Legislature(2001 - 2002)

03/26/2002 01:35 PM Senate TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
                         JOINT MEETING                                                                                        
            HOUSE TRANSPORTATION STANDING COMMITTEE                                                                           
            SENATE TRANSPORTATION STANDING COMMITTEE                                                                          
                         March 26, 2002                                                                                         
                           1:35 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
HOUSE MEMBERS PRESENT                                                                                                         
                                                                                                                                
Representative Mary Kapsner                                                                                                     
                                                                                                                                
HOUSE MEMBERS ABSENT                                                                                                          
                                                                                                                                
Representative Vic Kohring, Chair                                                                                               
Representative Beverly Masek, Vice Chair                                                                                        
Representative Scott Ogan                                                                                                       
Representative Drew Scalzi                                                                                                      
Representative Peggy Wilson                                                                                                     
Representative Albert Kookesh                                                                                                   
                                                                                                                                
SENATE MEMBERS PRESENT                                                                                                        
                                                                                                                                
Senator Jerry Ward, Vice Chair                                                                                                  
Senator Robin Taylor                                                                                                            
Senator Gary Wilken                                                                                                             
Senator Kim Elton                                                                                                               
                                                                                                                                
SENATE MEMBERS ABSENT                                                                                                         
                                                                                                                                
Senator John Cowdery, Chair                                                                                                     
                                                                                                                              
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
OVERVIEW: PORT OF BELLINGHAM                                                                                                    
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
JIM DARLING, Executive Director                                                                                                 
Port of Bellingham                                                                                                              
P.O. Box 1677                                                                                                                   
Bellingham, Washington 98227-1677                                                                                               
POSITION  STATEMENT:    Presented  an overview  of  the  Port  of                                                               
Bellingham.                                                                                                                     
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 02-8, SIDE A [House TRA tape]                                                                                              
Number 001                                                                                                                      
                                                                                                                                
CHAIR  JERRY WARD  called  the  joint meeting  of  the House  and                                                             
Senate Transportation  Standing Committees to order  at 1:35 p.m.                                                               
Representative  Kapsner and  Senators  Ward,  Wilken, Elton,  and                                                               
Taylor were present at the call to order.                                                                                       
                                                                                                                              
OVERVIEW: PORT OF BELLINGHAM                                                                                                  
                                                                                                                                
JIM DARLING, Executive Director,  Port of Bellingham, presented a                                                               
PowerPoint  presentation.   He informed  the committees  that the                                                               
Port of Bellingham  and Alaska are in the 13th  year of a 20-year                                                               
arrangement  with Alaska.   He  explained  that this  arrangement                                                               
comes  in a  number  of  agreements, one  of  which  is the  base                                                               
agreement in which  the Alaska Marine Highway  System (AMHS) pays                                                               
$100,000 a year for use of  the terminal in Bellingham.  There is                                                               
also   a  facility   agreement   that   covers  custodial   work.                                                               
Furthermore, the  Port of Bellingham  performs all  the ticketing                                                               
for the North bound passengers.   He noted that [ticketing] costs                                                               
are less than when the agreement started in 1989.                                                                               
                                                                                                                                
Number 0204                                                                                                                     
                                                                                                                                
MR.  DARLING  pointed   out  that  the  ferry   was  in  Seattle,                                                               
Washington, up until 1989 when the  Port of Bellingham made a bid                                                               
and won it.   One of the  reasons the Port of  Bellingham won the                                                               
bid was because  of the shorter sailing times.   Ridership levels                                                               
have ranged from about 25,000 to  42,000 a year; the ridership is                                                               
a  function  of how  many  vessels  sail  a  year.   Mr.  Darling                                                               
informed the  committees that  of all the  runs [AMHS]  does, the                                                               
run  to the  Port  of  Bellingham is  the  one  that generates  a                                                               
positive cash flow into the system.                                                                                             
                                                                                                                                
MR. DARLING showed the committees a  slide of the terminal at the                                                               
Port  of Bellingham,  which  was built  at a  cost  of about  $10                                                               
million.    The terminal  was  recently  remodeled and  improved,                                                               
which  cost about  $800,000.    Connected to  the  terminal is  a                                                               
transportation  center   that  provides  access  to   Amtrak  and                                                               
Greyhound as  well as  city bus  service.   The advantage  of the                                                               
city bus service  is that the terminal is only  about ten minutes                                                               
from  Bellingham International  Airport, which  offers commercial                                                               
carriers such  as Horizon  that would connect  with Alaska.   Mr.                                                               
Darling noted  that the  port operates  other facilities  some of                                                               
which have connections  with Alaska.  He  informed the committees                                                               
that in Squalicum and Blaine there are marinas                                                                                 
, which are  home to a number of Alaska  fishermen.  Furthermore,                                                               
the [port's]  shipping terminal has historically  done barge work                                                               
with Alaska.   [The port]  also owns  a number of  industrial and                                                               
commercial   properties  that   have  connections   with  Alaskan                                                               
markets,  such as  the Bellingham  cold storage.   [The  port] is                                                               
linked to  the community in that  Bellingham is home for  many of                                                               
the ferry  workers.  Moreover,  Western Washington  University is                                                               
located in  the area  and the vast  majority of  its out-of-state                                                               
students are  from Alaska.  Also,  St. Joseph Hospital is  in the                                                               
area.   This hospital is  part of  the "Peace Health  Group" that                                                               
also  operates Ketchikan  General  Hospital,  and therefore  they                                                               
share a number of services such  as oncology.  So, a patient from                                                               
Ketchikan  who  needs oncology  services  would  likely take  the                                                               
ferry to Bellingham in order to access St. Joseph Hospital.                                                                     
                                                                                                                                
Number 0422                                                                                                                     
                                                                                                                                
MR. DARLING  turned to  the national  security measures  taken at                                                               
the  terminal.    He  informed   the  committees  that  passenger                                                               
identification  checks have  increased and  all the  vehicles are                                                               
searched before  entering the ferry.   In response to  Vice Chair                                                               
Ward,   Mr.  Darling   explained  that   the  Bellingham   Police                                                               
Department provides uniform law  enforcement to meet every vessel                                                               
arrival  and   departure.     The  identification   of  embarking                                                               
passengers is checked  carefully.  If someone is  of a suspicious                                                               
nature, that person's bags are  checked.  All vehicles [embarking                                                               
on the  ferry] are being checked.   Mr. Darling pointed  out that                                                               
[the  port  authority] operates  the  airport  and thus  is  very                                                               
familiar  with  the  security  standards.    The  same  types  of                                                               
security   measures  implemented   at  the   airport  are   being                                                               
implemented  at the  ferry terminal,  with the  exception of  the                                                               
baggage checking.   Regionally, the  U.S. Coast Guard  is working                                                               
with regional  marine facilities to develop  standards similar to                                                               
those  at  airports.   Hopefully,  that  process will  result  in                                                               
reasonable   standards  that   everyone   will   use  in   marine                                                               
transportation.                                                                                                                 
                                                                                                                                
MR.  DARLING informed  the committees  that the  port does  joint                                                               
marketing  with Alaska.   Port  [officials] visit  communities in                                                               
Southeast Alaska  every few years  in order to work  on promoting                                                               
the tourism  and visitor  industry.   Mr. Darling  mentioned that                                                               
[Bellingham]  like  every  other   waterfront  community  has  an                                                               
economy that  is in  transition from a  natural resource  base to                                                               
more of  a tourism, visitor economy.   Alaskans are a  large part                                                               
of that  tourism industry.   Mr. Darling  noted that  he reviewed                                                               
the 1988  port proposal  this morning  and [Bellingham]  has done                                                               
all that  it said  it would,  part of which  was to  develop some                                                               
waterfront facilities.   In closing,  Mr. Darling  mentioned that                                                               
the highway  system has  applied for  a scenic  byway connotation                                                               
from  the Federal  Highway Administration  in order  to make  the                                                               
route a federal scenic highway.   If that is approved, the [port]                                                               
expects additional  funds to promote  that.  Mr.  Darling offered                                                               
to take questions.                                                                                                              
                                                                                                                                
Number 0685                                                                                                                     
                                                                                                                                
SENATOR TAYLOR inquired  as to any restrictions  that would apply                                                               
with the scenic highway designation.                                                                                            
                                                                                                                                
MR.  DARLING   related  his  understanding  that   there  are  no                                                               
restrictions.                                                                                                                   
                                                                                                                                
SENATOR TAYLOR  related his belief  that in other  locations with                                                               
established  corridors or  byways, there  were some  restrictions                                                               
due to  the narrow  definition for byway.   He  expressed concern                                                               
that a  designated scenic byway  may come with  restrictions that                                                               
don't allow it to ever be upgraded to a highway.                                                                                
                                                                                                                                
MR. DARLING  said he  has asked  the same  question and  has been                                                               
assured [that  there are no  restrictions].  Mr.  Darling pointed                                                               
out  that   the  Bellingham  community  has   made  a  tremendous                                                               
investment  in  this  facility and  the  community  continues  to                                                               
support  this.   He noted  his appreciation  of the  relationship                                                               
between Bellingham and Alaska.                                                                                                  
                                                                                                                                
Number 0880                                                                                                                     
                                                                                                                                
VICE CHAIR  WARD inquired  as to  the structure  of [the  Port of                                                               
Bellingham] and how it works.                                                                                                   
                                                                                                                                
MR. DARLING  explained that  in 1911  Washington law  created the                                                               
ability   to  form   port   authorities,   which  are   municipal                                                               
corporations.  There  are about 82 such entities in  the State of                                                               
Washington,  which  amounts  to  about  a  quarter  of  the  port                                                               
authorities  in the  United States.   The  port authorities  have                                                               
powers  of  taxation  and  eminent domain.    However,  the  port                                                               
authorities have no regulatory authority  or responsibility.  The                                                               
responsibility  that the  port authorities  have  from the  state                                                               
deals principally  with transportation.   In the 1950s  the power                                                               
of  the  port  authorities  was   expanded  to  include  economic                                                               
development.   Therefore, the  ports in  the State  of Washington                                                               
operate  airports  and  train  stations.   Due  to  the  economic                                                               
development  component, the  Port  of Bellingham  is involved  in                                                               
real estate.   Mr. Darling noted that the port  has three elected                                                               
commissioners  that  serve  on  a board,  and  much  like  school                                                               
districts the board appoints a Chief Executive Officer.                                                                         
                                                                                                                                
VICE CHAIR  WARD inquired as to  how much income is  derived from                                                               
economic development.                                                                                                           
                                                                                                                                
MR. DARLING explained that the  [Port of Bellingham] is organized                                                               
such that a quarter of its  revenue is from property taxes and 75                                                               
percent is  from operating  income.  All  the port's  tax dollars                                                               
are  returned to  environmental cleanup  projects, public  access                                                               
projects,  and economic  development.    Those are  reinvestments                                                               
into the community.   Mr. Darling highlighted  that the operating                                                               
side operates  financially independent of taxes.   Therefore, the                                                               
port operates  under whatever  the gross revenue  is and  that is                                                               
where  the  debt service  is  covered.    He explained  that  the                                                               
operating side  includes marinas,  small boat harbors,  the cargo                                                               
facility,  the   passenger  terminal,  the  port's   real  estate                                                               
portfolio, and  the airport.   The Port  of Bellingham is  one of                                                               
the few  port authorities  that operates  an airport  without tax                                                               
dollars.                                                                                                                        
                                                                                                                                
Number 1076                                                                                                                     
                                                                                                                                
SENATOR ELTON  related his assumption  that the  port authority's                                                               
land  base is  co-located with  the port  facilities and  thus is                                                               
near the harbor and the airport.                                                                                                
                                                                                                                                
MR.  DARLING  specified  that   the  port  authority's  political                                                               
boundaries  are  coterminus with  Whatcom  County,  but the  port                                                               
authority's facilities are generally  located around the [port's]                                                               
transportation facilities.   However,  the port authority  has an                                                               
industrial park at a border town of Canada.                                                                                     
                                                                                                                                
VICE CHAIR  WARD asked  if the  port authority  was given  a land                                                               
grant or the authority to tax land.                                                                                             
                                                                                                                                
MR.  DARLING  answered that  the  port  authority was  given  the                                                               
authority to  tax land.  The  port authority pays a  property tax                                                               
in lieu  of taxes, a leasehold  tax.  The port  authority amounts                                                               
to approximately  3 percent of the  property tax bill.   The bulk                                                               
of  the  port  authority's  income  comes  from  the  authority's                                                               
business.                                                                                                                       
                                                                                                                                
Number 1158                                                                                                                     
                                                                                                                                
SENATOR  WILKEN inquired  as  to Mr.  Darling's  thoughts on  the                                                               
Vancouver port in regard to growth.                                                                                             
                                                                                                                                
MR. DARLING  noted that  although market  forces have  pushed the                                                               
Port of  Bellingham farther away  from marine cargo, it  is still                                                               
familiar  with  it.    He   estimated  that  the  Vancouver  Port                                                               
Authority does about  78 million tons [of cargo a  year].  To put                                                               
that in perspective, all the ports  in the State of Washington do                                                               
about  72 million  tons  of cargo  a year.    The Vancouver  Port                                                               
Authority  competes with  Washington  ports and  some other  West                                                               
Coast ports because [Vancouver] has  a really good East-West rail                                                               
lines whereas Washington only has one [rail line].                                                                              
                                                                                                                                
Number 1234                                                                                                                     
                                                                                                                                
SENATOR WILKEN  inquired as  to changes  in security  since Black                                                               
Tuesday.                                                                                                                        
                                                                                                                                
MR. DARLING said that [the  Bellingham International Airport] did                                                               
what  every  other  airport  did  due  to  the  Federal  Aviation                                                               
Association's (FAA) alert  system.  On the marine  side, the U.S.                                                               
Coast  Guard didn't  have an  alert system.   In  Washington, the                                                               
U.S. Coast Guard  quickly surveyed all the  marine facilities and                                                               
made  specific  recommendations  for  each facility.    The  port                                                               
implemented those recommendations.   Now the U.S.  Coast Guard is                                                               
creating a marine security system  with various levels of [alert]                                                               
that have  specific guidelines.   Federally,  15 cargo  ports are                                                               
being  selected  to  do  extraordinary security.    The  Port  of                                                               
Bellingham doesn't handle enough cargo to be chosen.                                                                            
                                                                                                                                
VICE CHAIR WARD  posed a situation in which  someone goes through                                                               
security at the [Port of Bellingham].   He asked if the fact that                                                               
the individual went through security  carries through to the next                                                               
port.                                                                                                                           
                                                                                                                                
MR. DARLING said it does in  a sense, because once the individual                                                               
is on  the vessel the  individual has went through  some security                                                               
clearance to  go on  the vessel.   He said  he couldn't  speak to                                                               
what happens  if there  are layovers, although  he felt  that the                                                               
marine highway system is checking that.                                                                                         
                                                                                                                                
VICE CHAIR WARD remarked that not  everyone wants to go through a                                                               
complete screening process at every port.                                                                                       
                                                                                                                                
MR. DARLING turned to the  expense of the [screening] technology.                                                               
For  example, the  port's operating  budget has  increased by  50                                                               
percent with this first year of security measures.                                                                              
                                                                                                                                
Number 1399                                                                                                                     
                                                                                                                                
SENATOR  ELTON  related  his  understanding   that  the  Port  of                                                               
Bellingham's  facilities is  making  a payment  to Bellingham  in                                                               
lieu of taxes.                                                                                                                  
                                                                                                                                
MR. DARLING answered yes, and  clarified that the payment is made                                                               
through  the  state to  the  local  municipal jurisdiction.    He                                                               
specified that  there is no  payment on facilities that  the port                                                               
authority operates.   The payment is  made on any income  that is                                                               
derived.  He noted that there is  a debate on this in relation to                                                               
how to treat cargo.                                                                                                             
                                                                                                                                
VICE CHAIR WARD thanked Mr. Darling.   He related his belief that                                                               
the Port of Bellingham has been a good partner.                                                                                 
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business  before the committees, the joint                                                               
meeting  of   the  House   and  Senate   Transportation  Standing                                                               
Committees was adjourned at 1:58 p.m.                                                                                           

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