Legislature(2021 - 2022)BELTZ 105 (TSBldg)
03/24/2022 01:30 PM Senate TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| SB170 | |
| SB231 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 170 | TELECONFERENCED | |
| *+ | SB 231 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 170-MARINE HIGHWAY CORPORATION
1:36:15 PM
CHAIR MYERS announced the consideration of SENATE BILL NO. 170
"An Act relating to the Alaska marine highway system;
establishing the Alaska Marine Highway Corporation; and
providing for an effective date."
[SB 170 was previously heard on 2/17/22, 2/22/22, 3/17/22, and
3/22/22.]
1:36:45 PM
THERESA WOLSTAD, Staff, Senator Robert Myers, Alaska State
Legislature, Juneau, Alaska, reviewed the AMHS structure. She
stated that the Alaska Marine Highway System (AMHS) is a line
agency within the Department of Transportation and Public
Facilities (DOTPF). A general manager directs the day-to-day
operations of this system. While the existing governance model
presents interdepartmental coordination regarding public
transportation across the state of Alaska, the current system is
vulnerable to funding uncertainty, a lack of unified management
authority, frequent turnover in senior leadership positions,
short-term planning horizon, and exposure to political influence
over operational decisions. One advantage of SB 170 is it
creates a board of directors for the proposed corporation, which
would not need to reorganize with each administration. This
governance model would reduce substantial exposure to political
influence, provide for stable leadership, and foster a long-term
vision in strategic planning to develop reliable ferry services
in Alaska. One purpose of AMHC is to provide predictability and
stability of ferry service to Alaska communities. The proposed
corporation would be granted the authority to set rates and
establish routes, schedules, and types of services. The
corporation would also have the authority to contract with other
modes of transportation, enter into agreements to subcontract
delivery of services, and enter into a minimal assurance
agreement with the state to reflect the actual transportation
needs of the state.
MS. WOLSTAD deferred to Mr. Carpenter to present a PowerPoint
providing more detailed information.
1:39:20 PM
ROB CARPENTER, Deputy Commissioner, Department of Transportation
and Public Facilities (DOTPF), Juneau, Alaska, began a
PowerPoint on the Alaska Marine Highway System Service and
Routes.
1:40:33 PM
MR. CARPENTER reviewed slide 2, depicting a map that showed the
vessel routes for the ferries serving Southeast Alaska,
including the Matanuska, Kennicott, LeConte, and Lituya. He
noted that AMHS ferries serve communities from Bellingham to
Haines and Skagway. The Matanuska and Kennicott travel to
Bellingham every other Friday. The Kennicott travels from
Bellingham to Haines and Skagway, Yakutat, and across the Gulf
of Alaska. It is the only AMHS vessel that crosses the gulf. He
characterized the LeConte as the workhorse of Southeast Alaska.
He noted the Lituya travels between Ketchikan and Metlakatla.
1:41:27 PM
CHAIR MYERS related his understanding that the Columbia was
either in layup or about to layup. He asked whether the Columbia
was previously used for the cross-Gulf route, and if the vessel
would resume that route.
MR. CARPENTER responded that the Columbia does not cross the
Gulf of Alaska because she is not ocean certified. He deferred
to Captain Falvey.
1:42:13 PM
JOHN FALVEY, General Manager, Marine Highway System, Department
of Transportation and Public Facilities (DOTPF) Ketchikan,
Alaska, agreed that the Columbia lacks an ocean-class hull, so
it cannot cross the Gulf of Alaska without permission from the
United States Coast Guard (USCG). The two ships that are ocean
class vessels are the Tustumena and the Kennicott. He noted the
new Tustumena replacement vessel (TRV) will also be rated as an
ocean-class vessel.
1:43:00 PM
MR. CARPENTER added that the Tazlina, an Alaska Class Ferry
(ACF), also serves Southeast Alaska. When the Columbia returns
to service, she will serve Bellingham and assist the feeder
vessels.
1:43:30 PM
MR. CARPENTER reviewed slide 3, AMHS Ports - Southeast. He
stated that the "x" on the chart shows the ports that the
vessels could serve. For instance, the Aurora could dock at
Angoon although she typically serves Prince William Sound (PWS).
1:44:03 PM
CHAIR MYERS asked for the main reason that stops the vessels
from going to all of the ports.
MR. CARPENTER deferred to Captain Falvey but he believed it was
primarily due to the physical infrastructure.
1:44:27 PM
CAPTAIN FALVEY agreed it was the match up to the infrastructure,
including the dolphins. Some vessels cannot use some of the
docks.
1:44:43 PM
SENATOR MICCICHE asked for the financial reasons that AMHS was
not serving the communities.
CAPTAIN FALVEY explained that AMHS has tended to operate the
ships zonally. For example, the LeConte operates in Southeast
Alaska, the Aurora stays in Prince William Sound (PWS), the
Columbia typically runs in Southeast Alaska from Haines and
Skagway, and the Kennicott runs cross-Gulf. AMHS has modified
the Whittier dock to accommodate the new Alaska Class Ferries
(ACF). Thus, if an ACF operates in PWS, it will match up to all
of the docks. He noted AMHS is currently working with Subcoastal
Region Engineering to upgrade Pelican in Southeast Alaska and
Chenega Bay in Southwest Alaska to accommodate ACFs. As the new
vessels come in, AMHS will achieve consistent matchup in Alaska.
MR. CARPENTER added that some depth of water issues prevented
some vessels from using some docks.
1:46:17 PM
MR. CARPENTER reviewed slide 4, Vessel Routes - Southwest,
showing the vessel routes for the Aurora, and Tustumena from
Bellingham to Dutch Harbor. The Kennicott cruises to Whittier on
its cross-Gulf trip, and when the Tustumena travels to Chignik,
Sand Point and other communities along the Aleutian Chain, the
Kennicott will serve Chenega Bay, Homer, Kodiak, Old Harbor, and
Ouzinkie.
1:47:01 PM
MR. CARPENTER reviewed slide 5, AMHS Ports Southwest,
consisting of a chart showing the ports that vessels can serve.
1:47:21 PM
CHAIR MYERS asked whether the Aurora stays in PWS because the
vessel is not rated as an ocean-class vessel.
MR. CARPENTER answered yes. He stated that the LeConte and
Aurora are 235-foot sister inland water ships that are not
ocean-going.
1:47:44 PM
MR. CARPENTER reviewed slide 6, Current Fleet Status, which
consisted of a map showing the vessels in service and those in
the shipyard. The Aurora operates in PWS, the Matanuska runs
from Bellingham to Haines and Skagway, the Lituya runs between
Ketchikan and Annette Bay, and the Tazlina works the Northern
Panhandle communities, including Angoon, Gustavus, Hoonah,
Juneau, Haines, and Skagway. He stated that the LeConte was
scheduled for layup in late March, the Hubbard is having crew
quarters installed at Vigor shipyard, and the Columbia will soon
be mechanically ready, but AMHS must address crew issues. He
characterized the Kennicott as the fleet's workhorse, running
most routes. He indicated the Tustumena would be in the yard for
a capital improvement project for at least half of the summer.
1:49:13 PM
MR. CARPENTER reviewed slide 7, the Historical Revenues and
Operating Costs, which consisted of bar graphs showing the AMHS
Fare Box Recovery from 1992-2023. He noted that the salmon-
colored bar reflects the generated revenue, dark blue represents
the other fund sources, primarily unrestricted general funds
(UGF), and the gold line depicts the fare box recovery. He noted
the figures were adjusted for inflation. He pointed out that the
budget was $140 million in 1992, similar to the FY 2023
Governor's budget. He explained that the fare box declined
significantly from 2006 through 2018. At the time, the budgets
were higher, and AMHS was running more ships, but the revenue as
a percentage of the budget was less. He directed attention to
the lower right, which shows that the budget has been funded for
the last two years with federal funds, but AMHS is still
collecting the revenues, which will be deposited to the Marine
Highway System Fund.
1:50:56 PM
ANDY MILLS, Legislative Liaison, Office of the Commissioner,
Department of Transportation and Public Facilities (DOTPF),
Juneau, Alaska, stated that later on in the presentation, he and
Mr. Carpenter will reference slide 7 to show trends.
1:51:17 PM
SENATOR MICCICHE remarked that this slide shows some decisions
that were counter to ones the department probably would like to
have made by adding service and vessels when ridership was
declining.
MR. CARPENTER agreed that his remarks were fair.
MR. MILLS noted that airline travel had impacted ferry service,
but the reliability of vessels and other factors affect
decisions people make when deciding whether to travel by ferry.
He acknowledged that accessibility and cost affect those
decisions.
1:52:30 PM
MR. CARPENTER reviewed slide 8, Statistical Information:
Passengers. He referred to the 2006-2017 time period, noting
that the department provided significantly more weeks of
service, but there wasn't a corresponding spike in passenger
traffic. Although AMHS was doing more with less crew, it may not
have been the most efficient use of capacity. He indicated that
the figures were not adjusted for inflation. He directed
attention to 2019, 2020, and 2021, years dramatically affected
by COVID-19.
1:53:39 PM
CHAIR MYERS pointed out differences regionally, noting that AMHS
had a decent increase in ridership in Southwest Alaska, but
Southeast Alaska traffic remained flat.
1:53:56 PM
MR. CARPENTER reviewed slide 9, Statistical Information:
Vehicles. He stated that the vehicle traffic has remained
relatively consistent, partly because AMHS represents an
extension of the highway system.
1:54:35 PM
CHAIR MYERS asked whether AMHS has considered adding vehicle
space on new vessels, perhaps having a double car deck.
MR. CARPENTER indicated that the car decks on the TRV were
expanded to accommodate growing vehicle traffic. He recalled
AMHS considered not having any passenger quarters, but since
this vessel travels to the Aleutian Chain, retaining passenger
quarters were deemed appropriate. He deferred to Captain Falvey
for additional comments.
CAPTAIN FALVEY stated that the Alaska Class Ferry (ACF) has
considerably larger car decks than the LeConte and Aurora. He
indicated that the plan would be to replace the LeConte and
Aurora with ACFs with an additional car deck. Further, the
Tustumena Replacement Vessel (TRV) will have considerably more
vehicle capacity than the Tustumena.
1:56:42 PM
SENATOR KIEHL offered his view that the chart mirrors the
economic activity in Southeast Alaska. He recapped that
Southeast Alaska had two pulp mills and a robust commercial fish
sector, but when the pulp mills closed, AMHS suffered a downturn
in passenger traffic. It flattened out as the economy hit a
plateau and began to recover. He directed attention to the
northern end of the Southeast Alaska region, noting budget cuts
from FY 2016 onward. He asked whether the statistical
information could be overlaid with the size of the economy.
MR. CARPENTER agreed to do so.
1:58:09 PM
SENATOR MICCICHE stated that while the industry economy dropped,
Alaska has seen dramatic growth in tourism and independent
travelers. He asked whether AMHS has any idea which sector
accounts for the primary sources of vehicle traffic.
MR. CARPENTER offered his view that the vehicle source was a
combination of local, tourism, and commercial traffic.
CAPTAIN FALVEY agreed that vehicle traffic was a combination. He
elaborated that AMHS moves military families and locals in and
out of Alaska and serves independent travelers. In 2014, AMHS
had 11 ships running but did not have any significant changes in
vehicle traffic. He acknowledged that AMHS ships had been under
capacity for passenger travel, which improved, in part, by
running fewer ships.
2:00:10 PM
MATT MCLAREN, AMHS Business Enterprise & Development Manager,
Department of Transportation and Public Facilities (DOTPF),
Ketchikan, Alaska, added that AMHS carries fish vans seasonally.
He indicated that 60 percent of the traffic from Bellingham
during the summer was due to non-resident travelers and 40
percent from residents. The type of traveler switches to 60
percent resident and 40 percent non-resident travel in the
winter. He related that AMHS carries substantial numbers of
recreational vehicles in Prince William Sound (PWS) and tourist
traffic between Whittier and Valdez. He noted that rural Alaskan
villages use the system to transport fish or support other
industries. He offered his view that it was an even mix between
resident and non-resident vehicular traffic statewide.
2:01:20 PM
MR. CARPENTER added that the military is a big AMHS customer. He
stated that AMHS meets with the admiral of the US Coast Guard
several times a year, assuring him that AMHS will be available
to assist military customers moving to and from Kodiak and
Bellingham.
2:01:54 PM
MR. CARPENTER reviewed slide 10, Forward Funded Budget
Structure. This slide depicts a timeline for the budget cycle,
including the schedule release in August 2021, covering October
through September 30, 2022. He indicated that this allows people
to book and have a reliable schedule. DOTPF is working on the
budget for next year, which will be released in July or August,
as shown in yellow on the slide. He indicated this came about
because the legislature appropriated $64 million in bridge
funding to allow AMHS to have a full 12 months of funding.
2:03:39 PM
CHAIR MYERS wondered whether a government shutdown would affect
AMHS since it has six-month forward funding.
MR. CARPENTER agreed that AMHS was funded to September, with
appropriations covering the calendar year.
2:04:09 PM
SENATOR SHOWER asked how the potential federal infrastructure
funding of $200 million affects planning.
MR. CARPENTER answered that the department proposes using the
infrastructure funding for operations, which is in the operating
budget for $142 million. He stated that just because it is
federal funding doesn't play into the decision-making other than
the state must follow federal rules in the Notice of Funding
Opportunity.
2:05:01 PM
SENATOR SHOWER asked for the cutoff date.
MR. CARPENTER indicated that the department should receive the
Notice of Funding in April 2022 and apply for the grant shortly
after that, but he was unsure of the actual timeline. He
anticipated the state would potentially receive two years of
federal infrastructure funding in December 2022 for FY 2022 and
FY 2023. The department would need to plan how to spend the
potential $400 million.
SENATOR SHOWER wondered whether AMHS would need supplemental
funding, but he acknowledged that Mr. Carpenter couldn't answer
that question.
MR. CARPENTER reiterated that AMHS is funded through calendar
2022.
SENATOR SHOWER expressed an interest in the fallback position if
something happened and the federal funds were delayed.
MR. CARPENTER offered to provide the committee with more
details.
2:07:27 PM
SENATOR KIEHL stated that once the federal funds are received,
AMHS will not need to worry about the sweep for the next five
years because of the federal funding. He surmised that the
federal funding would not be extended beyond five years. He
indicated that AMHS would need to have the appropriate buffers
and fiscal structure in place to continue to operate on a
calendar year basis. He asked members to keep the benefits of
AMHS having funding for the calendar year in mind for publishing
the ferry schedule and making it possible for AMHS to provide
reliable planning for its customers.
2:08:26 PM
MR. CARPENTER reviewed slide 11, Service Schedule
Considerations.
• Considerations when drafting a service schedule:
• Overhaul timing of vessels
• Historical Ridership (demand)Historical Revenue
(gross receipts)
• Community events (solicited during draft schedule
public comment)
• Time, distance & speed
• Crew change ports, schedules and work/rest
requirements, (STCW) Standards of Training,
Certification and Watch keeping
• Dock configurations
• SOLAS compliance
• Tide and current restraints In-port times to
account for seasonal loading and unloading times
and weather challenges.
MR. CARPENTER highlighted the challenges in preparing the
schedule. He reviewed the process as shown on the slide.
2:11:17 PM
CAPTAIN FALVEY added that AMHS must consider dock conflicts. He
acknowledged that the union contracts present challenges because
the crews change at certain locations and times, and the ships
must be in the ports to allow that to happen, which can be
challenging. He pointed out that not meeting the schedule could
result in significant overtime, so AMHS must work through crew
changes when it builds the schedule.
2:12:17 PM
CHAIR MYERS asked how the Bellingham run was affected, given
Canada's decision to not allow ships to traverse its waters.
CAPTAIN FALVEY answered that it did not impact AMHS.
2:12:55 PM
SENATOR KIEHL remarked that AMHS couldn't use Prince Rupert.
CHAIR MYERS recalled that cruise ships could not use Canadian
ports or sail within a certain distance of the coastline.
CAPTAIN FALVEY interjected that AMHS has Rights-of-Passage
agreements with Canada.
2:13:32 PM
MR. CARPENTER reviewed slide 12, Operating Plan 2021-2022, which
depicts a fiscal year timeline schedule from 2021-2022 showing
the vessel makeup. He directed attention to the left axis, which
lists the vessels. For example, the Kennicott ran from July 2021
to January 2022, went into overhaul in January, is scheduled to
come out of the overhaul on April 21, 2022, and will resume
service for the remainder of the year. He noted that the
Columbia has been in layup since October. He offered to review
each vessel.
CHAIR MYERS asked him to continue.
2:14:45 PM
MR. CARPENTER said the operating plan drives the more detailed
scheduling.
2:15:00 PM
MR. CARPENTER reviewed slide 13, Operating Plan 2022-2023
(DRAFT), which shows the tentative operating plan. He noted that
the Columbia would go into a federal CIP mid-September to repair
the pitch propeller system. The TRV construction is scheduled to
begin in December 2022. The Hubbard crew quarters will be
completed on October 1 and will go into overhaul, then probably
operate in Northern Lynn Canal in November 2022.
2:16:13 PM
MR. CARPENTER reviewed slide 14, Spider Graph - Example Schedule
for Summer 2022, Southwest-Prince William Sound, Week 1. He said
this provides a visual of every ship and port for each week. For
example, the ports are shown on the left axis, and the Tustumena
is shown in blue. The Tustumena will depart Kodiak en route to
Seldovia, Homer, and other ports. The red line shows the Aurora
in PWS traveling to Cordova on Monday, then on to Whittier,
Valdez, and Tatitlek, and back to Whittier and Cordova. He noted
that is the circuit the Aurora will make each week. Meanwhile,
the Kennicott runs to Whittier, then Yakutat, and crosses the
Gulf of Alaska to Juneau.
MR. CARPENTER turned to slide 15, Spider Graph Example
Schedule shows the Kennicott in Juneau on Wednesday, then
traveling to Ketchikan on Thursday, Bellingham on Saturday, then
it reverses. The red bar indicates the LeConte in Juneau,
traveling to Angoon, Hoonah, Juneau, then north to Haines, and
Skagway, then repeats that circuit. He directed attention to the
green line, which shows the Matanuska run from Bellingham to
Skagway. Captain Falvey mentioned that the scheduling must
consider the vessels to avoid port scheduling conflicts.
2:18:53 PM
MR. CARPENTER reviewed slide 16, Spider Graph - Complex
Schedule, Southeast Summer 2014 July to mid-September, Week 1
and 3. He noted that this occurred with a big spike on the graph
when both fast ferries and most vessels were running. He
envisioned that this had taken substantial time to map out.
2:19:42 PM
CHAIR MYERS asked about configurations of car deck space on
ships depending on whether it was a cross-Gulf sailing or
staying within Southeast Alaska.
MR. CARPENTER deferred to Captain Falvey.
2:20:28 PM
CAPTAIN FALVEY stated that it would depend on the specific stops
and how the vessel needs to be loaded because the Kennicott
travels to Yakutat and on to Whittier.
2:21:05 PM
SENATOR MICCICHE referred to the genesis of the ferry system
from 1949 until 2008. He stated that when demonstrated, a well-
run system with new vessels provides a very different picture
than the current struggling, underfunded system with older
ships. For example, the private ferry ran in 1949 but failed
because it could not attract year-round customers. It began
running after the Territory of Alaska purchased the vessel in
1951. In the first year, AMHS made a $277 profit, but by 1952
the system began losing $43,000 annually. He suggested that
members read the history since it provides a relevant
perspective of AMHS.
2:22:56 PM
MR. CARPENTER referred to a video on YouTube about the ferry
system in the 1970s in which some of the same issues were
mentioned.
2:23:38 PM
CHAIR MYERS held SB 170 in committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 170 Research Document_Fleet Status 3.1.2022.pdf |
STRA 3/24/2022 1:30:00 PM |
SB 170 |
| SB 170 Research Document_Vessel Information Table by AMHS DOT.pdf |
STRA 3/24/2022 1:30:00 PM |
SB 170 |
| SB 170_Research_AMHS Procurement Fact Sheet.pdf |
STRA 3/24/2022 1:30:00 PM |
SB 170 |
| SB 170_Research_Current AMHS Operating Plan 1.24.2022.pdf |
STRA 3/24/2022 1:30:00 PM |
SB 170 |
| SB 170_Research_Tariff Impacts_Section 42.50.570.pdf |
STRA 3/24/2022 1:30:00 PM |
SB 170 |
| SB 231 DCCED Fiscal Note.PDF |
STRA 3/24/2022 1:30:00 PM |
SB 231 |
| SB 231 Sectional Analysis 03.24.2022.pdf |
STRA 3/24/2022 1:30:00 PM |
SB 231 |
| Transmittal Letter HB 231 AKRR 03.11.22.pdf |
STRA 3/24/2022 1:30:00 PM |
HB 231 |
| S TRA - AMHS Routes and Service (03-24-2022).pdf |
STRA 3/24/2022 1:30:00 PM |
SB 170 |