Legislature(2021 - 2022)BARNES 124
02/15/2022 01:00 PM House TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Alaska Marine Highway Operations Board: Moving Forward | |
| 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
February 15, 2022
1:13 p.m.
MEMBERS PRESENT
Representative Grier Hopkins, Chair
Representative Sara Hannan, Vice Chair
Representative Louise Stutes
Representative Harriet Drummond
Representative Tom McKay
Representative Kevin McCabe
MEMBERS ABSENT
Representative Mike Cronk
OTHER MEMBERS PRESENT
Representative James Kaufman
COMMITTEE CALENDAR
PRESENTATION: ALASKA MARINE HIGHWAY OPERATIONS BOARD: MOVING
FORWARD
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
KATHERINE KEITH, Change Management Director
Alaska Marine Highway Operations Board
Department of Transportation and Public Facilities
Anchorage, Alaska
POSITION STATEMENT: Co-presented a PowerPoint, titled "Alaska
Marine Highway Operations Board: Moving Forward."
DOM PANNONE, Director
Division of Administrative Services
Department of Transportation and Public Facilities
Juneau, Alaska
POSITION STATEMENT: Co-presented a PowerPoint, titled "Alaska
Marine Highway Operations Board: Moving Forward."
ACTION NARRATIVE
1:13:34 PM
CHAIR GRIER HOPKINS called the House Transportation Standing
Committee meeting to order at 1:13 p.m. Representatives
Hopkins, Hannan, Stutes, Drummond, McKay, and McCabe were
present at the call to order.
^PRESENTATION: Alaska Marine Highway Operations Board: Moving
Forward
PRESENTATION: Alaska Marine Highway Operations Board:
Moving Forward
1:14:15 PM
CHAIR HOPKINS announced that the only order of business would be
a presentation on the Alaska Marine Highway System operations.
1:14:42 PM
KATHERINE KEITH, Change Management Director, Alaska Marine
Highway Operations Board (AMHOB), Department of Transportation
and Public Facilities (DOT&PF), offered the PowerPoint
presentation, titled "Alaska Marine Highway Operations Board:
Moving Forward" [hard copy included in the committee packet].
She provided an overview of the topics to be discussed,
including information about AMHOB's kickoff meeting, short term
goals, long term planning, capital projects, proposed operating
budget for fiscal year 2023 (FY 23), and staffing shortages.
MS. KEITH stated that as a result of House Bill 63 [passed
during the Thirty-Second Alaska State Legislature] there is a
focus on creating a short-term plan, long-term plan, and
performance goals in collaboration with DOT&PF. She stated that
the board is composed of Deputy Commissioner Rob Carpenter,
along with eight public members, a union representative, and an
Alaska Native organization representative. The committee also
includes two members appointed by the governor, two members
appointed by the speaker of the house, and two members appointed
by the senate president. She stated that terms are staggered
and set by statute. She stated that the kickoff meeting on
February 11, 2022, had been organizational in nature, and board
members unanimously voted for Shirly Marquardt as Chair and
Wanetta Ayers as Vice Chair. [Biographies detailing the
professional experience of board members can be found on slide
6.]
1:18:36 PM
MS. KEITH stated that AMHOB members prioritize comprehensive
long-term fleet planning so preparations can be made for
recommendations on capital funding. She expressed the opinion
that making decisions is difficult without a long-term plan, so
the board works to establish systemic-performance measures to
help identify progress in the short and long term. She
acknowledged that staffing shortages and governance issues
exist. In regard to low-emission electric ferries, she
discussed potential federal funding from the Infrastructure
Investment and Jobs Act (IIJA). She stated that AMHOB has
recurring biweekly virtual meetings, and there is a significant
amount of public participation, with the kickoff meeting having
over 1,000 viewers.
1:21:19 PM
MS. KEITH, in response to a question from the committee, stated
that she is the liaison for direct information inquiries. She
stated that DOT&PF personnel are welcome to contact members of
the board directly, but members of the public are encouraged to
access its website. This prevents the board from being
overwhelmed with similar data requests.
1:22:31 PM
MS. KEITH supplied current vessel updates including: the Tazlina
is crewed and began sailing on February 4; the competitive
bidding process for the Tustumena replacement vessel will begin
in March; the federal capital improvement project to install
crew quarters on the Hubbard has begun; and Prince Rupert is on
target as a port on May 1.
1:24:18 PM
MS. KEITH detailed the current fleet status which includes four
vessels currently in service. She stated that the Aurora is in
Prince William Sound; the Lituya is going back and forth between
Metlakatla and Ketchikan; the Tazlina is providing service to
Northern Panhandle communities; and the Matanuska is travelling
between Alaska and Bellingham. She stated that the federally
funded projects for the Tustumena and the Hubbard have started,
while the LeConte, Columbia, and Kennicott are in their state-
funded overhauls.
1:24:38 PM
MS. KEITH, in response to Representative McCabe, provided an
update on the Malaspina's status. She agreed that the estimated
cost of $500,000 per year to maintain the Malaspina in layup is
significant. The vessel is currently being prepared for
disposal, and a list of auction items still needs to be
completed. She stated that a document has been prepared with
the cost estimates for the Malaspina, along with best-interest
findings. After verification the document can be shared with
the committee; however, she could not provide a date for this.
She assured the committee that removing the Malaspina as a state
asset is a top priority.
1:33:37 PM
MS. KEITH detailed some short-term goals of AMHOB, which include
contracting a recruitment specialist to address staffing issues;
creating an operational schedule for FY 23 by the end of
February; meeting recruitment targets by March 1 to sail the
Columbia; partnering with unions to address staffing issues;
wrapping up union negotiations by March 31; creating a FY 23
business plan by the end of March; and having the Columbia
sailing to Prince Rupert by May. She added that this sailing
will involve a lengthy process of hiring about 100 workers, who
will need training and certification by the U.S. Coast Guard.
1:41:27 PM
MS. KEITH gave an outline of the FY 23 short term funding plans.
She addressed the operating budget, the marine highway fund, the
general fund, and federal funds, which includes the Statewide
Transportation Improvement Plan (STIP).
1:48:53 PM
DOM PANNONE, Administrative Services Director, Department of
Transportation and Public Facilities, continued the presentation
on slide 14 and discussed the governor's proposed operating
budget for AMHS, FY 23, which, is $141,754,000. This accounts
for the maximum service provided, which is approximately the
same service provided in FY 19. He stated that $135 million of
this amount would come from IIJA, under Section 71103, which
designates funds for essential ferry services for rural
communities. He stated that $200 million is made available
annually from this new program; however, $5 million of the
budget is allocated for items which would not be funded
federally, such as marketing, food sales, and alcohol sales. He
added that other funds listed in the budget are for capital
improvement and engineering projects.
1:52:02 PM
MR. PANNONE discussed the figures on slide 15, comparing FY 19,
FY 20, and FY 21 budgets with the FY 22 management plan and the
governor's proposed budget for FY 23. He pointed out that there
is a significant increase in the planned port of calls and
planned weeks of service. This creates a $23 million increase
to the operating budget. He advised that unexpected
circumstances may decrease the number of planned weeks of
service.
1:54:14 PM
MR. PANNONE described the graph on slide 16, which shows the
annual revenue and actual weeks of services going back to FY 14.
He pointed out that there was a significant drop off in 2020 and
2021. He stated that $41 million of revenue is projected for
the current fiscal year, and then $53 million is projected for
FY 23, with the expectation that travel will return to normal.
He stated that $5 million is in the operating budget and $20
million in the overhaul budget. Any amount more than the
budgeted needs would be deposited in the AMHS fund and remain
there until further action is taken.
MR. PANNONE, in response to comments from the committee,
emphasized that millions of dollars go into building highways,
and he expressed the opinion that this will never break even.
He continued that a responsibility exists to provide a marine
highway system for access to small villages, some of which lack
airports. He concluded that the ferry system should be treated
as a federal highway. He suggested that a correlation exists
between early schedule access and increased usage of AMHS, and
this results in increased revenue.
2:00:48 PM
MS. KEITH said that AMHS currently has a $144 million program,
half of which is supplied by the state and the other half by
federal funds. A large portion of this is for construction
projects, including the Hubbard and the Lituya. She stated that
AMHS has approximately $40.1 million programmed for shoreside
projects, with a balance of remaining work of $17.6 million. A
large portion of shoreside projects involve federal funding,
with some state funds currently being used for Prince Rupert.
The Tustumena replacement vessel will be designed by Glosten, a
marine engineering firm. She stated that further public review
will begin again soon because the last public comments occurred
in 2014.
2:05:35 PM
MS. KEITH said that AMHOB wants to focus on long-term planning,
including a 20-year fleet-optimization plan. This plan will be
discussed at the next meeting. She explained that a 20-year
business and operations draft had been completed in the past by
consultants, but she advised that creating a plan with knowledge
of current conditions is important. There is currently a five-
year engineering masterplan which projects the timing for state-
funded overhauls and federally funded projects. She stated that
this document shows planned projects which are not yet funded,
as the plan is only a suggestion of what it will take to
continue to offer service through AMHS in the years ahead. She
stated that creating a five-year engineering masterplan requires
an understanding of a year-by-year maintenance list for each
vessel. She stated that Glauson has been hired to come up with
a list which outlines the costs and prioritizes the projects for
each vessel. She referred to slide 22, describing that the
items in red represent either urgent work or items costing over
$1 million. She pointed out that items in green represent
upgrades or lifecycle costs, which are less urgent and require
less funding. She concluded that the total recommended work
would cost approximately $224 million.
2:15:53 PM
MS. KEITH mentioned that, pertaining to IIJA, AMHS is preparing
for potential funding by creating partnerships with communities
and looking into prospects for low-emission ferries. She
expressed concern about the viability of the technology of
electric ferries in Alaskan waters; however, she stated that
assurances have been given concerning certain routes. After
determining the viable routes, AMHOB can consider addressing the
port infrastructure requirements, and then low-emission projects
could potentially move forward. She asserted that funding
through IIJA presents the opportunity for AMHS to move the fleet
forward without a heavy reliance on fossil fuels. Currently the
newer vessels in the fleet are diesel-hybrid vessels and are not
in the same category as electric vessels, which are being
considered under the Federal Transit Administration's electric
or low-emitting ferry pilot program.
Representative Hannan commented that the community of Skagway is
interested in funding for an electric ferry to provide service
between Haines and Skagway.
2:21:58 PM
MS. KEITH referred to slide 24, which referenced staffing
shortages. When service levels were reduced in FY 19, many
employees left AMHS. She argued that keeping a consistent ferry
schedule is key to retaining employees. She pointed out that
there are several positions with a current vacancy rate of
around 60 percent, adding that over 250 entry level stewards
will need to be hired. Currently AMHS is running its winter
schedule with significant staffing holdovers and vacation
denials. She expressed the opinion that this does not help crew
morale. She indicated that there is competition for stewards
with the cruise ship industry as well. She said that if
staffing goals are not met by March 1, the Columbia will not be
available for operation by May 1. Even though a recruitment
specialist is working to fill these positions, she said, it can
take three to four months for an unqualified hire to get
training for a new position. Also, there is a financial
requirement on behalf of the new hire to get certifications.
2:26:53 PM
MS. KEITH said AMHOB is helping to prioritize the many obstacles
that AMHS is facing currently. Some opportunities for
improvement include modernizing the fleet, improving staff
morale by increasing communication, redefining service levels
based on current needs of communities, and teaming up with other
departments for success.
MS. KEITH pointed out that slide 27 provides AMHOB contact
information, including an online option for public input.
2:37:07 PM
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 2:37
p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Presentation - AMHS House Transportation Committee 02.15.2022.pdf |
HTRA 2/15/2022 1:00:00 PM |
Alaska Marine Highway System - DOTPF Change Management |