Legislature(2021 - 2022)SENATE FINANCE 532
03/23/2021 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| Alaska Marine Highway System (amhs) Reshaping Group Final Report | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
SENATE FINANCE COMMITTEE
March 23, 2021
9:00 a.m.
9:00:43 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:00 a.m.
MEMBERS PRESENT
Senator Click Bishop, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lyman Hoffman
Senator Donny Olson
Senator Natasha von Imhof
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Senator Jesse Kiehl
PRESENT VIA TELECONFERENCE
Admiral Tom Barrett, Chair, Alaska Marine Highway Reshaping
Group.
SUMMARY
^ALASKA MARINE HIGHWAY SYSTEM (AMHS) RESHAPING GROUP FINAL
REPORT
9:02:50 AM
ADMIRAL TOM BARRETT, CHAIR, ALASKA MARINE HIGHWAY RESHAPING
GROUP (via teleconference), discussed his background.
9:05:56 AM
Admiral Barrett outlined the findings in the "Alaska Marine
Highway Reshaping Work Group, Report to the Governor" (copy
on file), but remarked that his comments might also be his
own opinions. He stressed that the current fleet was full
of aging fleets, except for two new fast vessels. He
remarked that Alaska had some of the toughest waters on the
planet, with a very limited infrastructure. He commented
that operations had not been reliable in recent years. He
shared that the maintenance system was not in place for the
aging fleet. He stressed that the current system did not
match the service requirements. He also pointed out that
the needs had changed since the creation of the ferry
system. He noted that there was a history of ad hoc
decision making.
9:11:05 AM
Admiral Barrett shared the focus of the priorities. He
provided some recommendations. He pointed out that the
importance of the system for the communities obvious,
because of basic transportation and food security. He
remarked that there was no specific route that showed
revenues matching the operating costs. He stressed that
money needed to be appropriated into the system to maintain
operations. He remarked that there was no maritime
expertise on the Advisory Board, so felt that needed to
change. He felt that someone needed to understand
fundamental maritime maintenance expertise on the board in
order to challenge the planning when evaluating the data.
9:15:50 AM
Admiral Barrett remarked on specific requirements of
vessels, and stressed that the vessels needed to meet both
the U.S. and Canadian standards. He reiterated the need for
maintenance planning. He stressed that the importance of
stabilizing the budget, because currently there was only a
three-month process. He pointed out that funding can be
provided for the ferry system many years in advance. He
stressed that there must be a budget in order to plan.
9:20:03 AM
Admiral Barrett continued to note that the there were
licensing requirements which may handcuff the ability to
manage the fleet effectively. He stressed that the revenue
was more related to vehicles, and not passenger revenue.
9:26:35 AM
Admiral Barrett stressed that the mission must be
completed, but remarked that there was not the same to do
the job efficiently. He had sympathy for the people who
were working to make the system better.
Co-Chair Stedman recalled that he had visited the shipyard
in Ketchikan, and noted that there was an issue with
scheduling. He asked about the benefit of better scheduling
for the shipyard.
Admiral Barrett replied the shipyard needed to plan, but
were currently unable to efficiently schedule the work and
renovations of the vessels. He stated that the shipyard
needed to have long-term planning in order to do the work.
9:30:54 AM
Co-Chair Stedman remarked that the funds available for AMHS
were virtually completely depleted. He wondered about how
to fix the situation.
Admiral Barrett replied that there must be stabilization.
He stressed that there needed to be money invested up front
in order to eliminate the further change orders needed on
the vessels.
9:35:26 AM
Co-Chair Stedman remarked that AMHS had been reduced by
approximately 50 percent in scope and scale over the last
several years. He felt that there needed to be
stabilization of operations to provide some forward-
planning opportunities.
Senator Wielechowski wondered whether it was the opinion
that AMHS should be revenue neutral.
Admiral Barrett replied in the negative, and explained that
the revenue neutral choice was up to the legislature and
the administration. He pointed out that there had been
discussions about a way to reshape and streamline the
system with $25 million or less of state subsidy.
Senator Wielechowski wondered whether there was a
recognition that small communities needed marine highway
service.
Admiral Barrett responded that there was an examination of
reducing service, but it was from the dollar perspective.
Senator Wielechowski wondered how many small communities
would lose service in the recommendations that were
included in the report.
Admiral Barrett stated that there were more reductions that
complete loss. He remarked that there might be a complete
reduction in places like Tenakee Springs and Seldovia.
9:41:14 AM
Co-Chair Stedman stressed that predictability is more
important than the number of ferries on the schedule.
Senator Hoffman wondered whether there was consideration
for changing the AMHS revenue stream.
Admiral Barrett replied that it was not a specific subject
of examination.
Senator Hoffman felt that it might take a change in law to
allow for more revenue for the ferry system.
Co-Chair Stedman remarked that it was a federal law
limiting the ferry infrastructure revenue.
Senator Wilson wondered how much federal money was given up
in order to sole source the construction of boats in
Alaska.
Admiral Barrett replied that $120 million was paid for the
new ferries, and they were not competed in construction. He
noted that the cheapest shipyards were in the Gulf of
Mexico.
Co-Chair Stedman furthered that there was an attempt to
construct the ships in Alaska.
9:46:49 AM
Senator Wielechowski queried the recommendations on
predictability.
Admiral Barrett replied there must be a multi-year budget
planning process; and there must be a reliability system.
Senator Wielechowski queried the timeline for replacing the
mainline ferries.
Admiral Barrett replied that it was approximately ten years
ago.
9:51:17 AM
Senator Olson queried the transportation needs transition.
Admiral Barrett replied that there were fundamental changes
in the customer market that occurred over the course of a
few years.
Senator von Imhof wondered whether freight could supplement
the revenue.
Admiral Barrett replied that there could be a freight
offset on some boats like the run from Bellingham.
9:58:05 AM
Senator von Imhof queried the options for the smaller
communities without the ferry system.
Admiral Barrett responded that the barge and other boat or
road options.
10:00:14 AM
Co-Chair Stedman stressed that one of the difficulties was
the labor agreement contracts, which do not allow for
flexibility.
Senator Wilson wondered whether there was the option to buy
a used ferry to bridge the gap in the build time.
Admiral Barrett replied in the affirmative, but most of
those ferries were not built for the United States.
Co-Chair Stedman asked for any final comments.
10:03:08 AM
Admiral Barrett replied that he did not have any further
comment and thanked the committee.
Co-Chair Stedman remarked on more work in subcommittee to
address the AMHS.
Co-Chair Stedman discussed the following day's agenda.
ADJOURNMENT
10:07:31 AM
The meeting was adjourned at 10:07 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 032321 Report-to-Governor_AMH-ReshapingWorkGroup-10022020.pdf |
SFIN 3/23/2021 9:00:00 AM |
AMHS Reshaping Group |