Legislature(2021 - 2022)BELTZ 105 (TSBldg)

04/27/2021 01:30 PM Senate TRANSPORTATION

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as

Audio Topic
01:33:04 PM Start
01:33:40 PM Overview: Alaska Municipal Ports & Harbors
03:03:07 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overview: Alaska Municipal Ports & Harbors TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
            SENATE TRANSPORTATION STANDING COMMITTEE                                                                          
                         April 27, 2021                                                                                         
                           1:33 p.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Senator Robert Myers, Chair                                                                                                     
Senator Peter Micciche                                                                                                          
Senator Jesse Kiehl                                                                                                             
Senator Mike Shower (via teleconference)                                                                                        
MEMBERS ABSENT                                                                                                                
Senator Click Bishop                                                                                                            
COMMITTEE CALENDAR                                                                                                            
OVERVIEW: ALASKA MUNICIPAL PORTS & HARBORS                                                                                      
     - HEARD                                                                                                                    
PREVIOUS COMMITTEE ACTION                                                                                                     
No previous action to record                                                                                                    
WITNESS REGISTER                                                                                                              
NILS ANDREASSEN, Executive Director                                                                                             
Alaska Municipal League                                                                                                         
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Delivered a PowerPoint on Municipal Ports                                                                 
and Harbors.                                                                                                                    
RACHEL LORD, Executive Secretary                                                                                                
Alaska Association of Harbormasters & Port Administrators                                                                       
Homer, Alaska                                                                                                                   
POSITION STATEMENT: Delivered a PowerPoint on Municipal Ports                                                                 
and Harbors.                                                                                                                    
JOY BAKER, Port Director                                                                                                        
Port of Nome                                                                                                                    
City of Nome                                                                                                                    
Nome, Alaska                                                                                                                    
POSITION  STATEMENT: Delivered  a  PowerPoint  on Alaska's  Deep-                                                             
Draft Arctic port at Nome.                                                                                                      
CARL UCHYTIL, Port Director                                                                                                     
Juneau Docks and Harbors                                                                                                        
City and Borough of Juneau                                                                                                      
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:  Delivered  a  PowerPoint  on  the  American                                                             
Society of Civil Engineers Report on ports and harbors.                                                                         
STEVE RIBUFFO, Port Director                                                                                                    
Port of Alaska                                                                                                                  
Municipality of Anchorage                                                                                                       
Anchorage, Alaska                                                                                                               
POSITION  STATEMENT:  Delivered  a  PowerPoint  on  the  Port  of                                                             
PEGGY MCLAUGHLIN, Port Director                                                                                                 
Port of Dutch Harbor                                                                                                            
City of Unalaska                                                                                                                
Dutch Harbor, Alaska                                                                                                            
POSITION STATEMENT: Delivered  a PowerPoint on the  Port of Dutch                                                             
SHAWN BELL, Harbormaster                                                                                                        
Haines Borough; Member                                                                                                          
Board of Directors                                                                                                              
Alaska Association of Harbormasters & Port Administrators                                                                       
Haines, Alaska                                                                                                                  
POSITION  STATEMENT:  Delivered  a  PowerPoint  on  the  Port  of                                                             
MARK HILSON, Acting Port & Harbors Director                                                                                     
Ketchikan Port and Harbors                                                                                                      
City of Ketchikan                                                                                                               
Ketchikan, Alaska                                                                                                               
POSITION  STATEMENT:  Delivered  a  PowerPoint  on  the  Port  of                                                             
ACTION NARRATIVE                                                                                                              
1:33:04 PM                                                                                                                    
CHAIR  ROBERT MYERS  called  the  Senate Transportation  Standing                                                             
Committee meeting  to order at 1:33  p.m. Present at the  call to                                                               
order were Senators Kiehl, Shower  (via teleconference) and Chair                                                               
Myers. Senator Micciche arrived as the meeting was in progress.                                                                 
^OVERVIEW: ALASKA MUNICIPAL PORTS & HARBORS                                                                                     
           OVERVIEW: ALASKA MUNICIPAL PORTS & HARBORS                                                                       
1:33:40 PM                                                                                                                    
CHAIR MYERS announced the business  before the committee would be                                                               
an  Overview  of  the  Alaska Municipal  Ports  and  Harbors.  He                                                               
welcomed the first of eight presenters, Mr. Nils Andreassen.                                                                    
1:34:11 PM                                                                                                                    
NILS  ANDREASSEN, Executive  Director,  Alaska Municipal  League,                                                               
Juneau,  Alaska,   began  his   presentation  by   reviewing  the                                                               
municipal perspective,  slide 2.  He said municipalities  own and                                                               
maintain  112 of  133  ports and  harbors or  84  percent of  the                                                               
coastal infrastructure that spans a  coast longer than the entire                                                               
US coast.  Municipalities have responsibilities other  than ports                                                               
and  harbors, including  services for  police, hospitals,  water,                                                               
wastewater,  and   schools.  Ports  and  harbors   contribute  to                                                               
economic  activity,   defense,  infrastructure   development  and                                                               
public health and safety.                                                                                                       
1:35:26 PM                                                                                                                    
MR. ANDREASSEN  turned to slide  3, which depicted a  map showing                                                               
the  location of  the 39  Alaska municipal  ports and  harbors in                                                               
1:35:36 PM                                                                                                                    
MR. ANDREASSEN  turned to slide  4, which depicted a  map showing                                                               
the 133  ports and harbors in  Alaska color coded as  a home-rule                                                               
city,  first-class city,  second-class city,  or ones  registered                                                               
under  federal law.  He  stated that  local  governments own  117                                                               
public ports and harbors in  Alaska, including 17 that were never                                                               
owned  by  the  state  and   82  that  were  transferred  by  the                                                               
Department of  Transportation and Public Facilities  (DOTPF). The                                                               
state owns 15 harbors but no ports, he said.                                                                                    
MR. ANDREASSEN  reviewed the maps  on slides 5-6 that  showed the                                                               
communities served by  the Alaska Marine Highway  System. He said                                                               
it  is important  to note  that  besides the  direct benefits  to                                                               
communities, indirect benefits extend to most Alaskans.                                                                         
1:36:45 PM                                                                                                                    
MR.  ANDREASSEN  reviewed slide  7,  Value  of Port  Communities.                                                               
While most  of the communities  are served  by air, the  value of                                                               
port  infrastructure translates  to  the  community being  better                                                               
able to  be a good partner  to the state. These  communities have                                                               
stronger economic activity, contribute  more to public education,                                                               
public  safety,   and  the   state's  retirement   system.  These                                                               
communities take on more debt related to infrastructure.                                                                        
1:37:30 PM                                                                                                                    
MR. ANDREASSEN reviewed  statewide planning on slide  8. He noted                                                               
that AS [44.42.050]  requires the state to develop a  list of all                                                               
projects but  the state  doesn't have a  good plan  for municipal                                                               
coastal infrastructure.  The state  relies on  the U.S.  Corps of                                                               
Engineers  (USACE)  for  planning  for ports  in  its  long-range                                                               
Statewide  Transportation Infrastructure  Plan  (STIP) but  USACE                                                               
has not conducted any studies  since 2010. He suggested the state                                                               
might   consider  that   municipal-owned  infrastructure   has  a                                                               
statewide  impact on  economic  activity,  which intersects  with                                                               
intermodal connections  to state infrastructure.  He acknowledged                                                               
that there are no good ways  to bring these municipal assets into                                                               
statewide planning.                                                                                                             
MR.  ANDREASSEN reviewed  port  and harbor  funding  on slide  9.                                                               
Since there is not a  mechanism for statewide planning, ports and                                                               
harbors  are  left  out  of   the  funding  process.  Within  the                                                               
Statewide   Transportation  Improvement   Program  (STIP),   some                                                               
funding  is  included for  AMHS  terminals  but not  for  broader                                                               
improvements   to  its   ports  and   harbors.  The   legislature                                                               
transferred  many  of  its  port   and  harbor  assets  to  local                                                               
governments through  two programs, the Municipal  Harbor Facility                                                               
Matching  Grant  Program  (MHFGP)   and  the  Transportation  and                                                               
Infrastructure  Debt Service  Reimbursement  (TIDSRA), which  was                                                               
created by  House Bill 528  in 2002. These  are the two  ways the                                                               
state can invest in coastal infrastructure, he said.                                                                            
1:40:10 PM                                                                                                                    
SENATOR MICCICHE joined the meeting.                                                                                            
MR.  ANDREASSEN stated  that in  terms  of past  port and  harbor                                                               
improvements, the  state has not reimbursed  local government for                                                               
those investments  from Aleutians East  and False Pass  harbor to                                                               
Mat-Su port upgrades.                                                                                                           
1:40:55 PM                                                                                                                    
MR. ANDREASSEN reviewed the 2011  Regional Ports and Harbor Study                                                               
on  slide  10. He  stated  that  the  USACE produced  this  study                                                               
consisted of  a thorough compendium  of regional port  and harbor                                                               
needs.  Besides listing  recommendations,  it  also captured  the                                                               
value of the need. However, the  study has not been updated since                                                               
1:41:37 PM                                                                                                                    
MR.  ANDREASSEN turned  to slide  11, Intermodal  Connections and                                                               
Road Connectivity. He stated that  AML tried to replicate some of                                                               
the US  Army Corps  of Engineer's regional  studies. In  terms of                                                               
intermodal connections, the  study did not capture  all the ports                                                               
and harbors,  but it was clear  that ports don't end  at the port                                                               
but connect to communities and statewide infrastructure.                                                                        
MR. ANDREASSEN  reviewed the facility  amenities and  services as                                                               
shown on  the graph  on slide  12. He said  each port  and harbor                                                               
provides  services  based  on  user  needs,  many  of  which  are                                                               
MR. ANDREASSEN  reviewed the capital  project costs on  slide 13.                                                               
He related that  respondents to AML's recent  study reported $1.6                                                               
billion in planned  projects. In the ten years  since the USACE's                                                               
regional study,  port and harbor  needs have increased  from $166                                                               
million to $389 million in unplanned projects, he said.                                                                         
1:43:26 PM                                                                                                                    
MR. ANDREASSEN reviewed the detailed  capital project costs shown                                                               
on slide 14.  He said the pandemic changed the  decisions made at                                                               
the local level, including deferring capital project costs.                                                                     
MR. ANDREASSEN reviewed the facilities  scorecard on slide 15. He                                                               
stated   that   this    infrastructure   needs   investment   and                                                               
MR. ANDREASSEN reviewed the Alaska  infrastructure report card on                                                               
slide 16, which was based on  survey responses and gave Alaska an                                                               
overall score of "D."                                                                                                           
MR.  ANDREASSEN reviewed  the  value  of ports  on  slide 17.  He                                                               
stated  that  investing in  ports  and  harbors also  relates  to                                                               
Alaska's economy  and the  state's overall  transportation system                                                               
since most of Alaska's goods transit these facilities.                                                                          
1:45:39 PM                                                                                                                    
MR. ANDREASSEN  reviewed the final  slide, "What Choices  Will We                                                               
Make?" At one  time, the state decided to  make large investments                                                               
in  infrastructure for  ports and  harbors. He  offered his  view                                                               
that  if  the state  currently  engaged  in  a similar  level  of                                                               
planning, the state could  think differently about infrastructure                                                               
1:47:02 PM                                                                                                                    
SENATOR MICCICHE  asked if  he had  a list  of comments  from the                                                               
facilities scorecard  and infrastructure scorecard. He  noted the                                                               
discrepancy  from a  B minus  to a  D. He  noted that  facilities                                                               
range from  very high-quality ones to  a few moorings at  a river                                                               
MR.  ANDREASSEN commented  that if  the following  presenters did                                                               
not  answer   his  question,  he  would   provide  more  detailed                                                               
information. He  said it might be  as simple as who  responded to                                                               
which survey.                                                                                                                   
1:48:59 PM                                                                                                                    
RACHEL   LORD,  Executive   Secretary,   Alaska  Association   of                                                               
Harbormasters and Port Administrators  (AAHPA), Homer, Alaska, on                                                               
behalf of  AAHPA began a  PowerPoint on ports and  harbors. AAHPA                                                               
was  incorporated in  1999. The  core purpose  is to  promote and                                                               
serve  Alaska's  ports and  harbors.  This  non-profit does  this                                                               
through  advocacy,  acting  as a  communication  and  information                                                               
resource,   and   promoting   sustainable,   safe,   and   secure                                                               
She stated that as shown  on slide 3, AAHPA's membership consists                                                               
of  43  port  and  harbor facilities,  consisting  of  39  Alaska                                                               
Municipal  Ports and  Harbors,  the Alaska  Railroad, two  Alaska                                                               
Native  associations   and  the   Port  of   Seattle  Fisherman's                                                               
1:50:00 PM                                                                                                                    
MS. LORD  reviewed the  distribution of  ports and  facilities as                                                               
shown  on a  Department of  Transportation and  Public Facilities                                                               
(DOTPF) map  [on slide  4]. She  stated there could  be up  to 10                                                               
port and harbor facilities within a single municipality.                                                                        
MS.  LORD referred  to the  maps on  slides 5-6.  She said  AAHPA                                                               
represents approximately  90 percent  of Alaska's  municipal port                                                               
and harbor facilities.  She turned to the map on  slide 6, noting                                                               
that AAHPA  has nearly 60  agency members and partners  that help                                                               
create and sustain the port and harbor facilities.                                                                              
MS.  LORD  reviewed   slide  9.  She  said   the  association  is                                                               
predicated  on the  belief that  communities are  interconnected.                                                               
Alaska's  ports   and  harbors  are  critical   to  nearly  every                                                               
community in the state.                                                                                                         
1:51:32 PM                                                                                                                    
MS.  LORD  provided  a  brief overview  of  AAHPA's  work,  which                                                               
focuses on  network and resource  sharing. This  includes holding                                                               
an   annual   conference,   producing   a   monthly   newsletter,                                                               
maintaining an  email list, and providing  training opportunities                                                               
through national  partnerships. AAHPA  engages in  advocacy work,                                                               
working with  the Alaska Municipal  League, the  legislature, and                                                               
the Alaska  delegation on member-supported issues,  including the                                                               
Harbor Facility Grant Program. AAHPA  also acts as subject-matter                                                               
experts  on Alaska's  ports and  harbors. Finally,  AAHPA gathers                                                               
information  to   track  and  understand   infrastructure  needs,                                                               
economic benefits, and regulatory hurdles for its members.                                                                      
She stated  that significant  infrastructure was  associated with                                                               
docks and harbors, including docks  and floats, ramps, utilities,                                                               
uplands, maintenance, and staffing.                                                                                             
1:52:31 PM                                                                                                                    
MS.  LORD  stated that  the  association  supports the  Municipal                                                               
Harbor  Grant  Program  [slide   11].  This  program  prioritizes                                                               
critical projects using an  established vetting process. Further,                                                               
the program provides for a 50  percent local match, which must be                                                               
in hand before applying for grant funds, she said.                                                                              
She  said  AAPHA provides  the  legislature  with resolutions  in                                                               
support  from  its  members, the  Alaska  Municipal  League,  and                                                               
communities  throughout   Alaska.  AAPHA's  Board   of  Directors                                                               
supports  a  significant  sum  for the  program  to  fund  harbor                                                               
recapitalization efforts for the next decade.                                                                                   
MS. LORD  reviewed Harbor  Grants on  slides 14-15.  This program                                                               
significantly leverages  local dollars to provide  critical needs                                                               
for the state's intermodal transportation system.                                                                               
MS.  LORD  turned  to  slide  16,  which  discussed  the  typical                                                               
terminology for ports  and harbors. In the Lower  48, harbors are                                                               
often  considered marinas  and ports  and  tend to  focus on  the                                                               
movement of  cargo on and  off vessels, whereas in  Alaska, these                                                               
terms are  often used interchangeably  since many of  the state's                                                               
facilities provide port and marina infrastructure and services.                                                                 
1:54:25 PM                                                                                                                    
MS. LORD said the remaining slides  provide some notes from a few                                                               
communities  not  presenting  today.  She stated  that  slide  17                                                               
contained some photographs from  Dillingham. Dillingham acts as a                                                               
hub for the  communities [of Portage Creek,  Ekwok, New Stuyahok,                                                               
Koliganek,  Clarks   Point,  Ekuk,  Manakotak,  Twin   Hills  and                                                               
1:54:42 PM                                                                                                                    
MS.  LORD  related  that  the  Aleutians  East  Borough  sent  in                                                               
schematics  and photographs  of  ongoing projects  in Akutan  and                                                               
Sand Point as shown on slide 18.                                                                                                
MS. LORD  stated that Kake  has actively  worked on its  port and                                                               
harbor infrastructure [slide  19]. She reported that  Kake was in                                                               
the  process  of  applying  for  a  federal  Port  Infrastructure                                                               
Development Grant with the Federal Maritime Administration.                                                                     
1:55:05 PM                                                                                                                    
MS.  LORD turned  to a  photograph  and overview  of Skagway  [on                                                               
slide 20]. Skagway not only serves  the local community but it is                                                               
part of  a larger economic engine  in the region, as  is the case                                                               
for most Alaskan communities.                                                                                                   
MS. LORD turned  to the community notes for Emmonak  on slide 21.                                                               
Emmonak received  a $23 million  Better Utilizing  Investments to                                                               
Leverage Development  (BUILD) grant. She explained  that its port                                                               
facility would serve the Lower Yukon communities.                                                                               
MS. LORD  advanced to slide  22 and touched on  the opportunities                                                               
ahead. She  read the  motto, "Strong  Alaskan communities  make a                                                               
strong Alaska."  She provided her  contact information  [on slide                                                               
1:56:27 PM                                                                                                                    
CARL UCHYTIL, Port  Director, Juneau Docks and  Harbors, City and                                                               
Borough of  Juneau, Juneau,  Alaska, said he  serves as  the past                                                               
president  of  the  AAHPA  and  the  American  Society  of  Civil                                                               
Engineers - Alaska  Section (ASCE). He said he  also authored the                                                               
Ports and Harbors Report Card for the State of Alaska.                                                                          
MR. UCHYTIL reviewed  slide 2, the 2017 Ports  and Harbors Grade:                                                               
D. He  stated that ASCE,  Alaska Section, evaluated  and reviewed                                                               
nine  infrastructure elements.  Overall, the  state received  a C                                                               
minus. However, Alaska's  Ports and Harbors tied  with the Alaska                                                               
Marine  Highway  System and  the  Water  and Wastewater  for  the                                                               
lowest  score.  The  process   was  evaluated  against  criteria,                                                               
including  capacity  and  condition, funding  and  future  needs,                                                               
maintenance  and operations,  public  safety  and resiliency  and                                                               
innovation.  This  evaluation  was   vetted  through  a  national                                                               
process. In  response to Senator Micciche's  earlier question, he                                                               
stated that what dragged down the  state's grade to a "D" was the                                                               
lack of  an Arctic Deep  Water Port  plan, the Port  of Anchorage                                                               
lacked  any  recapitalization   momentum,  the  Southeast  Alaska                                                               
regional  cruise  ship  approach accommodating  the  larger  neo-                                                               
Panamax vessels  was incomplete.  The Small Boat  Harbor matching                                                               
grant was uncertain.                                                                                                            
1:58:24 PM                                                                                                                    
MR. UCHYTIL  reviewed slide  3, ASCE,  Alaska Report  Care, Ports                                                               
and Harbors:                                                                                                                    
    • Alaska has 33,000 miles of coastline, more than the                                                                       
        entire continental US combined.                                                                                         
     • Three of the top 10 fishing ports are in Alaska                                                                          
      • Dutch Harbor (first by weight), Kodiak & Naknek                                                                         
     • Tourism is essential to Alaska economy                                                                                   
        • Nearly 60% of all tourists arrive via cruise ship                                                                     
        • Tourism is largest private employer in Southeast                                                                      
    • The United States is an Arctic Nation but for Alaska                                                                      
1:59:05 PM                                                                                                                    
SENATOR  MICCICHE  offered his  belief  that  the state  invested                                                               
significantly in its  ports and harbors. He  suggested that ports                                                               
and  harbors  could  be  evaluated   per  capita,  split  between                                                               
industrial,  commercial,  and sport  uses.  He  asked whether  he                                                               
genuinely believed that Alaska's  ports and harbors deserved such                                                               
a low score.                                                                                                                    
R. UCHYTIL responded that he  believed the grade was accurate. He                                                               
pointed out that  this grade evaluated ports and  harbors in 2017                                                               
but the  state has  made improvements since  then. The  state was                                                               
struggling  to develop  a deep-water  port at  the time,  and the                                                               
Port  of Anchorage  had issues.  He said  he believes  the Alaska                                                               
Report Card grade for ports and  harbors will improve in the next                                                               
SENATOR   MICCICHE  suggested   that  other   metrics  could   be                                                               
considered, including  population. He said he  would not consider                                                               
Alaska's ports and  harbors to have such a low  score. He pointed                                                               
out that the Arctic Deep Water  port was a new concept. He stated                                                               
that the state  continues to secure the matching  grants. He said                                                               
he does not believe Alaska deserves  this grade. He did not think                                                               
the rating  should be  based on a  wish list but  it should  be a                                                               
rating on  the resources available,  what the state  can provide,                                                               
rather than being based on the future.                                                                                          
2:02:35 PM                                                                                                                    
CHAIR MYERS asked for the average  grade for ports and harbors in                                                               
the Lower 48.                                                                                                                   
MR. UCHYTIL  answered that ASCE  just released its  latest report                                                               
card. The  overall score  for the  U.S. was a  "B" for  ports and                                                               
MR.  UCHYTL turned  to slide  4 and  discussed ports  and harbors                                                               
factoids. He  stated that  Alaska has about  50 small  boat ports                                                               
and  harbors,  including  lodge  ramps  and  remote  harbors.  In                                                               
comparison,  the  Lower  48  has more  than  10,000  harbors  and                                                               
MR.  UCHYTIL discussed  the proposed  Arctic deep  draft port  in                                                               
Nome on slide 5. Joy Baker  will speak to this more specifically.                                                               
He emphasized  the importance  of a deep  draft port  by pointing                                                               
out that  the distance between Nome  and Los Angeles is  the same                                                               
distance between Nome and Tromso, Norway.                                                                                       
2:04:38 PM                                                                                                                    
MR. UCHYTIL reviewed the issue  created by the Panamax versus the                                                               
Neo-Panamax ships.  He stated that there  is a need to  invest in                                                               
Southeast  Alaska cruise  ship docks  to  accommodate the  larger                                                               
vessels. The Panama Canal expansion  in 2016 has been significant                                                               
for cruise lines due to the  economies of scale to operate cruise                                                               
ships. Prior to 2016, Alaska did  not have full capacity for Neo-                                                               
Panamax  vessels.   The  two  docks   shown  on  slide   6  could                                                               
accommodate a 965-foot vessel and  an 800-foot vessel. Currently,                                                               
the Port of Juneau can handle the Neo-Panamax cruise ships.                                                                     
2:05:28 PM                                                                                                                    
MR.  UCHYTIL turned  to  slide 7.  He stated  that  tourism is  a                                                               
regional market.  Not only  did Juneau expand  its docks  but new                                                               
private docks were built in Hoonah, Ward Cove and Ketchikan.                                                                    
2:06:08 PM                                                                                                                    
MR.  UCHYTIL discussed  the Alaska  DOTPF  Harbor Facility  Grant                                                               
Program on slide 8. He said  the program was established in 2006.                                                               
It has  only been  fully funded twice  since its  inception. Port                                                               
directors and harbormasters need certainty in funding.                                                                          
2:06:32 PM                                                                                                                    
SENATOR MICCICHE asked whether a  local match was available so if                                                               
the Harbor Facility  Grant Program were fully  funded, work could                                                               
MR. UCHYTIL answered that the  program requires municipalities to                                                               
provide  proof of  local  match before  applying  for small  boat                                                               
harbor project grants.                                                                                                          
SENATOR MICCICHE  clarified his question was  whether communities                                                               
have shovel-ready projects if the program were fully funded.                                                                    
MR. UCHYTIL answered yes. For  example, if grant funding were not                                                               
available in  Juneau, the City  and Borough of Juneau  would move                                                               
forward  on  construction using  50  percent  of its  50  percent                                                               
2:08:18 PM                                                                                                                    
MR. UCHYTIL referred  to Alaska Port & Harbors  Grant Funding Win                                                               
on slide 9, which listed projects:                                                                                              
     Emmonak Dock (2018) $23.1M (BUILD)                                                                                         
     Port of Alaska (2019) $25M (BUILD)                                                                                         
     Port of Alaska (2020) $20M (PIDP)                                                                                          
     Port of Seward (2020) $20M (PIDP)                                                                                          
He said the availability of grant funding has improved.                                                                         
MR.  UCHYTIL reviewed  the American  Society  of Civil  Engineers                                                               
(ASCE) 2021 Ports & Harbors Grade:  TBD, noting that the trend is                                                               
moving in the right direction. Slide 10 read:                                                                                   
      • Congress authorization to designate Nome as Deep                                                                        
        Draft Arctic Port was more than a decade in the                                                                         
       • Port of Alaska - Port Modernization Project is                                                                         
     • Private Investment for Cruise Ship Docks has built                                                                       
        capacity for tourism economy                                                                                            
       • Small Boat Harbor matching ADOT Grant remains                                                                          
        unfunded and uncertain                                                                                                  
2:10:04 PM                                                                                                                    
STEVE  RIBUFFO, Port  Director, Port  of Alaska,  Municipality of                                                               
Anchorage, Anchorage, Alaska,  turned to slide 2.  He stated that                                                               
90 percent  of the freight  that comes  to Alaska comes  by water                                                               
and half  arrives in Anchorage.  About 50 percent of  the freight                                                               
remains in Anchorage and the  rest is distributed to destinations                                                               
via the  road and rail system.  He reported that the  port stayed                                                               
open during  the pandemic. In fact,  the port had a  record year,                                                               
moving 4.7  million tons  of fuel  and cargo  in 2020.  He stated                                                               
that  this increase  was  largely  due to  jet  fuel and  refined                                                               
petroleum products.  The port also  experienced a record  year of                                                               
$14.3 billion  in revenue  in 2020 compared  to $12.7  billion in                                                               
2:11:39 PM                                                                                                                    
MR. RIBUFFO referred to slide 3,  which illustrated the port as a                                                               
statewide  cargo transport  hub.  The Anchorage  port provides  a                                                               
connection point to the Glenn  Highway and the Seward Highway. It                                                               
lies  three-fourths of  a mile  from  the main  railyard for  the                                                               
Alaska   Railroad   and  five   miles   from   the  Ted   Stevens                                                               
International  Airport  (AIA).  He  stated that  the  North  Star                                                               
Stevedore Terminal and  the Alaska Marine Lines  Terminal is less                                                               
than four minutes by truck.  He related that a significant amount                                                               
of  the  freight  offloaded  from cargo  ships  is  destined  for                                                               
Western Alaska via  barges. The value added as a  port relates to                                                               
the relative closeness to the  transportation system to get goods                                                               
to consumers,  he said. The  Alaska Port at Anchorage  provides a                                                               
nexus  between Joint  Base  Elmendorf-Richardson  (JBER) and  the                                                               
Marathon Nikiski Refinery.                                                                                                      
2:12:53 PM                                                                                                                    
MR.  RIBUFFO discussed  the port's  three functions  on slide  4:                                                               
commerce, national defense and  disaster resiliency and response.                                                               
The port  is one of  17 commercial strategic  seaports, providing                                                               
support to  the U.S. Army  in Alaska. He  said 20 percent  of the                                                               
cargo supports  military missions  or is  sold at  the exchanges,                                                               
commissaries, and  gas stations. He highlighted  that every state                                                               
or federal  disaster response plan  relies on the port.  The port                                                               
is actively involved in disaster planning regularly, he said.                                                                   
2:14:22 PM                                                                                                                    
MR.  RIBUFFO reviewed  the Port  of Alaska  Modernization Program                                                               
(PAMP) points shown on slide 5:                                                                                                 
       • Replace aging docks and related infrastructure                                                                         
        • Improve operational safety and efficiency                                                                             
        • Accommodate modern shipping operations                                                                                
        • Improve resiliency  to survive extreme seismic                                                                        
          events and Cook Inlet's harsh marine environment                                                                      
MR. RIBUFFO  stated that the  Port of  Alaska had just  turned 60                                                               
years  old.  The  port  suffers   from  a  significant  corrosion                                                               
problem.  The  best  solution  is   to  demolish  and  rebuild  a                                                               
resilient facility completely.                                                                                                  
2:15:12 PM                                                                                                                    
MR.  RIBUFFO  stated  that  the  project's  first  phase  is  the                                                               
Petroleum  and Cement  terminal. Landside  construction began  in                                                               
2017.  In  2020,  underwater  construction  of  the  trestle  and                                                               
platform occurred, as shown on slides 6-7.                                                                                      
MR.  RIBUFFO  turned to  slide  8,  a  video clip  depicting  the                                                               
construction  project. He  identified the  contractor as  Pacific                                                               
Pile  and Marine.  He described  the work  necessary to  turn the                                                               
platform  into  a  working  dock,  including  installing  mooring                                                               
dolphins   and   catwalks,   connecting   hoses   to   a   cement                                                               
infrastructure  for  offloading cement  that  will  tie into  the                                                               
existing petroleum  plumbing through  the valve  yard to  the 3.1                                                               
million barrels  of petroleum storage  at the port.  He estimated                                                               
that  the petroleum  and cement  terminal  construction would  be                                                               
finished by  late November  2021. He  anticipated that  a ribbon-                                                               
cutting ceremony would be held in December 2021.                                                                                
2:16:55 PM                                                                                                                    
MR. RIBUFFO  described the North Extension  Stabilization Project                                                               
shown on slide  10. He stated that the  Municipality of Anchorage                                                               
submitted a  request to  CAPSIS for $136  million, of  which $121                                                               
million  would be  for Phase  1 of  the project  and $15  million                                                               
would  cover onshore  facilities replacement.  This was  the only                                                               
project  submitted.  He  directed attention  to  the  foreground,                                                               
which showed  the failed  expansion project.  Unfortunately, that                                                               
project was  declared unstable and  must be removed. The  port is                                                               
currently in litigation with  the Federal Maritime Administration                                                               
(FMA) but  it hopes  to prevail  sometime in  the early  fall. He                                                               
characterized the project as "shovel ready."                                                                                    
2:18:05 PM                                                                                                                    
MR. RIBUFFO turned to slide 10.  He discussed the $121 million in                                                               
2022 construction, including that the  first portion of the north                                                               
end  must  be  removed  before  construction.  Once  construction                                                               
begins, the  port will  need room to  maneuver vessels  safely to                                                               
the main dock  since it will be  operational during construction.                                                               
Otherwise, it would be difficult  for Matson and TOTE Maritime to                                                               
maneuver its sizeable vessels. In  fact, it would be dangerous to                                                               
do so, especially  during winter storms and winds.  He hoped that                                                               
funding for the dock removal  would come from the settlement with                                                               
FMA; if not,  the port will need to borrow  financing because the                                                               
project must be built.                                                                                                          
2:19:33 PM                                                                                                                    
MS. LORD  noted that Brian  Hawkins, the Homer  Harbormaster, may                                                               
not testify today.                                                                                                              
2:20:00 PM                                                                                                                    
JOY  BAKER, Port  Director, Port  of  Nome, City  of Nome,  Nome,                                                               
Alaska,  reviewed a  graphic on  slide  2 showing  the extent  of                                                               
vessel movement in the Bering  Strait during the ice-free season,                                                               
despite the remoteness of the area.  The table on slide 12 showed                                                               
the number  of northbound and southbound  vessels from 2009-2020.                                                               
She pointed  out the increase  in traffic was 110  percent during                                                               
this 12-year period.                                                                                                            
2:21:36 PM                                                                                                                    
MS.  BAKER stated  that the  Port of  Nome serves  as a  critical                                                               
refuel and resupply  point for vessels traveling to  and from the                                                               
Northwest  Passage.  This has  placed  additional  demand on  the                                                               
three ports shown on slide 3, Ship Resupply.                                                                                    
2:22:14 PM                                                                                                                    
MS. BAKER discussed  commodity movement on slide  4. She reported                                                               
that cargo  and fuel  are their  primary commodities.  Still, the                                                               
port continues to  see an overwhelming growth  in exporting rock,                                                               
gravel, and  sand materials for construction  projects throughout                                                               
the region. She  directed attention to the green bars  on the bar                                                               
graph, which show  gravel tonnage. She said  she anticipated that                                                               
in 2021,  the port would export  more material than in  2020. The                                                               
area  experienced  low construction  in  the  region for  several                                                               
years, but ample local construction projects are happening.                                                                     
2:23:35 PM                                                                                                                    
MS.  BAKER  turned  to  recent  port  improvements  on  slide  5.                                                               
Although she won't cover the  individual projects listed, members                                                               
may  wish  to  review  them.  She stated  that  this  shows  port                                                               
improvement  projects  in active  and  planning  status. Just  as                                                               
other  port   directors  indicated   today,  Nome   has  numerous                                                               
infrastructure  gaps. As  the vessel  traffic continues  to grow,                                                               
the Port  of Nome lags.  The city has  worked to get  projects to                                                               
shovel-ready status, then apply for  federal grants. She said the                                                               
city understands it must provide match funds for projects.                                                                      
2:24:47 PM                                                                                                                    
MS. BAKER turned to slide 6,  which shows the dredge area for the                                                               
U.S.  Army Corps  of Engineers  (USACE).  This feasibility  study                                                               
will  expand and  deepen the  federal dredge  limits to  mitigate                                                               
significant vessel  congestion in  Nome's small boat  harbor. She                                                               
said smaller  vessels would  moor upriver  to allow  cargo gravel                                                               
and fuel vessels  to operate safely in the harbor  and move their                                                               
products more efficiently.                                                                                                      
MS. BAKER pointed  out the Snake River  Development funding phase                                                               
as a smaller side project shown  on slide 7. She stated that this                                                               
schematic shows the  conceptual layout of the  moorage system and                                                               
shoreside development,  which would  separate the  smaller vessel                                                               
traffic from the larger ones.                                                                                                   
MS. BAKER advanced  to slide 8, Port Waste  Reception Facility at                                                               
Nome.  She said  this would  be  the first  port waste  reception                                                               
facility  in the  Arctic. She  related  that significant  concern                                                               
exists about  oil spills, discharges,  and bilge water.  The City                                                               
of Nome  hopes to develop  the project in  the next two  or three                                                               
2:27:01 PM                                                                                                                    
MS. BAKER  reviewed the port  expansion design phase on  slide 9,                                                               
which she said was also known  as the Arctic Deep-Draft Port. She                                                               
stated  that  the  116th  Congress   authorized  the  design  and                                                               
construction last  December. The City  of Nome is in  the process                                                               
of  signing  a  design  agreement  with  the  US  Army  Corps  of                                                               
Engineers (USACE), so  the design would likely begin  in a couple                                                               
of  weeks. It  appears that  the  USACE is  considering a  phased                                                               
approach to extend the existing  causeway on the west side first.                                                               
Next, dredging  would occur  in phase  2, followed  by relocating                                                               
the east breakwater as a causeway  in phase 3. She said she hopes                                                               
the concept  design will  be available  by the  end of  the year.                                                               
This project  would provide five  additional docks to add  to the                                                               
three current docks at the Port of Nome.                                                                                        
2:28:31 PM                                                                                                                    
MS.  BAKER emphasized  the targeted  benefits  of the  deep-draft                                                               
port at Nome  on slide 10, including  enhancing national security                                                               
and  life safety,  environmental  safety,  economic and  cultural                                                               
sustainability,  research, and  tourism. The  photo insert  shows                                                               
tracking  for the  LNG tankers  that came  through unescorted  in                                                               
January  2021. It  could have  turned out  very differently,  she                                                               
said. The  Port of  Nome needs to  be prepared, so  it   is doing                                                               
what it can to develop and grow its infrastructure.                                                                             
MS. BAKER acknowledged  that the ports and harbors  in Alaska all                                                               
have significant needs. She said  everyone needs to do their part                                                               
to help raise the ASCE Report Card score.                                                                                       
2:30:15 PM                                                                                                                    
MS. BAKER  turned to slide  11, which depicted a  cartoon drawing                                                               
showing the proposed expansion.                                                                                                 
2:30:33 PM                                                                                                                    
At ease                                                                                                                         
2:31:30 PM                                                                                                                    
CHAIR MYERS reconvened the meeting.                                                                                             
2:31:42 PM                                                                                                                    
PEGGY MCLAUGHLIN,  Port Director, Port  of Dutch Harbor,  City of                                                               
Unalaska, Dutch  Harbor, Alaska, stated  that she also  serves as                                                               
the  Vice President  of the  Alaska Association  of Harbormasters                                                               
and  Port  Administrators  (AAHPA).  She began  a  PowerPoint  to                                                               
identify port  projects, emphasize  the need  for infrastructure,                                                               
and   demonstrate   how   interconnectivity   bolsters   commerce                                                               
throughout Alaska. Slide 1 showed  a photo of the Unalaska Marine                                                               
Center. She  highlighted the Port  of Dutch Harbor's  three major                                                               
projects  for   rehabilitation:  Unalaska  Marine   Center's  $40                                                               
million  expansion   program,  dredging  the   Iliuliuk  entrance                                                               
channel and upgrades to the Robert Storrs Harbor.                                                                               
MS. MCLAUGHLIN  described the importance of  Dutch Harbor. First,                                                               
the  international  port  of  Dutch  Harbor  is  the  westernmost                                                               
container terminal in  the U.S. Second, Dutch Harbor  is the only                                                               
international container terminal in  the state. Two international                                                               
ships sail to Dutch Harbor on  a weekly basis and a third company                                                               
ships international containers on  a seasonal basis. Third, Dutch                                                               
Harbor is  a year-round,  ice-free port.  It is  the southernmost                                                               
port in the  Arctic, sitting on the great  circle route. Finally,                                                               
Dutch Harbor is the largest fishing port in the nation.                                                                         
2:33:52 PM                                                                                                                    
MS. MCLAUGHLIN  turned to  an illustration  of the  Robert Storrs                                                               
Harbor  on  slide 2.  Since  USACE  is  picking up  the  Iliuliuk                                                               
Entrance Channel dredging project, the  Robert Storrs Harbor is a                                                               
priority for the community. She  said the harbor is a state-owned                                                               
facility and was transferred to the  city for $1 and towed to its                                                               
current  location. However,  the 40-year-old  harbor has  failing                                                               
electrical and water  systems so it costs more to  repair than to                                                               
replace.  This  project  would double  the  harbor  capacity  and                                                               
accommodate the vessels on the  waiting list. It would strengthen                                                               
the system  to handle  winds, replace  the electrical  system and                                                               
provide  year-round water,  fire suppression  and access  for the                                                               
Americans  with Disabilities  Act (ADA).  This harbor  serves the                                                               
60-foot and  under class of  vessels and  is the home  harbor for                                                               
the state's fishery vessels.                                                                                                    
2:35:51 PM                                                                                                                    
MS. MCLAUGHLIN reviewed the Unalaska  and Dutch Harbor statistics                                                               
on slide 3, which compared the  Dutch Harbor port to the Unalaska                                                               
Marine Center.  She reported that nearly  60,000 containers cross                                                               
the Unalaska  Marine Center municipally owned  port facility. She                                                               
highlighted  Dutch Harbor  transfers over  2.6 billion  pounds of                                                               
cargo  annually,  over  60  million   gallons  of  fuel  and  the                                                               
community receives 120,000 to 125,000 40-foot containers.                                                                       
2:38:42 PM                                                                                                                    
MS.  MCLAUGHLIN turned  to slide  4, which  showed the  Aleutians                                                               
Domestic Shipping Routes. She emphasized  that nothing happens in                                                               
a  vacuum  in the  shipping  world.  This slide  illustrates  the                                                               
shipping routes  from Tacoma to  Anchorage and  Kodiak. Anchorage                                                               
moves  cargo from  its  port  to the  rail  and Railbelt  system.                                                               
Kodiak  serves  its  outlying  communities  with  barge  service.                                                               
Unalaska serves Akutan,  St. Paul, Sand Point and  King Cove. She                                                               
characterized this as being a hub  system so if something were to                                                               
happen, it would  impact everyone in the system.  For example, if                                                               
processors can't obtain supplies, they can't process their fish.                                                                
MS.  MCLAUGHLIN reviewed  the Fuel  Routes on  slide 5.  The blue                                                               
line represents the  Great Circle Route, which  provides the most                                                               
direct route from  the Western US to Asia.  The fuel distribution                                                               
and barges  follow that  line, she said.  While not  every vessel                                                               
stops  in Dutch  Harbor, every  vessel passes  through it.  Dutch                                                               
Harbor  provides a  fuel storage  hub for  places north  that are                                                               
iced over  and supplies fuel to  some of the local  island areas.                                                               
She said Dutch  Harbor currently transfers fuel  to vessels while                                                               
they are on the water.                                                                                                          
MS.  MCLAUGHLIN  said the  US  Army  Corps of  Engineers  (USACE)                                                               
performed  a   cost-benefit  analysis   and  determined   it  was                                                               
economically  beneficial to  dredge  to 60-foot  depth to  better                                                               
serve  fuel  tankers.  In addition,  the  dredging  is  important                                                               
because  container ships  are not  getting smaller.  She reported                                                               
that the D7  class vessels that serve Anchorage  and Dutch Harbor                                                               
are almost 35 years old.                                                                                                        
2:41:16 PM                                                                                                                    
MS.  MCLAUGHLIN highlighted  the  Great Circle  Route Traffic  on                                                               
slide 6,  which captured  a one-day  snapshot of  vessel traffic.                                                               
She stated that the green  triangles on the slide represented the                                                               
bigger  ships, such  as  tankers and  container  ships. She  said                                                               
about 4,500  of these  larger vessels  pass through  Dutch Harbor                                                               
each  year. She  directed attention  to numerous  triangles along                                                               
the  coastline, busy  with vessel  traffic.  Thus, coastal  ports                                                               
need  infrastructure to  service fuel  and cargo.  She reiterated                                                               
that what happens in one port  affects the other ports because of                                                               
their interconnectivity.                                                                                                        
 MS. MCLAUGHLIN discussed slide 7, "Three-month Vessel Traffic to                                                               
 Dutch Harbor." She explained that this  slide depicts lines that                                                               
 provide a visual sense of the Dutch Harbor's vessel traffic that                                                               
 serves Dutch  Harbor,  King Cove,  False  Pass,  Sand Point  and                                                               
 Kodiak ports. First,  these vessels purchase supplies  and fuel,                                                               
 deliver fish and cargo,  and need moorage.  Finally, their crews                                                               
 fly out on planes, which means more  fuel sales and transfers in                                                               
 the communities.  The  City  of  Unalaska  and AAHPA  strive  to                                                               
 promote maritime  aspects because  it supports  other ports  and                                                               
 harbors,  providing  jobs,  revenue,   and  commerce  throughout                                                               
2:44:24 PM                                                                                                                    
MS.   MCLAUGHLIN  turned   to  last   slide,  Aleutians:   Marine                                                               
Transportation  Capital Projects,  which listed  the funding  for                                                               
the three Dutch Harbor/Unalaska projects:                                                                                       
   • USACE: ILIULIUK ENTRANCE CHANNEL DREDGING $40 million                                                                      
     • Robert Storrs Harbor $9 million                                                                                          
     • Unalaska Cruise ship terminal $13 million.                                                                               
2:45:12 PM                                                                                                                    
CHAIR  MYERS advised  members that  this ended  the formal  slide                                                               
presentations but two additional presenters were online.                                                                        
2:45:46 PM                                                                                                                    
SHAWN  BELL,  Harbormaster,  Haines  Borough;  Member,  Board  of                                                               
Directors,   Alaska   Association   of   Harbormasters   &   Port                                                               
Administrators  (AAHPA),  Haines,  Alaska,  stated  he  has  fond                                                               
memories of his  family's setnet site at Clam Gulch  on the Kenai                                                               
Peninsula and  of commercial  fishing in  Cook Inlet  and Bristol                                                               
Bay.  He said  Alaska's  waterfront  infrastructure is  essential                                                               
because  fishing  fleets  depend   on  them  to  safeguard  their                                                               
vessels, businesses rely on ports  to deliver necessary goods and                                                               
community members enjoy these facilities  for the quality of life                                                               
they bring.  In touring  some of Alaska's  ports and  harbors, he                                                               
has witnessed  the success stories  of well-planned  and executed                                                               
projects  as well  as the  struggles of  underfunded and  failing                                                               
facilities due to impacts from  the harsh Alaska environment over                                                               
time. Although this PowerPoint will  report on the conditions and                                                               
needs of Haines's ports and  harbors, these issues are not unique                                                               
to Haines but  are shared by most small  communities in Southeast                                                               
2:47:53 PM                                                                                                                    
MR.  BELL Haines  presented  a PowerPoint  update  of the  Haines                                                               
ports and harbors.  He explained that Haines  inherited its ports                                                               
and harbor facilities from the state and federal government.                                                                    
MR. BELL reviewed the Lutak Dock  Cargo Port history on slides 1-                                                               
2.  The Haines  Lutak Dock  was built  in 1953  by the  U.S. Army                                                               
Corps of Engineers  (USACE). Ownership is split  between AMHS and                                                               
the  Haines  Borough,  he  said.   After  the  state  transferred                                                               
ownership of  the dock to  the Haines Borough, the  community and                                                               
the state  benefited from  imports and  exports of  fuel, timber,                                                               
and  cargo. Since  Haines is  connected to  the road  system, the                                                               
Haines  harbor  and  port  facilities  also  benefit  many  other                                                               
communities, he said.                                                                                                           
MR. BELL turned  to slide 3. The photographs  show the structural                                                               
condition of the Lutak Dock, which  is failing due to its age and                                                               
the engineering practices used during  construction. He cited the                                                               
structural  assessment by  PND Engineers,  Inc., which  indicated                                                               
that the  structure has  reached the end  of its  60-year service                                                               
life  and further  utilization is  effectively on  borrowed time.                                                               
This  assessment was  given seven  years ago,  he said.  Alaska's                                                               
cargo  ports are  important  to Alaska  to  encourage growth  and                                                               
foster  private industry  investment. He  expressed concern  that                                                               
private industry  will not invest  in the Haines community  if it                                                               
cannot rely on safe and functional port and harbor facilities.                                                                  
MR. BELL  reviewed the Haines  Small Boat  Harbor on slide  4. He                                                               
stated that  the harbors in  Haines were also transferred  to the                                                               
Haines  Borough from  the  state. In  2008,  using the  Municipal                                                               
Harbor  Grant Program  funding, the  Haines Borough  replaced the                                                               
Haines  small   boat  harbor's  concrete  floats.   With  further                                                               
assistance from  the state,  Haines has  made progress  towards a                                                               
much  overdue harbor  expansion.  The project  planning began  30                                                               
years ago, he said.                                                                                                             
2:50:23 PM                                                                                                                    
MR. BELL  reviewed photographs  on slide  5 that  illustrated the                                                               
2017  construction project  to extend  the harbor  breakwater and                                                               
dredge out  a new  basin and provide  for additional  upland. The                                                               
picture shows an open basin since  the work is not yet completed.                                                               
He  turned to  slide  6,  to a  cartoon  image  showing what  the                                                               
finished  project  would  look   like.  The  Haines  Borough  has                                                               
stretched its  funding to  the limit  for this  project. However,                                                               
Haines  still lacks  funding  for the  drive-down  work float  to                                                               
support  the fishing  fleet and  the new  moorage floats  for the                                                               
expanded harbor basin. Although this  project will be an economic                                                               
driver for Haines, its benefits will ripple through the state.                                                                  
MR. BELL concluded the presentation  by stating that he described                                                               
two facilities  critical to Haines  and ultimately to  the state.                                                               
However,  many   small  coastal  communities   received  critical                                                               
waterfront  infrastructure  that  is old  and  inadequate.  These                                                               
communities have partnered with  the state and federal government                                                               
and  local   industry  to  keep  them   functional.  These  small                                                               
communities  cannot support  the multimillion-dollar  projects to                                                               
remedy the infrastructure.  Since Alaska is a  maritime state, it                                                               
must  invest in  coastal  infrastructure to  thrive  as a  state.                                                               
These  projects will  not only  benefit local  residents but  the                                                               
entire state, he said.                                                                                                          
2:52:53 PM                                                                                                                    
MARK HILSON, Acting  Port & Harbors Director,  Ketchikan Port and                                                               
Harbor,  Ketchikan, Alaska,  began  the  presentation by  stating                                                               
that  rather  than  focusing on  Ketchikan's  infrastructure,  he                                                               
would  address   the  financial  implications  to   the  Port  of                                                               
Ketchikan due to the pandemic.                                                                                                  
2:53:54 PM                                                                                                                    
MR. HILSON stated  that slide 1 showed the four  berth docks that                                                               
parallel the downtown  core. He noted that the  Port of Ketchikan                                                               
is a deep-water port capable  of accommodating 1.2 million cruise                                                               
ship passengers  each year.  He expressed  concern that  the port                                                               
has a limited ability to  accept Panamax vessels but the industry                                                               
is transitioning  to these larger  vessels. Alaska has  a network                                                               
of ports that  work in concert to provide  attractive cruise ship                                                               
itineraries.  Due  to Ketchikan's  location,  it  is usually  the                                                               
first  or  last   stop  for  cruise  ships.   Although  the  port                                                               
infrastructure is valued in the  hundreds of millions of dollars,                                                               
it was unused in 2020 and may not be used during 2021.                                                                          
MR. HILSON  turned to Ketchikan  Harbors shown in  photographs on                                                               
slide  2. Four  of its  five  harbors were  transferred from  the                                                               
state  to the  City of  Ketchikan, he  said. The  city float  was                                                               
constructed  by  the  city  but  the rest  of  the  harbors  were                                                               
constructed by  the state  or territory  prior to  statehood. All                                                               
its harbors, except for Bar  Harbor were rebuilt. Since Ketchikan                                                               
is on  an island, these harbors  provide necessary infrastructure                                                               
to accommodate Alaskan residents  with their water transportation                                                               
needs. Further, the harbor offers mooring for yachts, he said.                                                                  
2:56:11 PM                                                                                                                    
MR. HILSON  reviewed the  "Current Situation"  on slide  3, which                                                               
   • Port Fund                                                                                                                  
     • Began 2020 with a $10.8M reserve but now  in danger                                                                      
        of insolvency due to loss of 2020 and 2021 Cruise                                                                       
        Seasons ($21.3M)                                                                                                        
     • Absent an infusion of funds from other sources, the                                                                      
        City will have to transfer other City controlled                                                                        
        funds in order to keep the Port Fund solvent.                                                                           
  • Harbor Fund                                                                                                                 
     • The Harbor Fund has suffered losses due to a lack of                                                                     
        seasonal moorage revenue due to the effects of the                                                                      
2:56:13 PM                                                                                                                    
MR. HILSON  said the  main economic driver  for the  community is                                                               
sidelined. Thus,  Ketchikan has been  disproportionately affected                                                               
by  the  pandemic.  He  reported  that  the  Port  Fund  will  be                                                               
insolvent by the end of 2021.  He stated that the Port Fund would                                                               
need an  infusion of $3.2  million to remain solvent.  The Harbor                                                               
Fund  finances are  closely tied  to  the port  since they  share                                                               
MR. HILSON,  in response to  Senator Micciche's  earlier question                                                               
to Mr. Uchytil, stated that the  City of Ketchikan was not in any                                                               
position to  match a 50-percent Municipal  Harbor Facility Grant.                                                               
He suggested that it was not likely  to do so in the near future.                                                               
He  displayed a  bar  chart  on slide  4  showing  the Port  Fund                                                               
revenues from  2016 to  2021. Port revenues  were $10  million in                                                               
2019 but dropped to virtually nothing  in 2020 and will likely be                                                               
nothing in 2021.                                                                                                                
2:57:40 PM                                                                                                                    
MR.  HILSON  turned  to  slide  5, "How  to  Finance  Needs?"  He                                                               
paraphrased slide 5, which read:                                                                                                
   • Given the existing fiscal constraints on the Port                                                                          
     Enterprise  Fund,  loss  of passengers  to  Ward  Cove,                                                                    
     disruption of the local economy  and the City's current                                                                    
     debt load, conventional  financing to undertake further                                                                    
     improvements to the  Port may be unlikely  for the near                                                                    
   • Even if conventional financing were available, voter                                                                       
     approval of additional debt is highly questionable                                                                         
2:57:43 PM                                                                                                                    
MR. HILSON  stated that the  City of Ketchikan  used conventional                                                               
financing  to redo  one  berth.  However, conventional  financing                                                               
will not be  an option. He offered his belief  that the Ward Cove                                                               
development  was good  overall  but it  would  likely cause  some                                                               
headwinds for Ketchikan.                                                                                                        
MR. HILSON  paraphrased the "Immediate  Needs" on slide  6, which                                                               
   • Port Debt Service, Lease Payments, and Operations.                                                                         
        • Port Projects                                                                                                         
        • Berth III Mooring Dolphins and Bollards ($5M)                                                                         
          (Shovel Ready) Berth I and II Corrosion                                                                               
          Maintenance and Cathodic Protection ($15M)                                                                            
   • Harbor Projects                                                                                                            
        • Bar Harbor Concrete Float Replacements ($7.5M)                                                                        
MR.  HILSON said  with little  incoming revenue  it is  virtually                                                               
impossible for  the City of  Ketchikan to continue with  its port                                                               
and  harbor projects,  several  of which  are  shovel ready.  For                                                               
example, the  City of Ketchikan would  like to expand one  of its                                                               
existing berths  to accommodate the Neo-Panamax  vessels that the                                                               
industry is rapidly moving towards.                                                                                             
2:59:24 PM                                                                                                                    
MR.  HILSON reviewed  the bullet  points on  slide 3  "More Rough                                                               
Seas Ahead" that read as follows:                                                                                               
   • With no cruise ships in 2020 and 2021, Ketchikan                                                                           
     anticipates losing approximately $33M in revenue overall.                                                                  
   • Fixed costs (P&H operations, Berth III Debt Service,                                                                       
     Berth IV Lease Obligations) will continue to drain the                                                                     
     Port Fund.                                                                                                                 
   • The longer maintenance is deferred, the more expensive                                                                     
     it will become.                                                                                                            
   • Port Fund revenue recovery will be slower since the                                                                        
     City is now in a competitive environment with the new                                                                      
     berths at Ward Cove.  The McDowell Group estimates that                                                                    
     Ward Cove will reduce City revenues by 20%.                                                                                
   • Lingering Pandemic effects for 2022 cruise season.                                                                         
3:00:13 PM                                                                                                                    
MR.  HILSON concluded  the  presentation with  a  quote by  Mayor                                                               
Robert Sivertsen  to Governor Dunleavy  on March 12,  2021, shown                                                               
on slide 8, which read as follows:                                                                                              
     The City  of Ketchikan's financial future  is uncertain                                                                    
     and we look  to the State of Alaska as  our last option                                                                    
     to stabilize  what has become a  financial tailspin for                                                                    
     us  and all  tourism  communities that  rely on  cruise                                                                    
     passenger visitation.  The City of Ketchikan  asks your                                                                    
     office   to  prioritize   the  financial   effects  the                                                                    
     pandemic has waged on  Alaska's cruise port communities                                                                    
     when  the  State  considers  how  to  best  direct  its                                                                    
     portion of American Rescue Plan relief funds.                                                                              
3:00:58 PM                                                                                                                    
SENATOR  MICCICHE  acknowledged that  Ketchikan  was  in a  rough                                                               
place due  to the  lack of  revenue. He  suggested that  he would                                                               
contact some of the presenters,  including Mr. Bell, Mr. Uchytil,                                                               
Ms. Lord and  Mr. Hawkins, about the  Municipal Harbor Facilities                                                               
Grant  funding.  He welcomed  members  to  join him,  perhaps  by                                                               
teleconference,  so  applicants  could  provide  more  detail  to                                                               
understand the  priorities better. He estimated  the applications                                                               
totaled $23  million. He surmised  the grant requests  required a                                                               
50 percent match.                                                                                                               
3:03:07 PM                                                                                                                    
There being  no further  business to  come before  the committee,                                                               
Chair   Myers  adjourned   the  Senate   Transportation  Standing                                                               
Committee meeting at 3:03 p.m.                                                                                                  

Document Name Date/Time Subjects
AK Assoc Harbormasters & Port Adminstrators.pdf STRA 4/27/2021 1:30:00 PM
Alaska Municipal League Ports and Harbors.pdf STRA 4/27/2021 1:30:00 PM
Nome Arctic Deep Draft Port.pdf STRA 4/27/2021 1:30:00 PM
Port of Alaska - Anchorage.pdf STRA 4/27/2021 1:30:00 PM
Port of Homer.pdf STRA 4/27/2021 1:30:00 PM
Unalaska - Port of Dutch Harbor.pdf STRA 4/27/2021 1:30:00 PM
ASCE Ports and Harbors Report Card.pdf STRA 4/27/2021 1:30:00 PM
Port of Ketchikan.pdf STRA 4/27/2021 1:30:00 PM
Haines Harbor.pdf STRA 4/27/2021 1:30:00 PM