Legislature(2007 - 2008)BUTROVICH 205
03/27/2008 01:00 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| Alaska Railroad Overview | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE TRANSPORTATION STANDING COMMITTEE
March 27, 2008
1:04 p.m.
MEMBERS PRESENT
Senator Albert Kookesh, Chair
Senator John Cowdery, Vice Chair
Senator Donald Olson
Senator Bill Wielechowski
Senator Gary Wilken
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
Alaska Railroad Overview
PREVIOUS COMMITTEE ACTION
No previous action to report
WITNESS REGISTER
PAT GAMBEL, President and CEO
Alaska Railroad Corporation (ARRC)
Anchorage, AK
POSITION STATEMENT: Presented an overview of the Alaska
Railroad.
WENDY LINDSKOOG, Assistant Vice President
Corporate Affairs
ARRC
Anchorage, AK
POSITION STATEMENT: Answered question on the Alaska Railroad.
PHYLLIS JOHNSON, Vice President
Legal and General Counsel
Alaska Railroad Corporation
Anchorage, AK
POSITION STATEMENT: Answered question on the Alaska Railroad.
ACTION NARRATIVE
CHAIR ALBERT KOOKESH called the Senate Transportation Standing
Committee meeting to order at 1:04:29 PM. Present at the call to
order were Senators Cowdery, Olson, Wilken, Wielechowski and
Kookesh.
^ALASKA RAILROAD OVERVIEW
CHAIR KOOKESH announced an overview of the Alaska Railroad.
1:08:51 PM
PATRICK GAMBEL President and CEO, Alaska Railroad Corporation
(ARRC), said the ARRC was spun off as a quasi-independent
corporation through the Alaska Railroad Transfer Act (ARTA) and
its employees get their pay and benefits from the earnings of
the railroad, not the general fund. It has dock facilities in
Seward, Whittier, Anchorage and Seattle.
MR. GAMBEL said the mission of the railroad is economic
development on a sustainable basis. Page 6 of his handout
illustrated the ways the railroad contributes to the state's
economy; page 7 covered the sources of revenue; and page 8
indicated train movements and tonnage. He said that passenger
service was up to over 500,000 in 2007. Page 9 shows the freight
revenue mix. The ARMS/CNR segment is the railroad's ocean-going
barge service between Seattle and Whittier and Prince Rupert,
Canada. The export of coal as a revenue source has fluctuated.
Mr. GAMBEL said page 11 showed how the railroad's approximately
36,000 acres is distributed. Approximately half of the acreage
could be leased to generate revenue although some of it is
pretty remote. An entire department is responsible for the use
of that property. Pages 12 and 13 demonstrated the flow of money
and how it works for the railroad.
1:14:39 PM
He said that federal funds appropriated to the Alaska Railroad
do not affect federal funding for other state transportation
projects and that ARRC matches federal dollars with its
corporate earnings. The railroad is not part of the Department
of Transportation and Public Facilities (DOTPF) or the state
transportation plan. The total federal grant expenditure over
the last five years is approaching $0.5 billion.
MR. GAMBEL said pages 14-15 show trends and patterns from 2002
to 2007 and that the railroad's capital investments are robust
at about $1 billion. The number of employees has not increased,
but they are working overtime, so figures look like more were
added. The fleet has 50 percent new locomotives and an
increasing number of passenger coaches.
Being a state railroad and moving passengers makes ARRC eligible
for a variety of funds, he said. It does not rely on one single
source, such as earmarks. In the last transportation
authorization bill (Telecommunications Industry Liaison Unit),
the railroad worked hard to reduce its match from 20 down to 9
percent. It then got the Federal Transit Administration to
recognize that the ARRC passenger miles were much higher than
the railroad was given credit for. This gave the railroad
millions of dollars more per year. He reported that the earmarks
were lost exactly the year predicted and the railroad had
already transferred over to the federal formula system of
entitlements given to every railroad that moves passengers on a
regular basis.
1:21:56 PM
MR. GAMBEL said pages 17-18 showed more use of railroad funds
including real estate development, renovations and upgrades of
WWII buildings, parking lots, and trail improvements. Page 19-20
showed the state of the benefit trusts funds as of the end of
2007; the pension fund is more than fully funded at about $9
million and the retired medical trust that was empty three years
ago is now 71 percent funded. Pages 21-22 demonstrated the
safety of the railroad - the best year being 2006. A lot of
energy and dollars go into maintaining safety. Part of that is
maintaining a healthy work force that goes home every night to
their families.
MR. GAMBEL said security in the railroad before 9/11 was
essentially the railroad police looking for vandals. After 9/11
security became a federal mandate and the ARRC hired a full-time
security officer. It must have tested and approved plans for all
places where the Coast Guard has jurisdiction, but it doesn't
yet have sniffing dogs or technology that can detect molecules
that may indicate problems. The railroad received $1 million in
federal grants to improve security with things like smart
cameras, a track watch program, and cipher locks.
1:29:15 PM
Page 24 indicated the second five-year plan. An audit of the
railroad indicated that costs should be controlled so the board
looked at every effort. Page 26 shows adjusted net income from
operations. Corporate net income was good and the operating
ratio was lower than the year before. But what needs to be
improved is the core business of operating trains. Pages 28-29
had a re-forecast the railroad's budget. In the process of
creating a good budget, the railroad found out what kind of
effort was needed to go after improved numbers. As a result, the
adjusted net income from operations took a positive swing ($6.9
million) as did the adjusted operating ratio. The expense side
went down $4.3 million and included positions eliminated by
attrition. Three management positions were reclassified from
expense to capital as well and were being paid out of federal
project funds. One assistant vice presidential position was
downgraded to director and another will be deleted when the
holder leaves.
MR. GAMBEL said page 31 showed management's cost cutting for
2008.
1:36:28 PM
Page 34 shows the 2008 capital budget; the first two months of
it are in and shows that the railroad is significantly ahead of
it. The track rebuilding program is designed to go from
Anchorage to Fairbanks and to be completed in 2012. It is
already ahead of schedule in its third year.
Page 35 had the five-year capital budget. Projects include a
Seward freight dock expansion and passenger dock rebuild,
improved air quality at the coal loading facility and a rebuilt
wharf at Whittier's intermodal passenger facility that can
handle any ocean-going ship. The Chugach Forest Whistle Stop
Service will share new self-propelled Diesel Multiple Unit (DMU)
cars with the Forest Service. The railroad will have summer
service to the glacier and other stops for people who want to
get out to the backcountry and winter service through the
Anchorage and Valley areas all the way to Girdwood. The DMU cars
will be used in the winter when the Forest Service doesn't need
them and run to places like Diamond Center Airport, Girdwood,
and Palmer for State fair days.
Page 38 showed Anchorage projects including refurbishing the
depot and the track and utility work which is already done. Page
39 showed MatSu projects with the rail extension out of Port
Mackenzie at the top of the list. The railroad is a contractor
on that project, but the borough is the owner and has its own
project manager. Legally the railroad deals with the Surface
Transportation Board that has to approve the extension.
MR. GAMBEL said page 40 listed Fairbanks projects and that
included blasting around tunnels because it was becoming
difficult to get the taller and wider trains through their
clearances. One tunnel partially collapsed and an employee was
injured.
The railroad received $44 million for the Tanana Bridge project
south of Fairbanks. It will be Alaska's biggest bridge and the
state has not had to use any state funds. The railroad is
working hard to get the initial funds for the first phase of the
Fairbanks Freight Rail Realignment. The Healy Canyon repair and
line rebuilding has been mostly accomplished, a challenging
project with its loose rock.
MR. GAMBLE said page 42 began the delineation of the benefits
package.
1:44:02 PM
SENATOR WIELECHOWSKI said he's heard concerns about being able
to cross tracks to get to fishing streams and hunting grounds.
MR. GAMBEL replied that it is a tough issue. As people began
buying property outside of towns, in order to get to the road
they needed to cross the railroad tracks. Developers have told
buyers that it's not a problem because the railroad will build
them a crossing, but the railroad never had any intention of
building even one.
Years ago a committee was established to look at every request
on a case-by-case basis. Nationally, he said, railroads are
trying to close crossing; for instance, the Burlington Northern
closed over 400 crossings in 2007 because of accidents and risk.
A crossing needs to belong to an entity that will take
responsibility for it rather than having an "orphan crossing"
where a road has appeared and crossed the tracks as happened
many years ago. It costs about $3,000 a year to maintain a
normal crossing and if an entity like a town takes
responsibility for a crossing and funds the maintenance, the
railroad will permit it.
SENATOR OLSON asked how many crossings have been closed in the
recent past.
WENDY LINDSKOOG, Assistant Vice President, Corporate Affairs,
ARRC, replied that maybe two or three crossings have been
closed. She said she would get back with an exact number.
SENATOR OLSON asked when they were closed.
MR. GAMBEL replied that one closed in Fairbanks last year.
MS. LINDSKOOG said one was in North Pole.
SENATOR OLSON asked what provisions are in place for people who
own property or have an interest on the other side of the
tracks.
MR. GAMBEL replied the railroad tries to work with development
people, but it is a tough problem because they want their
crossing locations changed.
SENATOR OLSON asked about the Ruby crossing. He said he was sure
that people have some type of investment on the other side and
asked what provisions are in place if that's the case.
MR. GAMBEL replied that the Ruby crossing was an orphan crossing
and was access to an industrial area for one particular company.
The railroad made a provision to open it if someone needed to
bring a bulk item across, but for the rest of the time it needed
to be closed.
SENATOR OLSON said that having been in business himself, if he
were fabricating something he would expect to have access.
MR. GAMBEL responded that the company only moves things through
there two or three times a year, and the railroad has made
accommodations to allow for that.
SENATOR OLSON asked what the difference was between a spur line
and a main line.
MR. GAMBEL replied that the railroad doesn't own spur lines; the
customer owns the spur line and usually contracts with the
railroad to either maintain it or even build it. The railroad
does own the mainline.
SENATOR OLSON asked if the real estate is owned by the customer,
including the right-of-way.
MR. GAMBEL replied that's correct. It's their property and their
responsibility to maintain the track according to federal
standards provided by the railroad.
1:52:52 PM
SENATOR WILKEN asked in reference to page 20 how ARRC reached
the decision in 2005 to contribute to retirement and if that
would always be a line item in the budget.
MR. GAMBEL replied that the obligation was very small in 1985
and in the early days the railroad just "cash-flowed" anyone who
retired or became ill. By 2005 the cash flow began to add up.
The railroad made one contribution of $600,000 or $700,000 for
this purpose specifically between 1985 and 2005. It was not to a
federally-recognized account, just a bank account. By 2005 the
railroad was making money and felt it had an obligation to keep
its promise to its employees so it began putting money in this
account on a regular basis in order to fully fund it. It is
currently at 71 percent and will hopefully be fully funded in
the next three years.
SENATOR WILKEN asked for confirmation that this would continue
to be a cost of doing business.
MR. GAMBEL replied that the railroad would be able to pull back
a little once it is fully funded.
SENATOR WILKEN asked who is going to build and pay for the MatSu
spur line.
MR. GAMBEL replied the railroad would build it and the borough
would identify sources to pay for it. He said there was some
talk that the state might want to invest in it.
SENATOR WILKEN asked if the product to be hauled had been
identified.
MR. GAMBEL replied that it's a project with a lot of potential.
The oil companies have talked with the railroad about the
possibility of using rail at Port Mackenzie but in very
preliminary ways. UAF (University of Alaska, Fairbanks)
published a study of Interior development projects that might
make use of it.
SENATOR WILKEN asked if the railroad had decided what products
it is going to haul or revenue stream it will use to support any
debt. He also mentioned a presentation on the Knik Arm Bridge.
According to the presentation, the railroad had no interest in
participating because of the cost. He asked if it was true.
MR. GAMBEL replied that the railroad had been very interested in
the Knik Arm Bridge when it was talked about as a concept, but
when TILU was in its final stages U.S. Representative Don Young
called and said the cost of attaching rail to it was too much
and would have to be cut from the project. That ended the
railroad's interest.
SENATOR WILKEN went to page 41 and said he has been told that
the state would have to contribute around $20 million to $50
million to the Tanana Bridge.
MR. GAMBEL replied that the Tanana Bridge was a component of the
original line extension to Delta Junction that has been in the
works for five years. The railroad got preapproval for $500
million in tax free bonds to finance the project if the Army
budget could pay the debt service. Then a lot of things
happened. After 9/11 the Army decided it could no longer afford
it. The railroad decided that the most important thing about the
project was the ability to cross the river year round on a
predictable basis. The railroad had already received
Environmental Impact Statement (EIS) money for the entire line
extension. So it looked good and once the Army declared the
bridge a requirement, the first installment of the Department of
Defense (DOD) funding, approximately $44 million, was put forth.
In the meantime the railroad had been designing the bridge.
Everybody agreed this was going to be Alaska's bridge from
Canada to Fairbanks and wherever. In order to do that the 3,600
ft. bridge design had to retain the complexity for the grades,
the approaches, as well as the strength to accommodate it all.
So they had the first increment and about that time our
Washington delegation started picking up on the drumbeat that if
the state contributed to some of these projects it would be a
whole lot easier for it to get some federal money.
2:02:17 PM
MR. GAMBEL speculated if the state did kick in for the bridge,
it still would require a lot of DOD money and the rail line ends
up at Moose Creek leaving 18 or 20 miles to get to the bridge.
The state's contribution could link the end of the rail to the
bridge and then DOD could buy the bridge portion. The DOD could
then use the train to cross the river and deposit troops on the
other side - it would be a complete project. So it may be worthy
of a contribution from the state.
SENATOR WILKEN said this bridge is more like an elevated road.
MR. GAMBEL added to keep the bridge secure in a river that tries
to wander every year on its own, the engineers do what is called
"training the river." An Army Corps of Engineers-approved sheet
pile project would be installed on both sides of the river to
freeze the sides and protect against erosion and changing
course. It would also benefit the people on the Salcha side in
terms of flood control.
SENATOR COWDERY asked how much revenue the airport rail facility
produces.
MR. GAMBEL replied that it's in the hole a lot with the
utilities kept on all winter.
SENATOR COWDERY said that has caused a bit of contention since
it was built. He asked how many vehicles use the railroad's
roads.
MR. GAMBEL replied about 200.
SENATOR COWDERY asked if the railroad pays taxes.
MR. GAMBEL replied the railroad does not pay tax because it was
exempted as a state enterprise.
SENATOR COWDERY asked how many are on the railroad board and who
they are.
MR. GAMBEL replied there are seven board members. The chair is
John Binkley and the vice-chair is Governor Sheffield. The
others are Mayor Menard from MatSu, Commissioner Von Shaven of
DOTPF, Commissioner Noti from the Department of Commerce,
Community & Economic Development, Jack Burton, and Ori Williams,
former president of Doyon.
SENATOR COWDERY asked if the railroad is set up to carry pipe
for the potential gas pipeline.
MR. GAMBEL replied that the route is set up, but the railroad
may need more equipment. It has already straightened track,
completed resurfacing and rebuilt a lot of its 160 railroad
bridges. The principle focus is to be ready for a gas pipeline.
2:08:53 PM
SENATOR COWDERY asked why the railroad isn't on the executive
budget.
MR. GAMBEL replied that there were probably many reasons in the
beginning, but from his perspective the spin-off from the state
that was done to make this a business enterprise has worked well
since 1985. The legacy of not being taxed ensured the railroad's
ability to sustain itself as well as having usable real estate
and the wherewithal to be market responsive and flexible. The
idea was that the railroad would make a profit that would be
rolled back into it and the state coffers - as well as the
communities along the rail belt.
SENATOR COWDERY asked if the public is aware of all the
railroad's transactions and the salaries of its employees. He
asked if it was available online.
MR. GAMBEL replied that only his salary was available online.
Railroad employees are not state employees. As a self-sufficient
business enterprise of the state, the privacy of employees is
respected.
SENATOR COWDERY asked if Mr. Gambel negotiated contracts.
MR. GAMBEL replied that the railroad was directed to follow the
state procurement and ethics rules and put out an RFP (Request
for Proposal) when seeking contractors.
SENATOR WIELECHOWSKI asked if Mr. Gambel had an opinion on using
the railroad's right-of-way to build a bullet line from the
North Slope to South Central.
MR. GAMBEL replied that the railroad has a history of talking to
corporations about it. The railroad is an instrument of the
state in terms of development and this is right down its alley
if it can offer a right-of-way in a productive and safe way.
SENATOR WIELECHOWSKI asked the status of the land that no longer
has railroad tracks on it.
MR. GAMBEL replied that the railroad works out an agreement
about moving track and an exchange of land if property of a
specific entity is involved. The situation becomes more
difficult where track has not been used for a long time and the
right of way is eroded and has fallen into the river. This
happened in Palmer with the Matanuska River. Another problem is
presented by Phase 1 of the bypass in Fairbanks which goes right
through the center of the North Pole. Since the town was
homesteaded even before the railroad in 1914, there were former
landowners. When the federal government gave the railroad its
exclusive right-of-way, it could use it as a landowner, but once
it was vacated, a provision in the ARTA provides for that land
to be reverted.
2:16:06 PM
He explained that provision was repealed because giving the land
back caused some real problems. Many people claimed they owned
the land and fighting in court could have gone on for years. For
instance, the borough wanted to put a recreational trail up
through the old right-of-way. The railroad tried to create a
means whereby the railroad could give the land back to the state
and then the state could adjudicate who the former adjacent
landowners were and revert the land back to them. That process
is currently underway. It is the railroad's intention to return
unused property; it just needed to find a way to do it.
SENATOR OLSON asked if it's now standard practice to request 200
feet of easement, 100 feet on either side of the railroad.
MR. GAMBEL replied that it is the standard right-of-way.
SENATOR OLSON asked how long it has been 200 feet.
MR. GAMBEL replied it has been that way since it was deeded over
to the railroad.
SENATOR OLSON asked if there were areas that did not have 200
feet.
MR. GAMBEL replied yes.
SENATOR OLSON asked where.
MR. GAMBEL called on Phyllis Johnson to answer.
PHYLLIS JOHNSON, Vice President, Legal and General Counsel,
Alaska Railroad Corporation (ARRC), replied that one of the
military bases up north didn't have a 200-foot right-of-way,
part of the Anchorage International Airport and a stretch on the
outskirts of downtown Anchorage. She said there may be a few
others areas.
SENATOR OLSON asked if all land given to the railroad was deeded
over from ARTA. He really wanted to know if ARRC owns the two or
three railroads ran out of Nome over 100 years ago and he wanted
to know if ARRC still owned that land.
MR. GAMBEL replied no.
SENATOR OLSON went back to the reversionary clause that was
repealed and asked if that meant the governor could redesignate
who it belonged to or after a period of time it would go back to
the adjacent owners or whoever owned it before.
MR. GAMBLE responded the period of time before reversion was 18
years.
SENATOR OLSON asked why that was repealed.
MR. GAMBEL explained what brought it to a head was that the City
of Palmer wanted to build a recreational trail starting downtown
on a median park strip that was railroad right-of-way - but
trees were growing up where the tracks used to be. The right-of-
way used to access a coal field. ARRC asked the City if it
really wanted 80-car coal trains running through the middle of
the town like the old days and they said it would never happen.
This is a good example of the railroad never needing to use a
right-of-way again and it had to decide the best way to dispose
of that state land. The ARTA gave the railroad specific
authority to deal it and to have fiduciary responsibility - much
like Department of Natural Resources (DNR).
2:21:23 PM
The 18-year mark was approaching and the adjacent landowners
were all lined up to fight it out; it was clear the borough and
the city would never get that property. The reversion act was
the problem and repealing it created time to deal with this
property and other similar situations. The railroad got the
federal language changed to delete reversion after 18 years.
Subsequently the property was turned over to the city and it has
become a recreational route.
SENATOR OLSON said that sounds like the government has taken
private property and used it for a railroad initially and then
didn't want to give it back to the people that originally owned
it and he had a problem with that. It sounds like there's
collusion between the governments against the landowners that
used to own that area. He asked if the railroad would be opposed
to putting the reversionary clause back in.
MR. GAMBEL replied the federal language would have to be changed
to do that.
SENATOR OLSON remarked that he thought things could be done on
the state level to address some of the problems, but he didn't
see a mechanism to give property back to private landowners.
MR. GAMBLE responded the good news is that the percentage of
land being discussed is very small and clustered in the
Fairbanks area. The railroad is trying to live up to the spirit
and intent of what the state had intended with regard to
reversion. If the railroad doesn't need the property, it must be
disposed returned to the state or the landowners. The railroad
didn't know what the state's position would be in North Pole.
The best they could figure is to revert the property to the
state and then it's the state's responsibility to figure out
which landowner it eventually reverts to.
SENATOR OLSON said he could see problems with people not having
access to land because of no crossings, but a bigger problem
exists when the railroad doesn't provide access to its outside
land.
MR. GAMBEL replied, "We owe a crossing in that case" and the
extension in MatSu is a good example. If that rail line was run
40 miles north without any crossings, it would create the
situation Senator Olson was talking about. In that plan, the
railroad would have to pay for those crossings. They would be
either "split-grade" or "at-grade" depending on what the traffic
would bear and what's affordable. The railroad has a
responsibility to allow people access to their property. The
problem arises when the railroad was there first and the people
came in later, bought the property on the other side and want
their own crossing but don't want to pay for it.
SENATOR OLSON asked how often that has happened compared to when
people owned the land before the railroad.
MR. GAMBEL replied that most of the cases they deal with are
people wanting access after the railroad has been built.
SENATOR OLSON asked for an overview of safety and the health
benefits plan, and when the last accident was that resulted in
death or a serious problem.
MR. GAMBLE replied the last injury in the past seven years since
he's been with the railroad was a crushing injury in Whittier
when rail cars were being moved on and off the barge and in the
mid-90s, an employee was fatally injured on a cat by being
pushed into Turnagain Arm by a snow slide. He was not aware of
any before that.
SENATOR OLSON asked what the railroad has done to make sure this
doesn't happen again.
2:28:32 PM
MR. GAMBEL replied the railroad spends a lot of time on risk
mitigation and close-call analysis. The whole safety culture of
the railroad is built around prevention. It has cancelled trains
because the snowfall was unstable and has an avalanche expert on
staff. It uses acoustical and laser censors and tries to
determine here the next big problem might arise. Whittier, for
example, is a tough and dangerous place to operate and the only
alternative to sometimes stopping operations entirely is to
reduce the risk to the greatest extent possible. The railroad
has basically eliminated all serious injuries over the past
several years.
SENATOR OLSON commended the railroad and said he assumed the man
involved in the crushing accident and the family of the man who
was killed were taken care of.
MR. GAMBEL replied the state did the best it could and followed
the law, but the crushed victim would never be the same. He
didn't know the man's insurance situation.
CHAIR KOOKESH asked what happened to the train master who was
not entirely truthful in his statement after the Whittier
accident.
MR. GAMBEL replied that it was difficult to determine if he was
truthful or not. It was a panic situation with a lot of people
talking on the radio and yelling and trying to untangle who was
saying what was difficult.
CHAIR KOOKESH asked Mr. Gambel what his conclusion was since he
had been there.
MR. GAMBEL replied the supervisor was disciplined.
CHAIR KOOKESH asked in what way.
MR. GAMBEL replied that the man was not a state employee and Mr.
Gambel would rather not get into the privacy of how management
acted.
CHAIR KOOKESH said he was not talking about a name, just an
incident.
SENATOR OLSON said the last thing he wanted was to have someone
significantly injured, and judging from what Mr. Gambel said,
the injured man is not satisfied with what he got. He asked if
all the supervisor got as a result was a reprimand.
MR. GAMBEL said the situation was quite complicated. The
supervisor was not reprimanded for the crushing incident. He was
reprimanded because the employee committed an unsafe act five
minutes before the accident and had he been disciplined at that
moment, the accident would have been avoided. The manager did
not call the employee on his error and the employee committed
the unsafe act a second time, which is when the accident
occurred. The employee had stepped between two cars, a totally
unacceptable action. He continued:
The manger instead said, I thought I saw him do that,
I wasn't real sure so I'm going to watch him more
closely. He watched him. They got into the second
piece of this thing. The incident happened. The
manager was yelling. There was a guy on the barge
yelling. They were talking over the radio. It was all
happening like that and nobody knows who said what to
who and whether or not it would have happened. So it's
impossible to untangle a momentary situation like
that. But it was clear that five minutes before we
could have prevented that accident. That is what the
manager was disciplined for.
2:34:50 PM
SENATOR WILKEN mentioned that Ms. Walstead who has reversionary
issues with the railroad was present at the meeting. He said she
supplied 10 questions to the committee. He asked Chair Kookesh
if the committee could request the answers to those questions in
writing.
CHAIR KOOKESH agreed to do that.
SENATOR WILKEN said he thought the answers to the questions
might facilitate understanding of this issue.
MR.GAMBEL said the railroad has had a long dialogue with Ms.
Walstead. He said she's a good example of what the railroad is
trying to do in terms of reverting property back and he is
hopeful her family will receive the satisfaction they desire
regarding this issue. He said he'd be happy to answer the
questions she has provided.
CHAIR KOOKESH asked Mr. Gamble to describe the percentage of
Alaska hire on the railroad. He had read that one of the
requirements for railroad employment is having worked for
another railroad before applying to AARC and since there is only
one railroad in Alaska, he asked how one gets experience if they
don't come from out of state.
MR. GAMBEL replied that Alaska hire for the past five to seven
years has been at about 90 percent overall. Fifteen managers and
86 union employees were hired in 2006; 2 in each category were
from out of state. In 2007, 8 of 16 managers and 7 of 70 union
members were hired from out of state.
2:38:53 PM
One issue that drives hiring from out of state is the quest for
individuals who have specific expertise that is unavailable in
Alaska. For example, the railroad needed expertise in a piece of
technology that will go into all the railroad's locomotives to
help make them safer. The railroad's locomotives are used all
over the country and sometimes it requires an engineer or
technologist who is exceptional in his knowledge of it.
However, Mr. Gamble said most hirings are from within Alaska.
Employees are brought in and trained at what he calls "Choo Choo
U". There are over 50 classes including leadership and
management training available to over 2000 employees. When the
railroad hires employees who don't have previous skills in the
railroad business they are taught the new skills or sometimes
the railroad may send them out of state to community colleges.
These colleges have been contracted by other railroads to teach
specific courses like how to become a brakeman, a conductor or a
dispatcher.
CHAIR KOOKESH asked what the railroad's relationship is with the
union.
MR. GAMBEL replied that it's a pretty good relationship. He said
he's been involved in 11 negotiations with the union and 11
agreements have been ratified without having to go to impasse.
His personal philosophy supports the idea that continued
dialogue facilitates a successful relationship between the
railroad and the unions. A halt in dialogue becomes a problem.
He said that is the position the railroad is in now. It has
received claims of unfair labor practices. The issue is now with
the lawyers, but he thinks the best thing to do is get back to
the table.
CHAIR KOOKESH asked if there are currently any unfair labor
practices filed against the railroad.
MR. GAMBEL replied there are currently two on file. One has been
filed against the railroad and the railroad has filed one
against the union for a statement it made in a letter to its
rank and file.
CHAIR KOOKESH asked what the status of the claims is.
MR. GAMBEL replied they are being adjudicated. Unfortunately,
the union and railroad have stopped talking to each other. He
has hopes they will both agree to get back to dialoguing.
SENATOR OLSON asked if the 15 mangers hired in 2006 were new
positions and how many mangers the railroad has in total.
MR. GAMBEL replied that if an employee is not in the union, he
is a manager. The railroad has 625 union members and 220
managers. Ninety-one managers manage a project, 57 manage
managers, and 72 directly supervise laborers.
SENATOR OLSON said it seemed odd there would be that many
managers in an operation with less than 1000 people.
MR. GAMBEL replied that management is a broad encompassing term
as used by the railroad, and that many who come under that
category aren't supervising anyone. Often they are budget
analysts or schedulers for the maintenance computer system. The
overall ratio of those who directly manage someone in the labor
force is about 1 supervisor for 9 employees.
SENATOR COWDERY asked what percentage of the railroad's income
comes from freight.
MR. GAMBEL replied 70 percent and that figure appeared on page
7; real estate provides 11 percent. He said the overall
percentages have changed slightly. Passenger service has picked
up a lot and freight is slightly down about 5 percent.
SENATOR OLSON asked if anyone outside the railroad reviews the
budget.
2:47:54 PM
MR. GAMBEL replied the budget goes through the railroad's board
first and then it must be submitted annually to the legislature.
No one has ever commented on it.
SENATOR OLSON asked if anyone approves it.
MR. GAMBEL replied that no one approves it except the board.
CHAIR KOOKESH said he tried to get an overall picture of the
railroad because he's from Southeast Alaska. He wanted to invite
unions and employees to the committee to get a broad overview so
he contacted the other unions (that weren't currently
negotiating with the railroad), but while they didn't say
anything, he felt there was an intimidation factor or fear of
being retaliated against. He asked if Mr. Gamble had any opinion
about that.
MR. GAMBEL replied that if he found out that someone in his
organization was doing that, it would be a pass/fail item with
him. As much as he has tried to put his employees at ease, he
said that when he came on with the railroad seven years ago, he
heard that story a lot. He said his success and his training in
the past has been dependent on taking care of the people that
are doing the job they have been asked to do. If anyone in the
supervisory chain tries to stifle that, he has encouraged his
employees to tell him. The only limit is if Mr. Gambel is in
negotiation with a union he's not able to talk about the
negotiation at that particular time. However, if it's other than
union business, his door is always open.
CHAIR KOOKESH said he appreciated having that on the record.
He'd like to be able to invite unions and employees to any
future hearings.
MR. GAMBEL said he would encourage the union to be as forthright
as he has been.
CHAIR KOOKESH thanked everyone for their comments and there
being no further business to come before the committee, he
adjourned the meeting at 2:50:36 PM.
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