTEE
SENATE TRANSPORTATION STANDING COMMITTEE
January 17, 2013
1:03 p.m.
MEMBERS PRESENT
HOUSE TRANSPORTATION
Representative Peggy Wilson, Chair
Representative Eric Feige
Representative Lynn Gattis
Representative Doug Isaacson
Representative Bob Lynn
Representative Jonathan Kreiss-Tomkins
SENATE TRANSPORTATION
Senator Dennis Egan, Chair
Senator Fred Dyson, Vice Chair
Senator Anna Fairclough
Senator Click Bishop
Senator Hollis French
MEMBERS ABSENT
HOUSE TRANSPORTATION
Representative Craig Johnson
SENATE TRANSPORTATION
OTHER LEGISLATORS PRESENT
Representative Beth Kerttula
COMMITTEE CALENDAR
OVERVIEW DEPARTMENT OF TRANSPORTATION & PUBLIC FACILITIES
- HEARD
ALASKA MARINE HIGHWAY - NEW DIRECTION ON VESSEL ACQUISITION
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
PATRICK KEMP, Commissioner
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Testified during the overview of the
Department of Transportation & Public Facilities (DOT&PF) and
answered questions during the discussion of the changes to the
Alaska Class Ferry (ACF).
CAPTAIN JOHN FALVEY, General Manager
Ketchikan Office
Marine Highway System
Department of Transportation & Public Facilities (DOT&PF)
Ketchikan, Alaska
POSITION STATEMENT: Answered during the discussion of the
changes to the Alaska Class Ferry (ACF).
RUEBEN YOST, Deputy Commissioner
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Answered questions during the discussion of
the Alaska Class Ferry (ACF).
ACTION NARRATIVE
1:03:58 PM
CHAIR PEGGY WILSON called the joint meeting of the House and
Senate Transportation Standing Committees to order at 1:03 p.m.
Present at the call to order were Representatives Feige, Gattis,
Kreiss-Tomkins, Lynn, Isaacson, and P. Wilson and Senators
Dyson, Fairclough, Bishop, French, and Egan.
^Overview Department of Transportation & Public Facilities
Overview Department of Transportation & Public Facilities
1:05:47 PM
CHAIR P. WILSON announced the first order of business would be
an overview by the Department of Transportation & Public
Facilities (DOT&PF). She asked the commissioner to review the
department's staff changes and discuss changes on the new ferry
system, which has created interest. She noted public testimony
will not be taken today, but will be taken in the future.
1:07:24 PM
PATRICK KEMP, Commissioner, Department of Transportation &
Public Facilities (DOT&PF), introduced himself and provided a
brief work history with the department, noting he began as a
"rear chainman" on a land surveying crew. He retired in 2006,
but came back to the DOT&PF in 2011 as a deputy commissioner.
COMMISSIONER KEMP offered to introduce his new management team
shortly. He turned to a PowerPoint overview and briefly
discussed slides, beginning with the statutory requirements
[slides 2-3]. He said the DOT&PF is the entity that plans,
designs, builds, and maintains transportation infrastructure for
public highways, facilities, airports, ferry terminals. He
characterized the department as having a strong contracting
presence, with a capital budget approaching $1 billion annually.
He also said the DOT&PF is an expert at delivering federal aid
programs, as well as other general fund programs.
1:09:18 PM
COMMISSIONER KEMP turned to the DOT&PF's mission [slide 4]. The
DOT&PF's mission is to get Alaska moving through service and
infrastructure. The DOT&PF works to provide safe and efficient
movement of people and goods; access to state service; and to
open opportunities for exploration and development. He said the
"Roads to Resources" program is fully supported by the governor
and the department works in partnership with the state DNR &
Alaska Industrial Development and Export Authority (AIDEA) to
accomplish transporting resources to tidewater. He recalled
testimony last year, in terms of Canada's Yukon development,
which is poised to "explode" in the mineral markets. The Yukon
province has infrastructure plus access to tidewater in Skagway.
He offered that Alaska has tremendous resources in Western
Alaska and throughout the state. He said the DOT&PF is actively
working on its "Roads to Resources (R2R)" program.
1:10:21 PM
COMMISSIONER KEMP discussed the DOT&PF's organization [slide 5].
He said in December 2012 he was appointed commissioner. He
related he learned in 2011 that DOT&PF's deputy commissioners
had been assigned modes of transportation; however, when he left
the department in 2006 deputy commissioners were part of the
executive team whose role was to oversee the department and
collaborate with the commissioner. He related the management
structure changes to modal deputy commissioners meant a separate
deputy commissioner was assigned to aviation, the Alaska Marine
Highway System (AMHS), and highways. He offered his belief the
modal system didn't function well since it created "silos"
within the commissioner's office and the management structure
hampered teamwork. He reported he prefers a management model
similar to the way some other state agencies operate. He
briefly touched on the deputy commissioner's specifications,
including their management role in conjunction with the
commissioner; however he emphasized day-to-day management would
fall to the division directors within the regions. He offered
his preference to employ a broad oversight approach for the
department and he said he does not want [deputy commissioners]
to micromanage the regions. He highlighted one controversy
which has arisen was he did not confer with the Marine
Transportation Advisory Board (MTAB) on his decision to change
the deputy commissioner for the AMHS. He related his intent to
have the AMHS's general manager, Captain John Falvey, run the
marine highways with the commissioner's office providing broad
oversight.
1:13:45 PM
COMMISSIONER KEMP introduced his three deputy commissioners:
Kim Rice, deputy commissioner, Program Development, Statewide
Maintenance and Operations (M&O), [Statewide Equipment fleet,
and Statewide Facilities]. She has been with the department for
over 30 years. He identified Steve Hatter as deputy
commissioner for Statewide Aviation, including rural airport
oversight, as well as the Alaska International Airport System;
Rueben Yost, deputy commissioner of divisions including Alaska
Marine Highway System (AMHS), Measurement Standards and
Commercial Vehicle Enforcement, and a new system "Engineering
Automation." He said the engineering automation function is an
important function since it ties the department to geographic
information system (GIS) and other computer information
technology. He characterized the engineering automation
function as important since it could assist the department with
the federal highway management system.
1:15:08 PM
COMMISSIONER KEMP introduced the DOT&PF's regional directors:
Steve Titus, Northern Region; Rob Campbell, Central Region; and
Al Clough, Southeast Region. He noted that the Administrative
Services director, Mary Siroky, reports directly to him, as well
as Connie McKenzie, legislative liaison. He identified systems
directors, including: Jeff Ottesen, Program Development; Roger
Healy, chief engineer, Statewide Design & Engineering Services;
Dan Smith, Measurement Standards & Commercial Vehicle
Enforcement; and Murray Walsh, Roads to Resources (R2R) manager
serving as special assistant to the commissioner.
1:16:42 PM
CHAIR P. WILSON understood Captain John Falvey "heads up" the
AMHS. She asked whether Commissioner Kemp had consulted with
Marine Transportation Advisory Board (MTAB) prior to assigning a
director [or a deputy commissioner] over the Alaska Marine
Highway System (AMHS) since there is a statutory requirement to
do so.
COMMISSIONER KEMP acknowledged he was aware of the statutory
requirement. He responded that he sent a letter to MTAB to
explain a deputy commissioner was no longer [solely] assigned to
the AMHS. He clarified that all of DOT&PF's deputy
commissioners would have knowledge of the AMHS, with one
commissioner having a broader knowledge base of the system. He
reiterated his intention is to have DOT&PF's directors manage
division operations, which ultimately would provide a better
structure for the department.
CHAIR P. WILSON understood the importance of communication and
the necessity of avoiding isolating "silos" in the
commissioner's office. She referred to a legal opinion in
members' packets from Hilary Martin, legislative counsel,
legislative Legal Services, [dated January 16, 2013]. The legal
opinion points out the intent of AS 19.65.180 (a), which is that
the MTAB should have been consulted on this important decision
[with respect to assigning a new deputy commissioner, Mr. Yost
to oversee the AMHS]. She said the statutory intent is to allow
public input in the selection of a manager of the AMHS.
Further, the attorney general agrees with the statutory intent,
she said. While she understood the commissioner's management
decisions, she again pointed out the legislature passed the
statute to allow the public input into the AMHS via the MTAB.
Since the AMHS has improved during the MTAB's tenure, she
expressed her hope that the department would continue to seek
counsel from MTAB, which is what the law intended. She said she
wanted to make certain everyone is aware of the [statutory
requirement].
1:20:20 PM
SENATOR EGAN interjected coastal communities previously provided
input via the Alaska Regional Development Organization (ARDORS),
Southwest Alaska Municipal Conference (SWAMC), and the Southeast
Conference. He wanted to make certain the commissioner would
listen to the coastal communities served by the AMHS, would
provide input to MTAB, and would meet with the MTAB to determine
the direction of the marine highway system.
COMMISSIONER KEMP answered "absolutely." He said there would
not be any change to that makeup. He offered his belief that
MTAB would [ultimately] be happier with the new structure.
Further, Captain Falvey and his experts can also attend MTAB
meetings and thus, the AMHS would have greater exposure and
transparency. While he did not wish to further discuss the
details of department management's prior level of functioning,
he said he thought the problems were resolved. He assured
members that the department would continue to coordinate with
MTAB and would also consult with MTAB on the general manager's
position; however, he expressed his intention to take the deputy
commissioners to a new level. He said he wants his department
operate collaboratively, similar to the way other state
departments, such as the Department of Natural Resources (DNR),
Department of Administration (DOA), and the Department of Law
(DOL) operate. He understood [the committee] has concerns that
he is not following the statutes; however, he advised members he
had consulted with the DOT&PF's attorneys and "felt he was on
good ground and wanted to make the selection." He acknowledged
he had not read the legislative counsel's opinion; however, the
DOT&PF's attorneys will review it and report back to him. In
response to comment, he advised that the DOT&PF's attorney
already has a copy of the legislative counsel's memo [of January
16, 2013].
CHAIR P. WILSON reiterated her concern, but said she feels
comfortable with the commissioner's comments, noting "the proof
is in the pudding" so she would continue to monitor the
situation.
1:24:32 PM
COMMISSIONER KEMP turned to DOT&PF's assets and FY 14 operating
budget [slide 6-7]. He related the DOT&PF has 3,186 staff, owns
and maintains 5,601 miles of roads, 84 maintenance stations, 256
airports, 7 weigh stations, 11 ferries and 35 ferry terminals.
The operating budget is approximately $635 million. He said the
capital budget is approximately $1 billion, with over $3-5
billion in capital projects, although the figure is difficult to
arrive at since it constantly changes. He reported he is taking
"a stab" at the total transportation needs for infrastructure -
at approximately $20 billion - which includes road construction
and maintenance.
1:25:44 PM
SENATOR FRENCH asked for clarification on the several billion
under development in capital projects - whether the projects are
ones funded by the legislature but are ones not yet completed.
COMMISSIONER KEMP answered the DOT&PF frequently develops a
project, but does not ask for construction spending authority
until the department is ready to proceed. In further response,
Commissioner Kemp agreed the projects were not funded but it
represents the potential project.
SENATOR FRENCH understood the commissioner was referring to
projects nearing funding, but not yet submitted to the governor.
COMISSIONER KEMP agreed.
COMMISSIONER KEMP turned to most immediate challenges [slide
10], identifying "Moving Ahead for Progress in the 21st Century
(MAP-21) - Transforming the Way We Build, Maintain, and Manage
Our Nation's Highways" as the most challenging for the
department. He said the DOT&PF will need the legislature's help
fill in the gap for local community projects that were
[previously] in the State Transportation Improvement Program
(STIP) but are missing; otherwise the DOT&PF must completely
give up on some projects. The federal highway MAP-21 removed
funding from local community roads and redirected it to the
National Highway Systems (NHS), such as the Seward Highway, the
Parks Highway, Dalton Highway, Alaska Highway, and ferries in
Alaska - which comprise Alaska's main arteries and corridors.
He said projects most hurt are roads such as the old Glenn
Highway and the Douglas Highway. He was uncertain of total, but
estimated it at approximately $200-400 million.
1:28:10 PM
COMMISSIONER KEMP, in response to Chair Wilson's comments that
MAP-21 would be discussed at a subsequent hearing, continued his
presentation. He turned to the DOT&PF's information sources
[slide 11].
SENATOR DYSON noted one slide in members' packets on ACF's
change in direction, which references a fall 2011, University of
Fairbanks (UAF) study that was published. Additionally, he
recalled that former Representative Taylor had prepared a plan
and the immediate past AMHS director also had developed plans
for system efficiencies. He expressed an interest in obtaining
a copy of these reports.
COMMISSIONER KEMP related the UAF study is on the DOT&PF's
website, but he was unsure about other studies although he was
aware of them.
1:29:42 PM
SENATOR EGAN asked Commissioner Kemp to address drastic changes
to Shakwak funding [highway construction funding accord between
the U.S. and Canada]. He offered his belief the funding changes
could seriously affect the transportation system as it transits
Canada.
COMMISSIONER KEMP related that Mr. Ottesen, Director, Program
Development would brief [the committee] on this in detail later;
however, he estimated that Alaska lost $70-100 million annual
Shakwak funding, whereas Canada completely lost its Shakwak
funding. He pointed out the Federal Highway Administration
(FHWA) MAP-21 is a two-year bill so he hoped that some problems
could still be addressed. He related Alaska is unique in that
it is the only state separated by a foreign country between
regions of the state so it seems reasonable the federal
government should help fund the corridor.
SENATOR EGAN, in response to a comment, agreed the late U.S.
Senator Ted Stevens and former U.S. Senator Mike Gravel were
instrumental in securing Shakwak funding, which has improved the
highway system to Beaver Creek.
CHAIR P. WILSON, in response to a question on aviation, asked
Senator Egan to hold his question on municipal and state-owned
airports until next week when the committee would discuss
aviation.
^Alaska Marine Highway - new direction on Vessel Acquisition
from the Alaska Class Ferry
Alaska Marine Highway - new direction on Vessel Acquisition from
the Alaska Class Ferry
1:31:49 PM
CHAIR P. WILSON announced that the final order of business would
be to discuss the Alaska Marine Highway System's new direction
on Vessel Acquisition from the Alaska Class Ferry (ACF).
1:32:06 PM
COMMISSIONER KEMP referred to a white paper in members' packets,
titled "Alaska Class Ferry: Project Overview and Change in
Direction." He offered to provide the background information on
the Alaska Class Ferry (ACF). The project began in 2005-2006,
at a time in which the department had concluded a shuttle ferry
system would provide better service, increased capacity,
additional flexibility, and more ridership opportunities at a
lower cost, in some cases. The key to a shuttle ferry system is
a 12-hour day, he said. He pointed to the success of the
private Inter-Island Ferry Authority (IFA) on the Prince of
Wales Island, which provides a reliable shuttle ferry system.
Additionally, the AMHS's M/V Lituya operates between Metlakatla
and Ketchikan and the AMHS's fast ferries provide fast passenger
service. To some extent, these vessels represent the future to
replace Alaska's mainline ferries, he said. He offered his
belief that in some instances it is far more cost effective to
replace a mainline ferry with a roll-on, roll-off (RORO) ferry.
COMMISSIONER KEMP said in 2006, the DOT&PF developed a Request
for Proposal (RFP) to develop a RORO ferry, noting a copy [of
the federal-aid "Project Agreement and Approval/Authorization,"
signed 5/19/2006 by the U.S. Department of Transportation] in
members' packets. The RFP's criteria was for a RORO passenger
ferry with an overall length 255-305 feet, a passenger capacity
of 450, vehicle capacity of 48-60, and bow-loading capacity. He
emphasized the importance of the bow-loading function for a true
RORO service since it allows vehicles to quickly be loaded and
unloaded.
1:36:11 PM
CHAIR P. WILSON referred to the Alaska Class Ferry's (ACF)
history in members' packets.
COMMISSIONER KEMP continued. He said the DOT&PF procured and
selected a firm based on the RORO concept. He said, "Somehow,
over the next few years the project changed. The bow door was
gone. The staterooms were added to the vessel. It was becoming
a much more costly vessel. Instead of a crew of 5-10, we were
looking at a crew of pushing 20-25." As Captain Falvey has
said, in determining crew for vessels the AMHS uses a formula
and multiplier of 2.3 to determine the total number of people
required to run a vessel for a 24-hour operation - also taking
into account factors such as shift changes. He emphasized the
DOT&PF wanted to partially move from a mainline ferry to a
different model - to faster ferries. However, the ferry project
had "morphed" into a second-class AMHS vessel, or "Aurora Class"
vessel. He outlined the "morphed" changes, which did not meet
the department's intent, including that the vessel had increased
to 350 feet, contained crew staterooms, but not passenger
staterooms.
1:38:27 PM
SENATOR FRENCH asked Commissioner Kemp to elaborate on the
decision-making process to better understand how the change
occurred.
COMMISSIONER KEMP suggested [the vessel changes] could mainly be
attributed to public involvement. The department, through its
public process, found users wanted more amenities, although some
changes occurred internally. He noted not all personnel agree
with the concept of fast ferries. He said he was unsure exactly
how it happened. He characterized the changed project as
similar to DOT&PF's plans to fix pavement on a 20-mile road, but
the public indicates they want sidewalks, luminaries, four
lanes. Thus, the project encounters "project scope creep." He
acknowledged some people wonder how the department moved so
quickly from an Alaska Class Ferry (ACF) to a shuttle ferry
system without public involvement. He answered by stating his
primary concern has been that the project changed from a RORO
shuttle ferry to one that became almost a mainline vessel
without staterooms. He further understood an arbitrary decision
was made to add 50 feet to the vessel. He reiterated he was
unsure how it had happened.
1:41:28 PM
CAPTAIN JOHN FALVEY, General Manager, Ketchikan Office, Marine
Highway System, Department of Transportation & Public Facilities
(DOT&PF), said he has been the general manager of the AMHS for
nine years. He agreed the ACF project started - as Commissioner
Kemp mentioned - as a shuttle ferry concept, but as time lapsed
the DOT&PF decided to hold an aggressive public process. The
DOT&PF crisscrossed the state holding public meetings and taking
comment, including web-based comment. In response to a
question, Captain Falvey said it was in 2008-2010. He said the
DOT&PF had an aggressive internal steering committee comprised
of shoreside and vessel employees. He further recalled deputy
commissioners tried to incorporate changes to the ACF project
based on public comment. He agreed that the project "morphed"
and slowly got more costly than the initial $120 million
projected cost.
1:43:07 PM
SENATOR FRENCH suggested an enormous amount of documentation
must be available spanning the three-year process that would
show the changes from the RORO ferry to a larger vessel. He
suggested some documentation would help [the committee]
understand the process the department used, in particular, given
the immense public interest in the project. "That's my
request," he said.
1:43:47 PM
REPRESENTATIVE ISAACSON, as former mayor of North Pole, said he
heard from other mayors and interested parties who commended
the DOT&PF's process, but also expressed frustration at the
DOT&PF's unilateral decision [to make the change from the ACF].
The mayors and communities did not realize the project had
increased to two ferries or that specifications changed, such as
to a bow-loading vessel. Further, the mayors and parties
questioned whether the vessels would be seaworthy. From his
initial perspective, it seemed the communities would gain two
additional ports of call and two ferries, he also said. He
asked what public process was used to increase the ACF project
to two vessels and whether the passenger concerns on the sea
worthiness of the vessels [was valid].
COMMISSIONER KEMP answered that there wasn't any public
involvement to make the change back to a shuttle ferry. He said
the decision was a management decision; however, the governor
was fully engaged in [the decision-making] process. He
suggested members allow him to continue his testimony since he
would more fully describe how the decision was made.
1:45:36 PM
SENATOR EGAN, asking to follow-up on Representative Isaacson's
question, understood the project "morphed" over the years, but
in a few hours the ACF project had "morphed" again without any
community input or any input from the MTAB. He asked the reason
the MTAB, with statutory authority, was not consulted on the
administration's decision to change to the current [shuttle
ferry] design without any public input.
COMMISSIONER KEMP reiterated he hoped his explanation would
become clear as he continued his testimony.
1:46:34 PM
SENATOR DYSON asked whether anything in the bargaining unit
agreements would work against reducing crew size and hours.
CAPTAIN FALVEY answered no. He offered his belief [no
opposition] had come from the bargaining unit. He explained the
crew level is controlled by the United States Coast Guard (USCG)
and relates to how safely ships can be evacuated. He referred
to certificates of inspections and crewing levels as being
determined by the USCG.
1:47:27 PM
SENATOR DYSON assumed significant savings were acquired by going
to a 12-hour or less crew and was also related to crew quarters.
CAPTAIN FALVEY answered that the AMHS operates a large cross
section of vessels, such as the motor vessel (M/V) Columbia,
which operates with a crew of 60 during the summer, while the
M/V Lituya operates with only 5-6 crew. Thus, crew levels
depend on specific boat and route. He acknowledged [in some
instances] the total crew could also depend on union contracts.
For example, it might require two crews to run two smaller
vessels operating in Lynn Canal during the summer, whereas in
the winter one crew might operate only one vessel on a different
schedule. He added that crew levels also vary depending on
season and the schedule.
1:49:07 PM
CHAIR P. WILSON asked the commissioner to keep track of the
questions members have asked. She expressed concern that some
passengers [may experience travel interruptions]. She said
passengers traveling on the Lynn Canal or Prince of Wales routes
could embark on bigger vessels, but it would create problems for
ridership in Southeast Alaska if a mainline ferry did not stop
in Wrangell. She detailed that these passengers must take a
short ferry to Petersburg, ride a bus for 30 miles, and then
take another short ferry [to reach their destination]. She
pointed out if connections didn't mesh these passengers would
need to spend the night.
1:50:17 PM
SENATOR FAIRCLOUGH asked to recast the setting. She said this
state is facing a revenue shortfall and as the governor and the
administration is reviewing capital or operating investments the
state must look at what it can afford. If the public is not
informed about a spending cap they may want additional amenities
such as adding staterooms. She said the state would soon be at
a point in making decisions between what is "needed" or "wanted"
and she hoped the audience would understand that Alaska's oil
production has been declining, revenue is declining, and
operating expenses are increasing. The indicated the state
would need to pencil out the "math" to have a healthy economy.
COMMISSIONER KEMP said in August 2012, when he was appointed as
acting commissioner, Governor Parnell asked him to look at the
costs for the ACF. Although he had been working in the
commissioner's office [at the time the project was moving
forward] he was not aware of the vessel concept or that the ACF
project was over budget. He recalled a [legislative] hearing in
February 2012 in which the department stated the cost of the
vessel would exceed $120 million. The governor specifically
wanted [the department] to reduce the cost to bring the project
under schedule; and in response, Captain Falvey attempted to so,
including [downsizing the project] by removing the "ride
control" and other amenities, he added.
1:53:40 PM
CAPTAIN FALVEY, in response to a question, related that as the
project got "deeper into functional design," the department
worked to reduce the actual vessel construction costs. He
explained that numerous costs comprise the $120 million
estimate, not just the shipyard costs to build the ship. In an
effort to curb costs, the department reduced the fin
stabilization system, which keeps the boat from rolling, removed
an elevator, and reduced galley components, including the
cafeteria. As the DOT&PF reviewed the functional design - which
is at 40 percent and is not lost - the department realized that
the ship could not be built for the $120 million budgeted. In
response to a question, he explained that "ride control" is the
same as "fins," which hydraulically fold out, similar to wings
on an airplane, to control vessel roll. He said the fins do not
control pitch - the up and down motion - but control the roll,
which contributes to seasickness.
1:55:47 PM
COMMISSIONER KEMP continued. He related the DOT&PF heard rumors
from the shipyard the cost would exceed $120 million. In
response to a question, the commissioner explained that he
legislature decided some time ago some administrative costs
should be charged to capital projects. He said the overhead
rates vary based on the type of project, from facilities at two
percent to highways at five percent. Additionally,
administrative add-on costs for preliminary engineering (PE)
include design and construction engineering (CE), which is also
assessed for each project. He estimated the PE overhead at $7-8
million and CE overhead at $6 million for the ACF project. In
response to a question, he agreed the total would be $14 million
in [PE and CE] administrative costs.
1:58:45 PM
COMMISSIONER KEMP continued. He said the DOT&PF wrote a letter
to the shipyard requesting cost information. The shipyard
responded it did not have total cost information, but had only
repeated rumors it was hearing from the "industry." The
department subsequently asked for and obtained two independent
cost estimates - from the Ketchikan shipyard and the consultant
- which came in with a project estimate between $150-170
million, substantially over the $120 million funding. In
response to a question, Commissioner Kemp clarified the total
figures included the DOT&PF's administrative costs.
1:59:52 PM
CHAIR P. WILSON acknowledged it would be pretty hard to
calculate a project's overall cost when the ACF project was only
at the 40 percent design phase.
COMMISSIONER KEMP agreed. He said the DOT&PF concluded the
costs could not be reduced [on the ACF project]. He reported to
the governor the budgetary cost overrun estimates and at that
point the department began to seek other alternatives. At this
point, he said he discovered the original procurement was for a
RORO shuttle ferry concept. The governor's office recalled a
project on the shelf would work in Southeast Alaska; however,
the DOT&PF was unable to produce one. The DOT&PF subsequently
hired a consultant, who was also unsuccessful in finding [a
suitable substitute]. However, the consultant was familiar with
and understood the shuttle ferry concept and [developed]
preliminary figures for the concept. In 2006, the estimated
cost of one shuttle ferry was $30 million, he recalled. The
governor supported the concept change from the ACF [to two
shuttle ferries] since it was quite clear shuttle ferries could
deliver more vehicles and provide more capacity with lower
capital and operating costs.
2:02:59 PM
REPRESENTATIVE ISAACSON asked for clarification on the type of
shuttle ferry estimated at $30 million and whether the design is
comparable to Washington state ferries or if the vessel would
have a deeper hull design.
COMMISSIONER KEMP answered no, a ferry such as the Washington
state ferries won't work in Alaska; instead, the design concept
would be for a heavy seas vessel, approximately 280 feet in
length, which is somewhat longer than the M/V LeConte.
SENATOR DYSON clarified what Commissioner Kemp is referring to
is a vessel that with doors that open sideways. Additionally,
the vessel would also have doors on the stern. He characterized
this type of vessel as quite seaworthy. He asked for
clarification on whether the proposed shuttle ferries would have
a side-loading feature.
COMMISSIONER KEMP agreed the ferries would have a side-loading
feature. He said the Juneau to Haines route is the most
challenging run, in terms of time, and the RORO design helps
[reduce loading and unloading time].
2:05:08 PM
REPRESENTATIVE KREISS-TOMKINS asked which ports in Southeast
Alaska can accommodate a RORO design.
CAPTAIN FALVEY answered that the DOT&PF could use the fast
shuttle ferries in Juneau and could use the vessels in Haines
with some modifications necessary.
REPRESENTATIVE KREISS-TOMKINS asked for the approximate cost of
re-rigging a ferry terminal to accommodate a RORO vessel.
RUEBEN YOST, Deputy Commissioner, Department of Transportation &
Public Facilities (DOT&PF), answered that the re-rigging cost
would be approximately $15-20 million [per facility], although
the department has not specifically looked at detailed designs
to do so. He reported that the DOT&PF does not currently have a
design for the [shuttle ferry]. He clarified the current status
of the [ACF] project, noting the DOT&PF has announced a change
to the design concept. The design team has been suspended and
the DOT&PF is working on a design-concept, which would be shared
with the MTAB and the public prior to the actual design work, he
advised.
2:06:07 PM
MR. YOST, in response to Senator French's earlier question on
the DOT&PF's decision to change ship size, answered that when
the department looked at a class of ship instead of a single
shuttle, the mission also grew in terms of places the ferry
could serve. For example, in addition to Ketchikan and Prince
Rupert, the ferry could serve other runs, including the Prince
William Sound run. Other components were added to the vessel to
make the vessel able to handle any one of the routes, which also
made the vessel more expensive. Further, building a steel ship
requires considering operational costs that must span the "50-60
year" vessel life. Thus, the department "backtracked" to
consider one or two vessels that could work in a more restricted
number of locations, but would also result in operational and
construction cost savings.
2:08:02 PM
REPRESENTATIVE ISAACSON recalled that the ACF was scheduled to
be built this year, yet the changes only put the project six
months behind schedule.
COMMISSIONER KEMP said he was unsure of the timeline.
CAPTAIN FALVEY said that the DOT&PF had planned to award a
construction management general contract (CMGC) for the 350-foot
ACF in July. Currently, the DOT&PF hopes to deliver the new
design by November, which will be a few months behind schedule.
He pointed out a smaller ship is less complex to design, but the
department has a concept [for the design]. He emphasized the
RORO configuration as being more of an "ocean hull" design. The
mainline vessels have forward side doors and require "sponsons"
that run the length of the ship forward and aft in order to
accommodate the side doors. He explained this mechanism creates
a tremendous pounding [when the vessel is underway]. He pointed
out the AMHS's M/V Kennicott, M/V Tustemena, and M/V Lituya
vessels do not have "sponsons" but aft side doors. He
characterized this as one advantage of the "ocean hull" form
under consideration. The concept consists of a 275 to 278-foot
hull form that could carry approximately 55 cars, without
"sponsons," similar to vessels used in offshore construction.
The proposed hull design is used in vessels that run in heavy
seaways. The concept includes a knight head's bow with side
doors at the back of the vessel, which would function well in
Lynn Canal, he said. He reported that ships get bigger
exponentially. He said the M/V Aurora and M/V LeConte are 235
feet in length but reported that a 275-feet vessel increases
exponentially in its physical size. The DOT&PF is confident
with the proposed hull form, which he anticipated would perform
as well as the 350-foot M/V Taku, if not better, he said.
2:12:30 PM
REPRESENTATIVE ISAACSON inquired as to whether the delay from
July to November would include the public process and if the
project would be built in a shipyard in Alaska.
CAPTAIN FALVEY responded that the DOT&PF would continue to use
the construction management general contracting (CMGC) method of
procurement. He explained that under the CMGC, the shipyard is
consulted at an early design stage, as happened with the ACF
process. He said the CMGC method allows the state, naval
architects, and the shipyard to work together which eliminates
risk, he said. He related that each shipyard has different
capacities and the CMGC process allows the shipyard's strengths
to be incorporated into the design process. He anticipated the
CMGC method will be used for the vessels, which also includes a
guaranteed maximum price from the shipyard. Under the contract,
the state would then have the option, in conjunction with naval
architects, to compare estimates and [have the ship built]
outside Alaska if the price is deemed unacceptable.
COMMISSIONER KEMP said the legislature passed a law to allow the
department contracting ability to use a shipyard in Alaska -
noting the only shipyards in Alaska are located in Ketchikan and
Seward. He reiterated the CMGC process, as Captain Falvey
described, noting the DOT&PF would negotiate the best price with
the shipyard. The DOT&PF has successfully used the CMGC process
for fish hatcheries in Anchorage and Fairbanks and is using the
process for the State Library Archives Museum (SLAM) project,
which is currently underway. He assured members that the state
would negotiate the best price and does have the ability to
contract with shipyards in the Lower 48, if necessary.
COMMISSIONER KEMP, referring to the design time slippage, said
the DOT&PF anticipates the new vessels would be built faster and
would meet the ACF's timeline for completion.
2:16:49 PM
SENATOR EGAN acknowledged ferries expand the AMHS. He recalled
the state lengthened the mainline ferries [when they were
built]. He further recalled in 1961, his mother christened the
M/V Malaspina, which was subsequently commissioned in 1963. The
M/V Malaspina is 50-years old and was built to operate in
hostile weather conditions, not for the calm seas the Washington
ferries traverse, he said. He further recalled testimony last
year before the legislative Transportation and Finance
committees, with respect to funding, such that the ACF's purpose
was to reduce stress on the mainliners and allow ships like the
M/V Malaspina to be deployed to less hostile areas. He
reiterated the water conditions in Washington are vastly
different than the ones on the Lynn Canal ferry run. He offered
his belief the M/V LeConte has already had four or five
cancellations thus far this year.
CAPTAIN FALVEY confirmed the M/V LeConte has had four
cancellations in the past year or so.
SENATOR EGAN expressed further concern [over changes to the ACF
project] since the original plan was to redeploy a mainliner to
less hostile sea conditions [by building the ACF].
Additionally, the seaworthiness of 50-year old vessels is at
risk, he noted. While he said he appreciated the work the AMHS
and DOT&PF has taken to keep the vessels operating, the aging
fleet raises his concern that the fleet cannot be redeployed, if
necessary, [with the changes from the ACF to two shuttle
ferries]. He said his constituents are also concerned about a
potential "open deck" concept, which he characterized as "a
formula for failure."
COMMISSIONER KEMP said the DOT&PF is currently at the conceptual
design phase for this project. He anticipated the design
concept report should be completed in one to two weeks, noting
the draft has just been reviewed. He then said:
I think you're going to be pleasantly surprised with
what we come up with. I think you're going to find
vessels as every good as the Taku for sea keeping
characteristics. I think you're going to find --
we're going to see an increase in capacity, an
increase in flexibility, an increase in redundancy.
If one of these vessels goes down, you still have
another one. If the [M/V] LeConte goes down it's
down. There's no redundancy. I think; I think if
we're patient and we look at the design concept report
and we open it up for public involvement and we let
the people know what we're doing - I think we'll be
fine. I think -- just a couple weeks - just give it
some time.
2:21:16 PM
REPRESENTATIVE FEIGE, speaking as a pilot, said he assumes the
department knows the passenger ridership and has reviewed load
factors. He acknowledged the ferry system was not designed to
generate revenue, but asked whether the department has
considered ways to minimize the per mile highway cost so the
result is an annual loss that is not too exorbitant.
COMMISSIONER KEMP agreed. He acknowledged Representative Feige
has identified the department's specific mission. He said
Captain Falvey and his staff work "24-7" to make the AMHS system
run smoothly and in a cost efficient manner.
2:22:46 PM
REPRESENTATIVE FEIGE discussed loading and offloading designs,
noting bow or stern loading as being the most efficient method.
He acknowledged side loading is not the most efficient loading
method. He asked whether it would be more effective to
standardize dock design docks to avoid having to build multiple
features into the vessels.
COMMISSIONER KEMP offered his belief the department would always
need side doors for the mainliner ferries. He acknowledged one
capital improvement concept in Haines would be necessary to
allow for a bow egress; however he said that specific project
has been "on the books" for quite some time. He recalled that
the preliminary design was a federal-aid project necessary to
accommodate the fast ferries in Haines due to specific
differences in the dock design. He explained the fast ferries
have a big ramp to the car deck, which necessitated the DOT&PF
to modify the ship design to match the ferry terminals. This
proved cost effective rather than for the DOT&PF to revamp the
ferry terminal dock design. He concluded the AMHS and DOT&PF
have been "doing fine" with vessel and ferry offloading design
costs.
2:24:56 PM
CHAIR P. WILSON also acknowledged the aging fleet would require
numerous replacement vessels. She understood the dock design as
being more costly; however, she wondered whether it would be
cost effective over time to change the dock design.
COMMISSIONER KEMP responded that the ferry terminals are multi-
use terminals.
CAPTAIN FALVEY interjected that the AMHS owns 20 of the 35 ferry
terminals in Alaska. The remaining dock ownership ranges from
ownership by seafood plants to cities and communities. Further,
the AMHS has multiple classes of ferries, including mainline
vessels, the "Aurora class," and shuttle ferries that serve the
3,500 mile system. Thus, the AMHS has little control over total
expenditures; however, the AMHS has maintained consistency with
mainliner costs and has standardized its vessels, he said.
Still, difficulties arise in containing costs due to the
logistics, he added.
2:27:09 PM
REPRESENTATIVE GATTIS, speaking as someone from Southcentral
Alaska, related her understanding the ACF project budget was
initially $120 million, but it "morphed" into something else.
She asked for clarification on what happened to the funding.
She asked what would keep the "$30 million ferries from morphing
and morphing." She acknowledged that the department's
commissioners have changed, but other personnel remains the
same.
COMMISSIONER KEMP answered that $116 to $117 million of the $120
million appropriation remains. The department moved quickly [in
changing the project scope], in part, due to the $20,000-30,000
per day costs for the ACF. He answered, with respect to the
question of "the morphing of new shuttle ferries," that the
department anticipates instituting controls, noting the DOT&PF
has also hired a consultant to help with the concept. He
acknowledged the change represents a shift in management, but
suggested the design concept report should be collectively
reviewed. He offered his belief the DOT&PF is "on the right
track." As previously mentioned, the governor was very
concerned about the cost estimate [overage] for the ACF project.
The DOT&PF considered "dipping into" the vessel replacement fund
to make up the estimated $50 million shortfall; however, to do
so would affect replacement costs for the M/V Tustemena, he
said. He emphasized that every dollar counts and budgetary
controls are required on all vessel projects. He reiterated the
governor was determined to keep the ACF on budget. He offered
that the estimated $30 million per ferry "is long gone";
however, the department thinks it can purchase two ferries with
the remaining funds available.
2:30:09 PM
REPRESENTATIVE KREISS-TOMKINS recalled the consultant researched
the RORO design. He asked for the consultant's name and a copy
of the report, if available.
COMMISSIONER KEMP answered that the engineering firm was
Coastwise [Corporation] from Anchorage. He said the ACF's
designer - who will be retained - is the Elliott Bay [Design
Group] in Seattle. He stated the DOT&PF has two experts as well
as its own experts.
REPRESENTATIVE KREISS-TOMKINS asked whether the $15-18 million
to modify a ferry terminal creates independency or if inter-
operability exists between the different classes of vessels. He
further asked whether a RORO designed ferry would eliminate
mainline ferries operating in Lynn Canal.
MR. YOST answered the proposed modification would still allow
mainliners to still operate the Juneau to Haines run, in fact,
the AMHS would not change its current operation, including
operating two weekly mainline runs in the summer and one in the
winter. He explained the change would mean two shuttles would
cover the current M/V Malaspina's daily operation from Juneau to
Haines and Skagway, and the return run. He said this
modification is being done to specifically allow for continued
use of side-loading mainline vessels in Haines.
2:32:14 PM
SENATOR BISHOP offered his support for the direction the
commissioner's management decision. He said the "right hand has
to know what the left hand is doing and this "mission creep"
might not have occurred if the "right hand knew what the left
hand was doing." He pointed out not all of the design performed
on the ACF project is lost. He related his understanding that
the matrix is not complete since the department is still
assembling the shuttle ferry's design. He asked for an
opportunity to review the design matrix for the proposed ship
since he is interested in the propulsion, long-range alternative
fuels for cost savings, and whether the ship is expandable in
terms of fuel.
2:34:01 PM
COMMISSIONER KEMP continued with his discussion on funding and
the proposed project timeline. He characterized the experience
of discovering the estimated ACF's cost overrun as "a real
pickle." He elaborated that [at the time of discovery], the
department had just signed a contract with the shipyard to begin
design elements, "tank tests" were being conducted in Norway,
and a host of things would soon accelerate spending [for the
project]. He explained that the department met with MTAB, but
was necessarily "moot" on the subject [on the ACF changes] while
options were being evaluated. "As I said, the governor was
steadfast. He did not want to exceed that amount. He values
the ferry system but he knows there is a better way of doing
business," he said. He described the steps taken, noting the
DOT&PF made an announcement in Ketchikan, suspended its contract
with Elliott Bay [Design Group], and moved forward with a
preliminary design concept report. He said the vessel size
[under consideration for the two shuttle ferries] is
approximately 280 feet and that the cost is "okay." He
reiterated his belief that people will like [the changes].
While he was unsure exactly when the report would be finished,
he anticipated it should be forthcoming in a couple of weeks and
will be "the guiding light" for the Elliott Bay Design Group.
He reiterated [with the project changes] the AMHS would increase
its [fleet] capacity and flexibility, provide redundancy,
increase opportunities for travel, reduce costs, and ultimately
create 15-25 permanent jobs in Haines.
2:36:30 PM
REPRESENTATIVE KREISS-TOMKINS asked whether a cost estimate
would be available upon design concept completion.
COMMISSIONER KEMP answered that a preliminary design would be
available, but the cost of any project "becomes clearer as it
goes on." In further response to a question, Commissioner Kemp
answered yes, some type of preliminary costs would be available
once the design concept is completed.
2:37:17 PM
REPRESENTATIVE KREISS-TOMKINS, in reference to operating costs,
asked for cost comparisons of the two shuttle-class ferries
versus operating a single mainline ferry in Lynn Canal. He
asked whether the assumption is that it would be cheaper to
operate two smaller shuttle ferries than it would be to operate
a mainline ferry to and from Juneau and Haines.
MR. YOST clarified the AMHS does not plan to run two shuttles
roundtrip from Juneau to Haines. Instead, he reported that one
shuttle would run from Juneau to Haines and the other would run
from Haines to Skagway. Currently, the mainline ferry passes
through Haines in either direction [of the Lynn Canal run from
Juneau to Skagway]; however, the AMHS can conduct the transfer
faster with a bow and stern door [proposed for the shuttle
ferries]. He clarified that the loading doesn't need to be
separated by destination when everyone on the vessel is headed
to the same destination. Further, passengers destined for
Skagway would load onto the second vessel, which would result in
shorter loading times.
MR. YOST explained that security times would also be simplified
since everyone would depart the ferry [at Haines], which results
in less stringent security requirements. He noted the security
concern arises when a vehicle remains on the ferry destined for
Skagway, but the driver disembarks at Haines, which is removed
when all passengers and vehicles are offloaded in Haines. He
characterized the process as being similar to a Puget Sound
ferry operation, in which transfers embark on a different ferry.
Additionally, the change could allow for two 12-hour operations,
although the Haines to Skagway route does not take 12 hours to
complete. He suggested the changes would likely allow for four
sailings. Further, the overall crew required would be reduced
from two crews of 7-10 to operate two shuttle ferry - 12-hour
runs - as compared to the 23-30 crewmembers necessary for the
ACF [to operate the Lynn Canal run]. He concluded the AMHS
would save in crew numbers and operating costs due to changes in
the vessel size.
2:40:15 PM
REPRESENTATIVE ISAACSON said he was impressed at the numbers of
military who reside in Interior Alaska who use the ferries. He
commented he also looks forward to attracting to the "tank
testing" to Alaska [currently being conducted in Norway]. He
recalled the commissioner mentioning 25 jobs would be created in
Haines and Skagway. He asked the reason to add more crew given
that current ferry traffic exists.
CAPTAIN FALVEY anticipated that the crews would be permanently
employed on the shuttle ferries. The day vessel's crew would
live ashore, just as the M/V LeConte's crew currently does. The
boats spend the night in their home port, he said.
2:42:23 PM
REPRESENTATIVE KREISS-TOMKINS recalled the commissioner
mentioned he had reviewed a preliminary report. He indicated
substantial public concern has been raised about rumors on the
fundamental design aspect from closed to an open deck. He
specifically asked whether Commissioner Kemp could answer
whether [the proposed shuttle ferries] would have an open or
closed deck.
COMMISSIONER KEMP answered no. He explained the DOT&PF is still
working on the vessel design and will need to bring in its main
consultant: Elliot Bay [Design Group] - the naval architects.
He reiterated that the draft report would be completed in a
couple of weeks.
2:47:12 PM
ADJOURNMENT
There being no further business before the committees, the joint
meeting between the House and Senate Transportation Standing
Committees was adjourned at 2:47 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| ACF Change in Direction(12-20-12).pdf |
HTRA 1/17/2013 1:00:00 PM |
|
| ACF emails for 1-17-13 mtg.pdf |
HTRA 1/17/2013 1:00:00 PM |
|
| Joint Transpo Jan 17 2013 -A.pdf |
HTRA 1/17/2013 1:00:00 PM |
|
| SE Shuttle Ferry Statement of Services.pdf |
HTRA 1/17/2013 1:00:00 PM |
|
| LTR MTAB.pdf |
HTRA 1/17/2013 1:00:00 PM |
|
| Leg Legal Opinion re MTAB consultation 011613.pdf |
HTRA 1/17/2013 1:00:00 PM |
|
| EBDGShuttleStudy011810.pdf |
HTRA 1/17/2013 1:00:00 PM |
|
| 1-16-13 Haines Borough Questions re AK Class Ferry.pdf |
HTRA 1/17/2013 1:00:00 PM |
|
| Fed Aid Project Agreement Ferry.pdf |
HTRA 1/17/2013 1:00:00 PM |