Legislature(2017 - 2018)KODIAK
08/16/2018 05:00 PM House TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Powerpoint on Hb 412: Marine Highway Corporation; the Alaska Marine Highway Reform Project and How It Led to Hb 412 by Robert Venables, Executive Director of Southeast Conference & Susan Bell, Principal, Mcdowell Group | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
August 16, 2018
5:00 p.m.
MEMBERS PRESENT
Representative Louise Stutes, Co-Chair
Representative Harriet Drummond
MEMBERS ABSENT
Representative Adam Wool, Co-Chair
Representative Matt Claman
Representative Chuck Kopp
Representative Mark Neuman
Representative Colleen Sullivan-Leonard
Representative David Eastman (alternate)
Representative Gabrielle LeDoux (alternate)
OTHER LEGISLATORS PRESENT
Representative Dan Ortiz
Representative Bryce Edgmon
Senator Dennis Egan
Senator Gary Stevens
COMMITTEE CALENDAR
PRESENTATION: PowerPoint on HB 412: Marine Highway
Corporation; The Alaska Marine Highway Reform Project and how it
led to HB 412 by Robert Venables, Executive Director of
Southeast Conference & Susan Bell, Principal, McDowell Group
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to report
WITNESS REGISTER
ROBERT VENABLES, Executive Director
Southeast Conference;
Chair, Marine Transportation Advisory Board
Juneau, Alaska
POSITION STATEMENT: Presented a PowerPoint on the Alaska Marine
Highway Reform.
SUSAN BELL, Principal
McDowell Group
Juneau, Alaska
POSITION STATEMENT: Presented the second portion of the
PowerPoint on the Alaska Marine Highway Reform.
SENATOR DENNIS EGAN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Asked questions during the discussion of
the Alaska Marine Highway Reform.
SENATOR GARY STEVENS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Asked questions during the discussion of
the Alaska Marine Highway Reform.
ACTION NARRATIVE
5:00:52 PM
CO-CHAIR LOUISE STUTES called the House Transportation Standing
Committee meeting to order at 5:00 p.m. Representatives Stutes
was present at the call to order. Representative Drummond
arrived as the meeting was in progress. Representative Edgmon,
Representative Ortiz (by teleconference), Senator Egan (via
teleconference) and Stevens were also in attendance.
CO-CHAIR STUTES recognized Representative Bryce Edgmon for
traveling to Kodiak for this committee hearing. Representative
Edgmon is not only the Speaker of the House, but he as the
legislative representative for Bristol Bay, Unalaska, Sand
Point, King Cove and other coastal communities, this issue has a
large impact on his district as well.
^PRESENTATION: PowerPoint on HB 412: Marine Highway Corporation;
The Alaska Marine Highway Reform Project and how it led to HB
412 by Robert Venables, Executive Director of Southeast
Conference & Susan Bell, Principal, McDowell Group
PRESENTATION: PowerPoint on HB 412: Marine Highway Corporation;
The Alaska Marine Highway Reform Project and how it led to HB
412 by Robert Venables, Executive Director of Southeast
Conference & Susan Bell, Principal, McDowell Group
5:02:58 PM
REPRESENTATIVE STUTES announced that the only order of business
would be PowerPoint Presentation on HB 412: Marine Highway
Corporation; The Alaska Marine Highway Reform Project and how it
led to HB 412 by Robert Venables, Executive Director of
Southeast Conference & Susan Bell, Principal, McDowell Group.
5:03:20 PM
CO-CHAIR STUTES offered her opening statement as follows
[original punctuation provided]:
As a refresher for the committee and the public, HB
412 is a piece of legislation that was introduced by
this committee in an effort to revitalize our ailing
ferry system.
The concept of the bill is to convert the Alaska
Marine Highway System into a publicly owned
corporation, but I will leave the explanation of how
that concept came about and the benefits it will
provide to the presenters.
I'd also like to thank everyone from the community
here tonight and everyone listening at home. Aside
from maintaining healthy fisheries, revitalizing our
ferry system is probably the most important issue
facing coastal Alaska.
5:04:04 PM
CO-CHAIR STUTES continued her opening statement, as follows
[original punctuation provided]:
Dependable ferry service is the lifeblood of the
communities that myself and other coastal legislators
represent. This is a huge issue to us. This is a
topic the Transportation Committee has spent a lot of
time on last year and we have gathered a lot of
support for the idea from Interior legislators. This
committee plans to work in earnest on a new version of
HB 412 next session with the intention of getting it
passed into law.
I called this meeting to further explore this concept
in a community-style forum so that the most affected
stakeholder, the public, can be informed and offer
input on the ground floor.
After we adjourn the official portion of this meeting,
the presenters and committee will remain to
participate in a Q&A session with the audience. I
encourage anyone with questions or ideas to stay and
participate in that forum.
Without further ado, would the presenters come join
us. Please identify yourself and your affiliation for
the record and proceed with your presentation. This
meeting is recorded in audio only, so I am asking that
committee members and presenters identify themselves
each time they speak for the recording secretary in
Juneau. Committee members feel free to ask questions
as they arise.
5:05:39 PM
CO-CHAIR STUTES continued her opening statement, as follows
[original punctuation provided]:
Aside from the two presenters, we have Shirley
Marquardt, the Executive Director of the Alaska Marine
Highway System, to answer questions on behalf of the
department.
Members of the audience, again, please stay until the
end if you are interested in participating in the Q&A
session. It should be very informative.
5:06:21 PM
ROBERT VENABLES, Executive Director, Southeast Conference;
Chair, Marine Transportation Advisory Board, stated that the
Southeast Conference is a regional development organization for
the State of Alaska that covers communities from Metlakatla to
Yakutat. He identified the SouthWest Alaska Municipal
Conference (SWAMC)` as a strong supporter and collaborator in
this process. He characterized the process as one that has
Alaskans at the helm. He asked the Executive Director of the
Alaska Marine Highway System (AMHS) incoming {May 2018], Shirley
Marquardt to join him at the table, noting she formerly served
as the mayor of Unalaska. He applauded the committee's work
this session, noting the remarkable progress with the
introduction of HB 412. He acknowledged that the committee was
up to speed with many aspects of the AMHS.
5:08:14 PM
MR. VENABLES began a PowerPoint on the Alaska Marine Highway
Reform. He turned to slide 2, AMHS Reform Team, and briefly
reviewed how the process began. Governor Walker and Lt.
Governor Mallott challenged the Southeast Conference to find a
statewide process and mechanism to address the failing and
ailing AMHS. The Southeast Conference solicited participation
from across the state creating a statewide steering committee.
5:08:45 PM
MR. VENABLES recognized participants who were present, including
Mayor Pat Branson, Kodiak, who serves on the Marine
Transportation Advisory Board (MTAB) and collaborated on this
project and Mr. John Whiddon (Kodiak). He acknowledged the
contractors who provided strong expertise, including the Elliott
Bay Design Group (EBDG), KPFF Engineering Consultants, and
McDowell Group (MG), noting Susan Bell, principal, McDowell
Group was also present. He further recognized the contributions
by the regional Alaska Regional Development Organization
(ARDOR), and the Southwest Alaska Municipal Conference (SWAMC).
5:09:32 PM
MR. VENABLES turned to slide 3, Statewide Steering Committee,
which read as follows:
? Chair: Dennis Watson - Craig
? Dave Kensinger - Petersburg
? Greg Wakefield - Anchorage
? Elizabeth Bolling - Ketchikan
? Shannon Adamson - Juneau
? Josh Howes - Anchorage
? Will Ware - Juneau
? Sharon Hildebrand - Fairbanks
? John Whiddon - Kodiak
? Dan Kelly - Ketchikan
? Michael Anderson - Cordova
? Dennis Bousson Skagway
Ex-officio Commissioner Luiken
? Staff: Robert Venables
MR. VENABLES noted that the steering committee members were from
many parts of the state, not just Southeast Alaska. He said he
would provide a similar presentation in Fairbanks next week and
that he recently presented in Anchorage and to the Aleutian
Pribilof communities in order to provide outreach throughout the
state.
5:10:14 PM
MR. VENABLES turned to slide 4, titled "Urgent Need for
Financial Sustainability," which read in part as follows:
? Funding affects schedule
? State general funds decreased by
$38 million from FY13 to FY19
? Short-term planning horizon
? Service level and revenue decline
? AMHS Fund/Budget (AS 19.65.050)
? Essential part of state transportation
? Provide for predictability and stability
? Provide stable services to the public
MR. VENABLES pointed out the need for stabilized funding for the
Alaska Marine Highway System (AMHS). He applauded the
leadership of the House Transportation Committee in addressing
this issue before the Finance Transportation subcommittee and in
committee. It has been a two-year process and Speaker Edgmon,
Representative Kito and Senators Stevens and Egan were very
supportive participants throughout the process. He stated that
stabilized funding would allow the system to operate and capture
revenue in the highest operating months of July and August.
5:12:08 PM
MR. VENABLES turned to slide 5, Aging Fleet, which read, in part
as follows [original punctuation provided]:
? Kennicott - 1998
? Columbia - 1973
? Tustumena - 1964
? Malaspina- 1963
? Matanuska - 1963
MR. VENABLES stated that the other "hole" in the fiscal outlook
was increased maintenance issues. He pointed out that the
vessels are very old, noting that the core of the fleet was
built in the 60s, including the M/V Tustumena. These vessels
have been suffering more and more breakdowns due to age-related
issues with increased costs as time goes on. The AMHS has
continually needed to put funding into repairs just to keep
going. The planning issue has been very good in helping to
address longer-range issues and bring stability and viability to
the AMHS.
5:13:13 PM
MR. VENABLES turned to slide 6, New Leadership, which read, in
part as follows [original punctuation provided]:
? Shirley Marquardt announced as Executive Director in
May 2018
? Implementing Phase 2 Recommendations
MR. VENABLES acknowledged Executive Director Shirley Marquardt,
who was hired in May 2018. One of the things to consider about a
public corporation is the recognition that the AMHS leadership
and system needs to be operated more like a business. He
acknowledged that due to its public service mission that some
level of funding support from the state will be necessary to
achieve that public mission; however, it is a $150 million
enterprise that needs to be run more like a business than it has
in the past. He suggested that one day the AMHS could have an
executive director surrounded by a Board of Directors (BOD) with
the expertise in finance and the maritime industry. The
Department of Transportation & Public Facilities' (DOT&PF)
Commissioner Luiken has been very supportive of this process and
has implemented or is attempting to implement many of
recommendations, including appointing Ms. Marquardt as Executive
Director.
5:14:16 PM
MR. VENABLES turned to slide 7, Future Fleet Development, which
read, in part as follows [original punctuation provided]:
? M/V Tazlina christened August 11
at Ketchikan Shipyard
? M/V Hubbard under construction
? Tustumena replacement in final
design phase, construction soon
? Phase 4 analysis on future fleet
MR. VENABLES acknowledged some misalignments, which will be
discussed soon between management and labor, but also that so
many different designs exist within the fleet. The challenge
has been to try to find the role of design in lowering the cost
and increasing efficiency of operations. He stated that he was
in Ketchikan for the M/V Tazlina's christening. He reported
that the M/V Tazlina is a beautiful vessel and will be a welcome
addition to the fleet.
MR. VENABLES continued to review the slide, noting that the M/V
Hubbard is currently under construction. He said it was
wonderful to see a ship being built in Alaska, noting the jobs
the constructed had created in Ketchikan. The M/V Tustumena's
replacement has moving forward with a federal Buy America
waiver, which will be discussed later, but it is moving towards
construction in a multi-year process. He noted the Phase 4
analysis on future fleet also spills over to slide 8, since the
last bullet point addresses fleet and terminal standardization.
5:16:04 PM
MR. VENABLES turned to slide 8, Multi-Phase Project, which read,
in part as follows [original punctuation provided]:
checkbld Mission, Goals, and Governance
Completed May 2017
checkbld Strategic Operational and Business Plan
Completed November 2017
checkbld Legislation
HB 412 introduced April 2018
checkbld Interim Measures Identified
Implementing now
?Fleet/Terminal Standardization and Continued Outreach
MR. VENABLES explained that Phase 2 calls for a standardized
fleet, one with some feeder vessels that will funnel traffic
toward the hubs to allow the mainline ocean vessels to provide
service to ports further afield. He stated that it would ensure
a non-politicized environment as much as possible and
objectively consider vessel design by the marine architect and
engineers. He acknowledged that the AMHS system has had a
troubled history of trying to design the right vessel. The
proposed plan will take a fresh look at vessel design, even
considering the Alaska class vessels with respect to the design
going forward, he said. It might ultimately mean making
recommendations for modifications to the M/V Hubbard.
5:17:14 PM
MR. VENABLES reviewed some bullet points on Slide 8, noting the
Strategic Operational and Business Plan will outline some of the
steps needed, including that in Phase 3 the department should
look at the interim measures. He noted legislation including HB
412, which is a significant milestone. He appreciated that the
bill was introduced despite its flaws, which will need to be
addressed. The bill provides a credible framework to show
Alaskans an outline of how the system will be established. He
hoped going into the next legislative session that the next
version of the bill could be a lot stronger. He reiterated his
gratitude to the committee because a lot of Alaskans have been
involved and injected into the process.
5:18:51 PM
MR. VENABLES turned the presentation to Ms. Susan Bell to cover
the next steps.
SUSAN BELL, Principal, McDowell Group, introduced herself as a
life-long Alaskan. She said Elliott Bay Design Group was the
prime for Phase 2, which was the most robust study. She has
been part of the process throughout the project team of
engineers and analysts.
5:19:24 PM
MS. BELL reiterated that the group has given several
presentations to the committee and the public. She referred to
the website amhsreform.com as the site to find any forms being
referenced today. She highlighted Ms. Marquardt's dedication,
stating that from the moment Ms. Marquardt took her position as
executive director she has been carrying the Phase 2 technical
operational report with her.
MS. BELL turned to slide 9, Phase 1, which read as follows
[original punctuation provided]:
? Examined mission, goals, and governance
? Statewide summit
? Stakeholder interviews
? Case studies of other ferry systems
? Mission statement refinement
? Analysis of alternative governance models
? Recommended further exploration of public
corporation
MS. BELL discussed slide 9, noting Phase 1 set the stage for
Phase 2, which was conducted a couple of summers ago, that it
was a fairly high-level view of the project, which led into the
Petersburg Southeast Conference. This phase consisted of
coastal communities' participation, including the private and
public sectors across the state. Phase 1 had several
components, including a statewide summit that was held in
Anchorage and included stakeholder interviews. Elliott Bay
Design Group (EBDG) conducted an analysis of other ferry systems
from around the world. It helped people achieve insight into
systems such as the British Columbia (BC) Ferry System and
Washington State Ferries as well as overseas ferries, including
the Scottish [Ferry Services] since Scotland's geography is
similar. It helped people recognize that there are many ways
ferries can be operated. It also considered government
structures of other systems, such as line agencies or private
corporations. No one model can be picked up to provide the
right fit for Alaska, but examining other systems provides some
insight and flexibility in thinking about what is possible for
Alaska. The report also showed information on how much was
recovered from fares for each of these systems, which was very
relevant to the second phase of the study.
5:21:41 PM
MS. BELL related that a mission statement was developed with
input from the public and the steering committee. There was an
analysis of alternative governance models and the report
concluded with the recommendation that further exploration of a
public corporation was warranted.
5:22:25 PM
MS. BELL turned to slide 10, Purpose, which read as follows
[original punctuation provided]:
Deliver safe, reliable, and sustainable
marine transportation for Alaska residents,
visitors, and our commercial customers
MS. BELL read the revised mission statement, noting that the
mission needs to be clear and she believes this mission
statement achieves that goal.
5:23:17 PM
MS. BELL turned to slide 11, Phase 2, which read, in part, as
follows [original punctuation provided]:
? Created long-term operating and business strategy
? Revenue analysis
? Operations analysis
? Operations financial model
? Structure and benefits of public corporation
? Public and stakeholder engagement
MS. BELL said that Phase 2 consisted of a longer more complex
project phase with five main aspects. She reiterated EBDG was
in the lead position and the McDowell Group (MG) was responsible
for the revenue analysis, including onboard revenues, but MG
also examined new potential revenue sources. The MG analyzed
the structure and benefits of the proposed public corporation
and stakeholder involvement. She said the report consists of
approximately 100 pages, with an additional 100 pages of
technical appendices. She highlighted the revenue analysis and
the discussion of other public corporations in Alaska, which
helped frame the construction of HB 412.
5:24:32 PM
MS. BELL turned to slide 12, Complex System, which read, in
part, as follows [original punctuation provided]:
? 9 operational vessels
? 33 ports of call (34 terminals)
? Variable service schedules
? Aging fleet
? Terminal weight restrictions
? Personnel and travel account for 69% of operating
budget
MS. BELL added that the Phase 2 report acknowledged the broad
geographic area, the wide variations in the types of vessels,
including 33 ports and 34 terminals for the system, plus an
aging fleet. The report recognized that the AMHS is a people-
driven system; that personnel and travel account for nearly 70
percent of the operating budget. She said it is an area to
think of strategically, and the importance of considering the
employees, the management structure, and management's
relationship with the union. She related that recommendations
were made to address some of these issues.
5:24:58 PM
MS. BELL turned to slide 13, Revenue and Traffic Analysis, which
read, in part, as follows [original punctuation provided]:
? AMHS carried Alaskans from 175 communities
? Fairbanks North Star Borough
? 3,316 passengers, 1,409 vehicles
? Fairbanks, Ft. Wainwright, North Pole, Eielson,
Salcha, and more
? Bethel Census Area
? 218 passengers, 52 vehicles
? Aniak, Kipnuk, Kwethluk, Sleetmute, and more
MS. BELL reviewed ridership as listed on slide 13,
recognizing the AMHS serves 175 communities. She referred
to a map on slide 13 using yellow dots that depicted
ridership destinations throughout Alaska. She attributed
some travel in the Fairbanks North Star Borough (FNSB) to
military deployment in and out of Alaska. She said the
Bethel Census Area indicated the AMHS served 218 passengers
and 52 vehicles whose destination was the Bethel area
[traveling in part via the AMHS]. She stated that
understanding the market and how Alaskans are using the
system was an important piece of the analysis.
5:26:08 PM
MS. BELL turned to slide 14, Revenue and Traffic Analysis,
which read, in part as follows [original punctuation
provided]:
? Visitors using AMHS also travel Alaska's road system
? 51% visit Anchorage
? 36% visit Denali
? 26% visit Seward
? 25% visit Fairbanks
23% visit Homer
? 22% visit Valdez
MS. BELL referred to a map on slide 14 that showed percentages
of ridership for Fairbanks, Denali National Park, Anchorage,
Homer, Seward and Valdez, as well as Southeast Alaska
communities.
5:26:51 PM
MS. BELL turned to slide 15, Revenue and Traffic Analysis, which
read, in part, as follows
?Maintains existing benefits
head2right Inter-departmental coordination
head2right Public purpose of system
head2right Access to federal funding
?Addresses limitations
head2right Frequent turnover in senior leadership
head2right Indirect labor negotiations
head2right Short-term planning horizon
?Additional benefits
head2right Incorporate board expertise
head2right Operate in business-like manner
head2right Align labor and management interests
head2right Reduce labor costs strategically
5:30:56 PM
MS. BELL turned to slide 16, Additional Findings, which read, in
part, as follows [original punctuation provided]:
? AMHS will always require public funds to
provide safe and reliable transportation
? Best opportunity for revenue growth is
through stabilized funding
? Transitioning to a modern and standardized
fleet creates critical cost savings
Use revenue and market analysis to guide
actions
? Bellingham is an essential revenue source (44% of
total)
? Non-residents account for 42% of revenue
MS. BELL outlined a few more takeaways from the in-depth
phase 2 report, which indicated that the AMHS's system will
always require public funds due to the geography,
population and the revenue and operational expense. She
pointed out that stabilized funding allows people to make
business and personal decisions that affect profits, noting
it is not just the amount of the funding but the timing of
the funding that matters. She said there is still a need
look at ways to achieve an alignment between the budget
cycle and the summer season. She stated there were few
efficiencies that come from having a modern fleet, which is
the goal. Part of what has been looked at in the Phase 4
work being implemented is to use a revenue and market
analysis to guide decision making, she said.
5:32:18 PM
MS. BELL turned to slide 17, Phase 3 which read, in part,
as follows [original punctuation provided]:
? Building structure and momentum
• Legislation introduced (HB 412)
• Sustaining public support
• Identifying interim measures
MS. BELL stated that Phase 3 was small and spanned the winter
months and legislative session. She noted that Mr. Venables
performed outreach by speaking to various chamber of commerce
and trade organizations, ranging from the Alaska Travel Industry
Association to the Alaska Municipal League. Speaking to
identifying interim measures, she suggested that the AMHS Reform
website has materials posted, including a short memo with nine
recommendations.
5:33:24 PM
MS. BELL turned to slide 18, Interim Measures, which read, in
part, as follows:
? Actions that can be taken now
Work towards more a sustainable, business-like
organization
? Align with longer-term objectives
? 1: Stabilize Funding
Increase revenues and align with seasonality
2: Fleet and Terminal Standardization
Financial and operational efficiencies
? 3: Robust Market and Revenue Analysis
Allows AMHS to deploy resources effectively
MS. BELL, with respect to considering a public corporation,
indicated it would take legislative and public momentum, and
support and time to transition to a corporate system. She
reviewed the bullet points with respect to longer-term
objectives, including stabilizing funding to increase revenue
development and align with seasonality since the peak operating
season is short. She recommended that the information on
revenue analysis be shared so people understand how the system
serves the public.
5:35:37 PM
MS. BELL turned to slide 18, Interim Measures cont., which read,
in part, as follows [original punctuation provided]:
? 4: Address Labor Relations
? Negotiate directly; reduce labor costs strategically
5: Board Development
? Phase 2 recommended 7-member board
? 5 with needed business/transportation expertise AND
1 representative of union employees
? Seated as soon as possible to assure a smooth
transition to the public corporation
MS. BELL said she touched on addressing labor relations on
previous slides, noting that direct negotiations could help
align labor and management interests. She related that union
representatives have been part of the steering committee. Part
of the Phase 2 outreach included a survey of employees, as well
as an online survey available to the public. She added that
reducing costs strategically and building some capacity
internally is something that could help the organization move
forward.
MS. BELL directed attention to board development, noting that
the steering committee spent substantial time considering
models. In the Phase 2 report, the board recommended a seven-
member board, and suggested that five members needed to have
expertise in business and transportation, plus one member needed
to represent union employees. She related that the group
reviewed other ferries and how the corporate structure works for
the Alaska Railroad Corporation (ARRC). She highlighted board
member expertise and development as a key element going forward.
Finally, she mentioned that seating the board and not waiting
for the corporation to be formed would provide a smooth
transition.
5:38:18 PM
MS. BELL turned to slide 19, Interim Measures cont., which read
as follows:
? 6: Corporation Development
? Advance preparation needed for smooth transition
? 7: Employee Communications
? Improved, but further face-to-face meetings needed
? 8: Explore New Revenue Sources
? Non-operating revenues, partnerships, concessions,
and shoreside potential
? 9: Maintain Public Support
? Continue project momentum
MS. BELL suggested numerous steps were needed in terms of
corporation development, including considering models such as
the ARRC, Alaska Industrial Development and Export Authority
(AIDEA) and the Alaska Permanent Fund (APF). For example,
reviewing bylaws and articles of incorporation in advance could
help provide a seamless transition, she said. She underscored
the importance of fostering employee communications. She
acknowledged improvements have occurred, but due to changes and
uncertainty it will take time and communication. She said she
previously mentioned analysis done by the McDowell Group in
Phase 2 as part of the broader project, which not only looked at
the AMHS's current revenue collections but also considered
partnerships, concessions, and non-operating revenue sources
such as bonding, capital endowment and gaming. She acknowledged
that these new revenue sources might not all be practical;
however, she felt it was valuable to have a suite of things to
consider as possible fits for the organization. Shoreside
potential exists with land assets and terminals, which could
provide an array of tools moving forward that are yet untapped.
Finally, maintaining public support is important, she said.
5:40:21 PM
MR. VENABLES thanked the committee and particularly Co-Chair
Stutes for the leadership and support on this issue over the
past year. One of the things about the unique partnership that
this project has had with the DOT&PF and the AMHS was this
process was a non-department initiative led by Alaskans. He
pointed out ongoing fundraising continues to serve this effort.
He thanked project sponsors, including the City of Kodiak. As
the group embarks on another year of work that this fundraising
effort will continue. He characterized this as a project of
Alaskans and by Alaskans, who have invested their time and money
to participate. He reminded members that this information will
be posted to the Alaska Marine Highway Reform's website
[amhsreform.com] so that Alaskans can continue to stay informed
and provide feedback to the group.
5:43:30 PM
REPRESENTATIVE EDGMON appreciated the timeliness of this
meeting. He emphasized the AMHS importance to all coastal
Alaskans, including a large portion of his legislative district.
He thanked Mr. Venables for the presentation, noting there was a
lot to absorb and it will be a long-term effort. He asked
whether any consideration was given to solicit someone from
Bellingham serving as an ex-officio member and perhaps from
Prince Rupert, as well.
MR. VENABLES pointed out several members, including Mr. Dan
Kelly who was transferred to the Alaska Marine Lines' (AML)
Seattle office; and Mr. Dave Water, Port of Bellingham, who
serves on the Southeast Conference's Transportation Committee.
He acknowledged the suggestions were good ones, noting that
currently only Alaskans serve on the steering committee;
however, the group solicits information but has not formalized
lines of communications. He related that the port of Prince
Rupert has been somewhat active in its interactions with the
group.
5:46:07 PM
SENATOR DENNIS EGAN, Alaska State Legislature, asked to have
copies of the PowerPoints e-mailed to his office.
CHAIR STUTES said Mr. Venables has agreed to do so.
SENATOR EGAN appreciated the meeting and hoped to keep involved.
5:46:59 PM
SENATOR GARY STEVENS, Alaska State Legislature, expressed
concern on whether the proposed system would be better than the
current one. He characterized obtaining funding as "a fight"
each year and that legislators who serve coastal communities
were the ones who really care [about the AMHS]. He asked for
further clarification on the level of state subsidizes for the
ferry system, in terms of every dollar a passenger spends. He
wondered who would cover the costs of the AMHS if it becomes a
corporation. He asked for further clarification if the state
currently covers one-third of the costs of operating the AMHS.
MR. VENABLES related his understanding that the ferry collects
just under 40 percent of its costs. He emphasized that the
department has committed to find efficiencies for the AMHS to
improve those figures; however, the system will always need
public support to achieve its mission. The corporation would
not make that separate; however, it would provide more
transparency and efficiency, so the dollars will be better
spent. Further, a corporation would provide a mechanism for
partnerships so more revenue can be generated. He acknowledged
that everyone shares that concern, but he believes that having a
corporation run by people who are passionate about its mission
brings in a whole different element than the status quo.
5:49:14 PM
SENATOR STEVENS wondered how the system could be changed without
increasing the prices dramatically. He said, "I'm really tired
of hearing about the Marine Highway System compared to the
Alaska Railroad - it's not the same thing." He pointed out that
the ARRC has land, leases it out to help fund the railroad. The
AMHS does not have that capability since it does not own
anything except for aging vessels. He did not think the
comparison made sense.
MR. VENABLES agreed.
5:50:46 PM
REPRESENTATIVE DRUMMOND pointed out that Alaska Marine Highway
System collected roughly 40 percent of its costs through user
fees and asked whether someone could identify any paved highway
in Alaska that collects 40 percent of the associated costs in
user fees.
5:52:00 PM
SENATOR EGAN answered "zero."
5:52:53 PM
CHAIR STUTES thanked Kodiak Mayor Branson, Kodiak and Kodiak
Island Borough Mayor Rohrer for participating. She thanked
members for agreeing unanimously to introducing HB 412, relating
that some members serving on the committee are from Interior
Alaska and the Mat-Su Valley. She expressed her gratitude.
5:53:07 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 5:53
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HTNS AMHS Reform Update 8.16.18.pdf |
HTRA 8/16/2018 5:00:00 PM |
PowerPoint AMHS Reform Project |
| HB0412A.PDF |
HTRA 8/16/2018 5:00:00 PM |
HB 412 |