Legislature(2009 - 2010)HOUSE FINANCE 519
02/11/2009 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Overview and Update: Municipality of Anchorage – Port of Anchorage; Mat-su Borough – Port Mackenzie | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
February 11, 2009
1:35 p.m.
1:35:11 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 1:35 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Vice-Chair
Representative Allan Austerman
Representative Harry Crawford
Representative Anna Fairclough
Representative Richard Foster
Representative Les Gara
Representative Mike Kelly
MEMBERS ABSENT
Representative Mike Hawker, Co-Chair
Representative Reggie Joule
Representative Woodie Salmon
ALSO PRESENT
Bill Sheffield, Port Director, Port of Anchorage; Marc
VanDongen, Port Director, Port MacKenzie
PRESENT VIA TELECONFERENCE
None
SUMMARY
^Overview and Update: Municipality of Anchorage - Port of
Anchorage; Mat-Su Borough - Port MacKenzie
1:37:09 PM
BILL SHEFFIELD, PORT DIRECTOR, PORT OF ANCHORAGE, related
details of a handout entitled "Port of Anchorage" (copy on
file.) He began with page 3, the Economic Impact. He stated
that the Port of Anchorage serves 85 percent of the
population, providing 90 percent of consumer goods. The
total economic impact is estimated at $663 million. The
freight activity at the Port contributes to $137 million in
household earnings and 4,142 jobs. Ninety-seven percent of
freight shipments between Puget Sound and Alaska are
waterborne. He observed that 46,000 jobs are directly
dependent on Alaska trade and shipping. The Port was
classified as a Port of National Significance by the
Department of Transportation - Maritime Administration.
Mr. Sheffield highlighted the map on page 4, which shows the
regional and statewide importance of the transportation
supply routes from the Port of Anchorage.
1:41:05 PM
Mr. Sheffield turned to page 5, the business at the Port of
Anchorage. He gave examples of the types of businesses
served by the Port.
Mr. Sheffield related the importance of the Port of
Anchorage and the U.S. Military, as depicted on page 6. He
described the method the military uses to transport
equipment. Page 7 shows pictures of the Port as the supply
hub for the U.S. Military in Alaska.
1:44:58 PM
Mr. Sheffield showed a film, "Port of Anchorage - A Mission
of Service" that depicts the assets of the Port. The film
described the mission and uses of the Port and emphasized
the importance of the Port to the military.
1:53:41 PM
The film highlighted the expansion of the Port of Anchorage,
which is now in its middle phase.
1:56:22 PM
Mr. Sheffield showed pages 9 - 12 of the handout, which
depict the intermodal expansion project of the Port and
showed the various phases of the expansion. He pointed out
that $20 million a year for six years has been requested.
The Port of Authority's current request is for $120 million
in advanced funding to complete the project.
1:58:20 PM
Mr. Sheffield turned to construction costs and funding on
pages 13 - 18. He showed expenses with and without the $120
million funding in 2009. He listed the advantages realized
with advanced funding such as contracts completed earlier
and materials ordered in advance. He shared the Port's
website where more information can be accessed.
Mr. Sheffield reiterated that the request is for $120
million to finish the Port's construction. There is $10
million currently in the capital budget for that purpose.
He did not expect any funds from the Federal Stimulus
Package. He opined that seeking funding for the Port is an
uphill battle.
2:01:54 PM
Representative Crawford asked how much would be saved by
buying steel now for the projects. He also asked if the
cruise ship initiative funds could be used for the Port
expansion.
Mr. Sheffield observed that cruise ship initiative money
could be accessed in the future since there is a plan to
have a dedicated cruise ship space. He described the
requirements to put a cruise ship dock in place. Addressing
Representative Crawford's first question, Mr. Sheffield
understood that steel prices have recently leveled off. He
thought such a purchase might qualify for the Stimulus
Package because steel is made in the U.S. He spoke of
potential savings due to shipping methods.
2:05:59 PM
Representative Gara shared that he does not have a problem
with the Port of Anchorage's need, but questioned the cost
and the lack of fiscal support by the City of Anchorage.
Mr. Sheffield reported that the funds consist of 50 percent
federal, 25 percent state, and 25 percent port funds.
Representative Gara reiterated that Anchorage has not
contributed any money to the project. Mr. Sheffield agreed
that Anchorage has not contributed funds.
2:08:33 PM
Representative Gara questioned if the state match was needed
in order to receive federal funds. Mr. Sheffield said there
is no required state match, but it is a good deal for the
federal government because the state pays 25 percent and the
port pays 25 percent. Representative Gara asked if a state
match is required in order to get federal funds. Mr.
Sheffield explained that a match is required on some monies
such as for federal highways and that money is provided by
the Port Authority.
Representative Gara recalled previous requests of $10
million and $20 million by the Port Authority; now the
request is for $180 million. He voiced concern about
escalating costs. Mr. Sheffield returned to page 12 to show
the difference between 2009 and 2010 construction costs and
the stages needed to complete the project. He emphasized
that forward funding makes sense due to the yearly increase
in costs.
2:14:13 PM
Vice-Chair Thomas asked how many containers would be
shipped. Mr. Sheffield replied that there would be about
2,000 containers a week. He explained that charges are by
the ton. There is estimated to be a 1 percent increase in
tonnage this year. Shipping grosses about $14-$15 million
in revenue now, and by 2019, it will pull in about $20
million a year.
Vice-Chair Thomas asked about revenue from haul back to
Seattle. Mr. Sheffield reported that there was very little
haul back; rental cars, military, or private shipping.
2:16:45 PM
Representative Foster thanked Mr. Sheffield for his
presentation and said he is in favor of the project.
2:18:43 PM
MARC VANDONGEN, PORT DIRECTOR, PORT MACKENZIE, emphasized
that he was not before the Committee to request funding. He
stressed that the Ports create jobs and economic development
in Alaska. He shared his background. He stated full
support for the Port of Anchorage.
2:21:17 PM
Mr. VanDongen referred to a handout entitled, "Port
MacKenzie - Gateway to the Matanuska-Susitna Borough" (copy
on file.) He shared the Port's mission and vision - pages 1
and 2. He emphasized that Port MacKenzie is not in
competition with the Port of Anchorage and has a different
function. Port MacKenzie's mission is to develop a world
class Alaskan deepwater port capable of safely and
efficiently transporting people and commodities. The vision
is to create new employment opportunities, stimulate
economic development and establish a transportation link for
exporting natural resources from the State of Alaska. He
pointed out that the railroad is key to Port MacKenzie's
development.
Mr. VanDongen reviewed the Port MacKenzie's main goals for
regional improvement on pages 3 and 4. He began by listing
the five initial goals: to construct utilities to the Port,
to construct docks, to complete road improvements, to
develop a year-round ferry system, and to construct a rail
line from the Parks Highway to the Port.
2:24:45 PM
Co-Chair Stoltze asked the origin of the Port MacKenzie
project. Mr. VanDongen related that in 1999, there was a
$7.2 million railroad grant for the development of Port
MacKenzie. A road was put in and an initial barge dock was
built. That phase was completed for $7.2 million. Next, a
permit was acquired to construct the deep-draft dock. The
state provided $10 million for that $14.7 million project.
Then, a ferry terminal building was completed. Now, there
is a permit on the Port MacKenzie side to build a ferry
landing. Co-Chair Stoltze added that there were voter-
approved bonds to support the project during the deep-draft
dock phase.
2:27:50 PM
Mr. VanDongen returned to detailing goals 4 and 5 on page 3.
He said that construction of a ferry vessel is in progress
in Ketchikan, a permit for the ferry landing is in hand, and
a permit for the ferry landing at Ship Creek has been
applied for. An ice study is planned. The ferry should be
running by November of 2010. A key goal is to construct the
rail line from the Parks Highway to the Port.
Mr. VanDongen reported on the final three goals, which were
recently added: to construct a rail loading facility at the
Port; to construct a fuel tank farm and connect to Anchorage
via pipeline; and to promote the creation of a petrochemical
facility or LNG plant at Port MacKenzie. He emphasized the
importance of the latter goal.
Co-Chair Stoltze asked how much acreage is available for the
project. Mr. VanDongen clarified that 8,940 acres are
available, which is a big advantage. He described the
advantages of the Point MacKenzie project and lessons
learned from experience.
2:33:11 PM
Mr. VanDongen turned to page 5, the Port District
Boundaries. He pointed out the terminal moraine, which has
sand and gravel available to mine, and he described how it
would be developed. He emphasized that his project was not
in competition with the Anchorage port. He showed where the
rail would come in and where the Knik Arm Crossing was.
2:35:16 PM
Mr. VanDongen showed pictures of the barge dock on page 6,
future expansion of the barge dock on page 7, and the barge
at Port MacKenzie on page 8. He highlighted the deep-draft
dock on page 9.
Mr. VanDongen showed the future expansion of the deep-draft
dock on page 10.
2:39:11 PM
Mr. VanDongen discussed the Port MacKenzie markets on page
11. He highlighted both import and export products. Page
12 shows the Ferry Terminal Building.
Mr. VanDongen explained the design and function of the Cook
Inlet Ferry on page 13. He showed pictures on page 14 of
the Alaska Ship and Drydock in Ketchikan where the ferry
will be constructed. Page 15 also illustrated construction
of the ferry.
2:42:19 PM
Mr. VanDongen showed diagrams of the ferry landings at Port
Mack and at Ship Creek on pages 16 - 19.
In response to a question from Co-Chair Stoltze, Mr.
VanDongen explained the permitting process. He felt
confident that a permit can be obtained for the Ship Creek
Landing. He spoke of the cost of building a trestle and the
timeline involved.
2:47:38 PM
Mr. VanDongen spoke of proposed road corridors and upgrades
needed on page 20.
In response to a question by, Representative Gara, Mr.
VanDongen highlighted the Burma and Knik/Goose Bay roads.
The Burma Road has not been paved.
2:50:56 PM
Mr. VanDongen described the next steps to develop the rail
line - page 21. He reviewed Page 22, "Projected Volumes of
Natural Resources," which was compiled from Dr. Paul Metz's
November 2007 report: Economic Analysis of Rail Link - Port
MacKenzie to Willow, Alaska. He listed the annual tonnage
of the various natural resources to be transported. He
concluded his opinion that there is tremendous potential for
new jobs due to the railway.
2:56:06 PM
Mr. VanDongen showed an artist's rendering of the Goose
Creek Correctional Center on page 23. Representative Gara
asked how it was named. Mr. VanDongen related the naming
process.
Mr. VanDongen turned to page 24, current, new, and projected
businesses related to the project. Pages 25 - 27 outlined
the businesses of Alutiiq Manufacturing Contractors, and
NPI. Page 28 showed the gravel excavation project. Page 29
illustrated the upgrade and paving project. Page 30 listed
the benefits of Port MacKenzie.
3:00:37 PM
Mr. VanDongen showed pictures on pages 31 and 32 of ships in
Cook Inlet and at the dock. The last page, 33, contained
the Port MacKenzie logo.
Vice-Chair Thomas shared a personal story of a previous
logging job. He wondered if there would be similar concerns
with this project. Mr. VanDongen said there would not be
because of stabilizing technology. Vice-Chair Thomas asked
if ice would be a problem. Mr. VanDongen said it would not
and listed prevention measures. Lines are doubled when there
is ice. Two tugboats are also available to break up the ice.
He stressed that Port MacKenzie has not had a single line
snapped. He said extra precautions would be taken.
3:04:15 PM
Representative Gara asked if the Mat-Su Borough has
contributed to the funding of the project. Mr. VanDongen
explained that the Borough of Anchorage contributed $1.7
million toward the deep draft dock; and the mill rate funds
the Port's annual operating budget. He stressed that it only
took five years for the Port to come into the black
(compared to six years for the Port of Anchorage). He felt
the Port would be self sufficient once the route comes on
line. Representative Gara thought it important that the
local government contribute to the project. Co-Chair
Stoltze invited legislators to hear more about the project.
3:06:28 PM
Co-Chair Stoltze termed the project a "success tale".
Representative Foster thanked Mr. VanDongen for his military
service and hard work. Mr. VanDongen saw the project as a
regional benefit.
Representative Kelly asked when the rail connection would be
complete. Mr. VanDongen explained that it could be done by
the end of 2012, subject to funding. Representative Kelly
asked if it was a railroad project. Mr. VanDongen reported
that it was a borough project that would be turned over to
the railroad to operate. Representative Kelly inquired how
much has been spent on the total physical plant. Mr.
VanDongen said that about $25 million has been spent.
Representative Kelly asked if any problems were anticipated
with the ferry. Mr. VanDongen thought that eventually there
would be a second ferry for backup purposes. Representative
Kelly asked if the ferry would be for passenger vehicles and
how much time would be saved. Mr. VanDongen said that once
the Burma Road is upgraded and paved, it would be used for
vehicles, and would save about an hour on the North/South
route.
Representative Kelly wondered if the city of Anchorage was
putting pressure on the Port regarding getting traffic to
the takeoff point on the south. Mr. VanDongen had not had
discussions regarding the issue, but didn't see it as a
problem. He observed they would schedule the ferry truck
use during off hours. Representative Kelly asked how long
the Burma Road was and when it would be done. Mr. VanDongen
said it was about 7.5 miles, plus a bypass, and would cost
roughly $45 million, but he could not project when it would
be done. Representative Kelly asked if more money would be
needed. Mr. VanDongen said he is not requesting any funds.
ADJOURNMENT
The meeting was adjourned at 3:14 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Port Presentation Juneau.pdf |
HFIN 2/11/2009 1:30:00 PM |
|
| Port of Anchorage Persentaiton.pdf |
HFIN 2/11/2009 1:30:00 PM |