Legislature(1997 - 1998)
03/11/1997 01:45 PM Senate TRA
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
SENATE TRANSPORTATION COMMITTEE
March 11, 1997
1:45 p.m.
MEMBERS PRESENT
Senator Jerry Ward, Chairman
Senator Gary Wilken, Vice Chairman
Senator Lyda Green
Senator Rick Halford
Senator Georgianna Lincoln
MEMBERS ABSENT
All members present.
OTHER MEMBERS PRESENT
Senator Robin Taylor
Senator John Torgerson
COMMITTEE CALENDAR
Overview by the Port of Bellingham
SENATE BILL NO. 27
"An Act relating to the relocation to Ketchikan of certain offices,
functions, and employees of the Alaska marine highway system."
- HEARD AND HELD
PREVIOUS SENATE ACTION
SB 27 - No previous Senate action to record.
WITNESS REGISTER
Jim Darling, Executive Director
Port of Bellingham
625 Cornwall Avenue
Bellingham, Washington 98225-5017
POSITION STATEMENT: Presented a slide presentation on the Port of
Bellingham.
Pete Kremen, Executive
Whatcom County
Washington
POSITION STATEMENT: Expressed interest in continuing partnership.
Mark Asmundson, Mayor
City of Bellingham
Washington
POSITION STATEMENT: Discussed the promotion of tourism.
Jack Meyers, General Manager
Maritime Contractors, Inc.
Bellingham, Washington
POSITION STATEMENT: Stressed the need for competitive bids.
Joe Ambrose, Staff
Senator Taylor
State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Read the sponsor statement.
Jan Sande, Captain
Master on the Aurora
Alaska Marine Highway System
Ketchikan, Alaska
POSITION STATEMENT: Supported SB 27.
Erve Hagerup, Captain
Columbia
Alaska Marine Highway System
Washington
POSITION STATEMENT: Discussed the need for better communication.
Robert Glenn
Alaska Marine Highway System
Ketchikan, Alaska
POSITION STATEMENT: Discussed problems with the AMHS.
ACTION NARRATIVE
TAPE 97-7, SIDE A
Number 001
CHAIRMAN WARD called the Senate Transportation Committee meeting to
order at 1:45 p.m. and invited the Port of Bellingham to provide
its overview to the committee.
JIM DARLING , Executive Director of the Port of Bellingham,
introduced the Port of Bellingham delegation present at the
meeting. Mr. Darling then began the slide presentation by saying
that Bellingham considers itself the front steps of Alaska in terms
of the travelling public. The Alaskan experience begins at the
Bellingham ferry terminal. Mr. Darling showed an aerial slide of
the Port of Bellingham as well as a slide of the interior of the
terminal. Mr. Darling informed the committee that the ferry
terminal was constructed in 1989 by the port who floated bonds in
order to construct the terminal at a cost of approximately $13
million. The terminal was built specifically for Alaska's ferries,
prior to that Alaska's ferries went to the Port of Seattle. In
1988, Alaska went through a competitive process during which
Bellingham was selected as the southern terminus. Mr. Darling
pointed out that the terminal has developed into more and has
become a focus for the community.
Mr. Darling discussed the growing market for local cruises/tours
from the terminal. The terminal is a 10 minute drive from
Bellingham International Airport which is a port of entry.
Currently, Bellingham International Airport serves SEA-TAC with
commuter flights, but during tourist season there are flights to
Canada and the interior of Alaska. Mr. Darling informed the
committee that the reinstatement of train service was the most
recent addition at the terminal. AMTRAK markets the Northwest, the
train can be taken to Bellingham and then the ferry to Alaska. Mr.
Darling noted that the State of Washington is working with AMTRAK
regarding an additional train. Mr. Darling showed a slide of the
interior of the train station to once again highlight the quality
of the train station and the ferry terminal. The train station
also houses Greyhound which also serves the Northwest and is also
able to do intermodal transfers.
Number 140
Mr. Darling informed the committee that the Bellingham run began in
1989 with a ridership of 38,000-42,000. In 1992 and 1993, the port
served about 40,000 passengers and 10,000 vehicles. During that
time the MV/Taku was running twice a week in the summer and the
port experienced 73 and 69 sailings respectively. Due to
repositioning issues in Southeast Alaska in 1994, single sailings
began and the ridership fell to 30,000 for the year. Ridership has
since increased and continues today. Mr. Darling showed a slide of
the terminal under construction in 1989 when emphasizing the amount
of investment from Bellingham and Whatcom County. This represents
the communities commitment.
Mr. Darling reviewed the financial terms between Alaska and the
Port of Bellingham. The terminal building is on a 20 year lease
which is a flat charge of $100,000 per year; there are no
inflationary adjustments included. Further, operating charges help
pay for operations. The port does all the ticketing and
reservations for the southern terminus with the Port of
Bellingham's employees. The services agreement and the operating
charges have remained flat over the past two years due to
efficiencies in the ticketing operation. Mr. Darling indicated
that Alaska is receiving a bargain with regards to ticketing.
There are also ramp charges that are paid for by the marine
highway. Mr. Darling did not anticipate a substantial change in
the operating costs which may experience some inflationary
pressure. In conclusion, Mr. Darling informed the committee that
about 40 percent of the traffic on the ferry from Bellingham goes
to the Interior of Alaska.
Number 232
CHAIRMAN WARD asked what the Port of Bellingham was politically.
JIM DARLING informed the committee that there are 78 ports in
Washington. The ports are special purpose municipal government
agencies. There are six ports in Washington that are countywide,
of which the Port of Bellingham is included. The port has three
elected commissioners, elected by geographic district. The port
has the ability to levy a tax and the Port of Bellingham accounts
for about 3.5 percent of the tax in Whatcom County. Mr. Darling
noted that decisions are made with regard to rate of return on
investments. The port can issue tax exempt financing. Further,
the port has the power of eminent domain just as a municipality.
SENATOR LINCOLN asked if Alaskans were hired for reservations and
ticketing and also are brochures on Alaska placed in the terminal.
JIM DARLING said that the port is not required to hire Alaskan
residents or persons who have lived in Alaska. However, all
employees are sent to Alaska on the ferry. Also the local
convention bureau hosts an information booth about Alaska all day
which provides hundreds of brochures on Alaska. Mr. Darling noted
that there is also a program which encourages people waiting for
the ferry to visit Fairhaven, the historic district of Bellingham.
Through the Merchants Association, training about Alaska occurs.
Mr. Darling emphasized the need to receive advanced ticket lists
for the ferry in order to send information about Alaska and
Bellingham to travellers before making all their plans.
Number 298
CHAIRMAN WARD believed that when a person calls the 800 number for
Alaskan information on driving the Alcan, the person also receives
information regarding the marine highway system. Perhaps, that
list should be available as well.
SENATOR LINCOLN inquired as to the number of employees in the
ticketing and reservation office. JIM DARLING said the office
employs about 4.5 employees, and noted that some are part-time
employees in the summer.
SENATOR LINCOLN encouraged the port to hire some Alaskans,
especially in the ticketing and reservation positions. JIM DARLING
pointed out that there is a low turn over rate for those positions.
PETE KREMEN , Whatcom County Executive, appreciated that Bellingham
is the southern terminus for the AMHS. Mr. Kremen hoped to develop
a working partnership with Alaska for many years.
CHAIRMAN WARD asked if an expanded marketing program for the
terminal had been undertaken. PETE KREMEN clarified that Whatcom
County is not charged with fostering or improving the usage of the
ferry system. However the City of Bellingham, Whatcom County, the
Port of Bellingham, the Chamber of Commerce and Industry, the
Economic Development Council, and the private sector are working
together in order to promote Bellingham and its tie to Alaska with
the marine highway system. This collaborative effort can improve
the usage.
Number 347
MARK ASMUNDSON , Mayor of Bellingham, noted Bellingham's long
standing relationship with Alaska. Mr. Asmundson acknowledged the
benefits to Bellingham from the traffic to Alaska. Mr. Asmundson
said that an important part of Bellingham's future is tourism,
therefore it is in the city's interest for the ferry to succeed.
Perhaps, the tourist angle for the ferry has not been explored
enough, particularly with regard to the shoulder seasons.
SENATOR LINCOLN inquired as to who Mr. Asmundson is working with to
promote tourism. MARK ASMUNDSON informed the committee that part
of the reason for this trip was to determine who to work with on
tourism. Mr. Asmundson indicated the need to be consistent with
the work and the promotions of the AMHS. Furthermore, combined
marketing between Bellingham and Alaska for shared interests would
expand efficiencies with limited resources.
CHAIRMAN WARD offered to work with Mr. Asmundson and noted that
Senator Taylor may have some thoughts on the marketing.
JACK MEYERS , General Manager of Maritime Contractors, Inc.,
understood that much work is going to the Ketchikan shipyard
without competition. The Maritime Contractors, Inc. have just
completed a SOLAS upgrade on the Aurora. Mr. Meyers did not
believe that Ketchikan could have done the same job in the same
amount of time as the Maritime Contractors, Inc. did due to the
complexity and time constraints of the job. Mr. Meyers believed
that more for one's money would be received with competitive bids.
JIM DARLING thanked the committee for its time. He noted that the
port does work with AVA and the AMHS on tourism issues.
Number 417
SENATOR TAYLOR explained that Bellingham is present due to the
problems with Seattle. Seattle provided one of the poorest
facilities and failed to maintain the facility and charged more
money than Bellingham currently charges. When this was put out to
bid, the Port of Seattle offered the same lease terms as in the
previous year while the Port of Bellingham and the Port of Tacoma
had fairly competitive bids. The Port of Bellingham was chosen and
the port has been wonderful to work with.
Senator Taylor was frustrated with Mr. Meyers comments. The State
of Washington does not send any of its ferries outside its borders
to be worked on. Senator Taylor emphasized that Alaska would like
to bid on that work.
CHAIRMAN WARD noted that there would be future contact with the
Port of Bellingham regarding the operations and the possibility of
using Bellingham as a model for Alaska. Chairman Ward thanked the
Port of Bellingham for coming.
SB 27 FERRY SYSTEM HEADQUARTERS IN KETCHIKAN
Number 463
CHAIRMAN WARD announced that SB 27 was the final order of business
before the committee.
JOE AMBROSE , Staff to Senator Taylor, read the following sponsor
statement into the record:
Ten years ago, Acres International, a Canadian firm contracted to
study the Alaska Marine Highway System, reported what it termed "an
extraordinary degree of mistrust between ship and shore that has
its root in the overall relationship between management and staff".
Acres stated flatly that "ship systems and operations cannot
function in isolation from the shore, both are interdependent.
There must therefore be an effective dialogue between the two,
outside union contract negotiations. Planning forums for the ship
to understand management's prerogatives, and the shore to respond
to ongoing needs of each vessel are essential".
In the decade since the Acres Report, little has happened to end
the isolation between ship and shore and many believe the situation
described 10 years ago is worse today.
SB 27 has been called a "jobs grab" bill, intended to help
Ketchikan's ailing economy. Such charges are untrue. Senate Bill
27 is intended to end the isolation between the fleet and the
administration. Locating some or all of the administrative offices
on state-owned property adjacent to the Ketchikan terminal would
end that isolation and put the administration within walking
distance of the fleet.
It is apparent the administration of the Marine Highway feels
threatened by even consideration of this move. At the end of
November, in reaction to media reports that a bill would be
introduced addressing this issue, the Marine Highway director
prepared a request for proposals. That RFP called for an economic
analysis of relocating the AMHS administrative office to Ketchikan.
The RFP had an ambitious timeline. It was released on December 2,
1996 with a proposal deadline three days later, on December 5. The
RFP originally called for completion of this $25,000 study by
January 15. That deadline has now been extended and a draft report
is due by March 15.
The system director told the Finance Sub-Committee on the DOT/PF
budget that he had received an initial draft, which has been
returned to the contractor for further review. AMHS has declined
to provide the Senate Transportation Committee with a copy of that
draft.
The relocation of some or all of the administrative offices to
Ketchikan is not a new idea nor was it prompted by concerns over
the Ketchikan economy. It was prompted by a valid concern over the
continued isolation of the Marine Highway administration from the
very fleet they are hired to manage.
In response to Senator Lincoln, CHAIRMAN WARD confirmed that SB 27
would not be passing out of committee today.
SENATOR LINCOLN inquired as to Senator Taylor's response regarding
the lack of vacant office space in Ketchikan and the need to
construct a building for this purpose. How much would such a
building cost? SENATOR TAYLOR believed that there is available
office space, but those offices are about a mile from the terminal.
Senator Taylor emphasized the need to have the offices on the site
of the terminal which will require a new building. Senator Taylor
informed the committee that the Ketchikan Borough may be willing to
provide some, if not all of the finances and lease the building to
the state. In response to Senator Lincoln, Senator Taylor indicated
that the employees would be given the opportunity to transfer. He
believed that it would be the state's responsibility to pay for the
moving costs, if the employee decided to transfer. However,
Senator Taylor pointed out that it would be an insignificant one
time expenditure. Senator Taylor believed that Mr. Hayden could
inform the committee to the cost of the move.
CHAIRMAN WARD interjected that SB 27 was being held so that the
Administration could provide the committee with a report that is
not quite final. Mr. Hayden would not be testifying today, but he
could provide that at the next hearing on SB 27.
SENATOR LINCOLN asked if some of the offices would remain in
Juneau, and if so which positions and what would the additional
travel costs be. Senator Lincoln also inquired of the cost of
travel for face to face discussions between the government and the
AMHS if located in Ketchikan.
CAPTAIN JAN SANDE , Master on the Aurora, concurred with Mr.
Ambrose's comments regarding the Acres' report. Captain Sande
discussed the great communication between the crew and the
administration in the 1960s when the offices were located in
downtown Juneau. When the sailings moved to Auke Bay, the
communication was lost and the problem has increased every year.
Captain Sande believed the move to Ketchikan was important and he
supported SB 27.
SENATOR LINCOLN asked how the communication would improve by moving
the offices to Ketchikan. CAPTAIN JAN SANDE believed that person
to person communication has an aspect not found through
communication on the phone or through writing. The proximity of a
building on the property allows better communication.
TAPE 97-7, SIDE B
Captain Sande indicated that personal contact is imperative, there
is not time for all the written communication.
Number 580
CAPTAIN ERV HAGERUP , Columbia, echoed Captain Sande's sentiments
regarding the lack of communication between the ship and the shore.
The ships and shoreside should be in proximity to have a dialogue.
Currently, the ships are ignorant about the goings on with the
fleet and often rumors are heard from the Stewards Department.
Captain Hagerup recalled that during his 30 years, there have only
been three masters meetings with the office. What other agency has
the main people in the field only meet once every 10 years? In
conclusion, Captain Hagerup emphasized the need to address the
problems with communication regardless of where the office is
located. In response to Senator Taylor, Captain Hagerup informed
the committee that he had been with the AMHS for about 31 years.
In response to Chairman Ward, Captain Hagerup reiterated that not
much communication is received from the office. Captain Hagerup
noted that he did have good communication with the port captain to
whom he called to determine which rumors were valid. Better
communication is necessary.
CHAIRMAN WARD asked if anyone else wished to testify.
ROBERT GLENN , 15 year AMHS employee and union representative on the
Executive Board, agreed with Captain Sande's, Captain Hagerup's and
Mr. Ambrose's testimony. Mr. Glenn believed it logical to have at
least some of Juneau's Central Office (JCO) personnel in Ketchikan
due to the other facilities located there. Mr. Glenn agreed with
Mr. Ambrose's comments regarding the Acres report and hoped the
committee would address the concerns presented in that report. Mr.
Glenn said that he had given Senator Taylor a brief report.
Communication is a problem. Mr. Glenn said that dispatching would
be an appropriate area to move to Ketchikan in order to better
communication regarding grievances.
Mr. Glenn emphasized the need to downsize the support services of
JCO no matter its location. The JCO positions should be reviewed
and determinations regarding the importance, efficiency and money
made from the positions should be done. The managers on the AMHS
have done just that on the ship for years. Mr. Glenn noted the
growth of the JCO. Mr. Glenn stressed the importance to know from
where the money to move the facility to Ketchikan would come.
Taking money from the operating budget for that purpose would be
unacceptable. Mr. Glenn discussed a scenario in which the ferries'
schedule is not amenable, services decrease and the prices rise
which result in less riders. Mr. Glenn also pointed out that JCO
does not participate in the winter reduction that the ferry crew
experiences each year.
CHAIRMAN WARD noted that Senator Taylor had shared the report with
the committee. With regard to the money being taken from the
operations budget, Senator Taylor has shared that concern with the
committee as well. Chairman Ward asked if anyone else wished to
testify. Hearing none, Chairman Ward held SB 27 at the request of
the Administration.
JOE AMBROSE requested that the initial draft of the report be
submitted to the committee by Mr. Hayden in order to track the
changes requested by DOT. CHAIRMAN WARD stated that Mr. Hayden
agreed to provide that initial report.
There being no further business before the committee, the meeting
was adjourned at 2:45 p.m.
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