Legislature(1993 - 1994)

02/26/1994 03:00 PM House TRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
             HOUSE TRANSPORTATION STANDING COMMITTEE                           
                        February 26, 1994                                      
                            3:00 p.m.                                          
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Representative Richard Foster, Chair                                         
  Representative Gary Davis, Vice-Chair                                        
  Representative Bill Hudson                                                   
  Representative Al Vezey                                                      
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  Representative Curt Menard                                                   
  Representative Jerry Mackie                                                  
  Representative Eldon Mulder                                                  
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  Public Hearing, Ketchikan, Marine Highway/Transportation                     
  Issues                                                                       
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  MICHAEL P. DIXON, Regional Director                                          
  Inland Boatmen's Union                                                       
  P.O. Box 240804                                                              
  Douglas, Alaska   99824                                                      
  586-8200                                                                     
  POSITION STATEMENT:  Testified in transportation issues.                     
                                                                               
  CHERI DAVIS                                                                  
  Box 5723                                                                     
  Ketchikan, Alaska   99907                                                    
  225-6304                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  CAPTAIN ED WILLIAMS                                                          
  P.O. Box 6475                                                                
  Ketchikan, Alaska   99907                                                    
  225-2627                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  KENT MILLER                                                                  
  Consulting Industrial Economist                                              
  500 Front Street                                                             
  Ketchikan, Alaska   99907                                                    
  225-3992                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  GREGORY A. DRONKERT, Director                                                
  Alaska Marine Highway System                                                 
  Department of Transportation                                                 
    and Public Facilities                                                      
  1591 Glacier Avenue                                                          
  Juneau, Alaska   99801                                                       
  465-8827                                                                     
  POSITION STATEMENT:  Answered questions regarding the                        
                       Alaska Marine Highway System                            
                                                                               
  MEREDITH MARSHALL                                                            
  P.O. Box 7418                                                                
  Ketchikan, Alaska   99901                                                    
  225-2134                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  LEIF JENKINSON                                                               
  Box 5342                                                                     
  Ketchikan, Alaska   99901                                                    
  225-5839                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  PHYLLIS YETKA                                                                
  Box 958                                                                      
  Ward Cove, Alaska   99901                                                    
  247-2449                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  WILLIAM SHERMAN                                                              
  2433 3rd Avenue                                                              
  Ketchikan, Alaska   99901                                                    
  225-5042                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  C. L. CHESHIRE, Manager                                                      
  Economic Development Center                                                  
  512 Lower Pine Street                                                        
  Ketchikan, Alaska   99901                                                    
  247-5499                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  BRUCE CHAPMAN                                                                
  P.O. Box 6693                                                                
  Ketchikan, Alaska   99901                                                    
  225-6745                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  JOHN PETERSON, President                                                     
  Ketchikan Chamber of Commerce                                                
  661 S. Pt. Higgins                                                           
  Ketchikan, Alaska   99901                                                    
  247-2686                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  ERIK NELSON                                                                  
  1173 Black Bear Road                                                         
  Ketchikan, Alaska   99901                                                    
  225-6371                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  ROLLO E. BRAY                                                                
  2729 Tongass Avenue                                                          
  Ketchikan, Alaska   99901                                                    
  225-3505                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  JUDITH JENKINSON                                                             
  Box 5342                                                                     
  Ketchikan, Alaska   99901                                                    
  225-5839                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  HANK NEWHOUSE                                                                
  P.O. Box 9508                                                                
  Ketchikan, Alaska   99901                                                    
  225-1290                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  JOHN RITTERBACH, Purser                                                      
  Alaska Marine Highway System                                                 
  Department of Transportation                                                 
    and Public Facilities                                                      
  P.O. Box 9420                                                                
  Ketchikan, Alaska   99901                                                    
  225-9459                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  MAYOR JIM CARLTON                                                            
  1043 Woodland                                                                
  Ketchikan, Alaska   99901                                                    
  225-4261                                                                     
  POSITION STATEMENT:  Testified on transportation issues                      
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 94-6, SIDE A                                                            
  Number 028                                                                   
                                                                               
  CHAIR FOSTER called the meeting to order at 3:10 p.m.  He                    
  thanked the committee members for attending, and thanked                     
  Representative Bill Williams for inviting the committee. He                  
  stated that hopefully the committee could give Ketchikan a                   
  hand in effecting some changes where they are needed.  Chair                 
  Foster acknowledged the presence of Gregory Dronkert,                        
  Director, Alaska Marine Highway System (AMHS), Department of                 
  Transportation and Public Facilities (DOT/PF), whom the                      
  committee members had asked to accompany them on the trip as                 
  a representative of DOT/PF.  He also acknowledged the                        
  presence of staffer Denise Behnke and Elizabeth Bellinghiri,                 
  Aide, House Transportation Committee.                                        
                                                                               
  Number 050                                                                   
                                                                               
  CHAIR FOSTER made the point that the six year plan has been                  
  diverted, and that the statewide priority system seems to                    
  have forgotten the needs of small boroughs such as                           
  Ketchikan.                                                                   
                                                                               
  Number 060                                                                   
                                                                               
  REPRESENTATIVE BILL WILLIAMS thanked the committee for                       
  traveling to the community, and thanked community members in                 
  attendance for their concern.                                                
                                                                               
  Number 070                                                                   
                                                                               
  REPRESENTATIVE BILL HUDSON stated that he hoped the meeting                  
  would be constructive, and that he was happy to be back in                   
  Ketchikan.                                                                   
                                                                               
  Number 080                                                                   
                                                                               
  REPRESENTATIVE GARY DAVIS stated that his area, Seward, has                  
  concerns similar to Ketchikan's, and that he was looking                     
  forward to hearing the concerns of the people of Ketchikan.                  
                                                                               
  Number 088                                                                   
                                                                               
  REPRESENTATIVE AL VEZEY stated that his area, North Pole,                    
  was slightly different than Ketchikan, and that they were                    
  hoping to eventually get the northern terminus for the AMHS                  
  located on the Cheena River.                                                 
                                                                               
  Number 097                                                                   
                                                                               
  CHAIR FOSTER asked that the testimony begin with Mike Dixon.                 
                                                                               
  Number 100                                                                   
                                                                               
  MIKE DIXON, Regional Director, Inland Boatmen's Union (IBU)                  
  of the Pacific, Alaska Region, was first to testify.  He                     
  read the following statement into the record:                                
                                                                               
  "I would like to thank the House Transportation Committee                    
  for allowing us to address them in this open forum.  IBU                     
  members are over 600 strong in the AMHS.  We make up 80                      
  percent of the work force.  We all change in Alaskan ports                   
  and are all Alaskan workers.  This union has done more than                  
  the government can do to support the proposition that all                    
  workers change in Alaska and live in Alaska.                                 
                                                                               
  "As the salary of all workers makes up the greater part of                   
  the budget, we have a profound effect upon the system.  We                   
  believe it is the job of the workers to look after their                     
  jobs.  We don't look after anybody elses job so why should                   
  anyone look after ours?  We feel that it is incumbent upon                   
  each worker as well as the leaders to do what they can to                    
  make sure the Alaskan ferries keep running with the best                     
  service possible.                                                            
                                                                               
  "We believe it would be irresponsible of the workers to say                  
  that it is somebody elses problem whether the ferries give                   
  the best possible performance.  A force of 600 workers, how                  
  they feel about their jobs, how they interact with the                       
  system, can have a profound effect upon Southeast Alaska and                 
  all of Alaska.  Although there is much concern with the                      
  present financial situation of Alaska, we urge the committee                 
  to keep the ferries running at their former level.  Although                 
  Southeast Alaska is charged with the service, the AMHS is                    
  but a pipeline moving one half of its traffic directly from                  
  Prince Rupert and Bellingham to roads leading to Anchorage                   
  and Fairbanks.  The AMHS is a pump sending hundreds of                       
  thousands of people, and tens of thousands of vehicles to                    
  the rest of Alaska.  Don't shut off the supply that feeds                    
  the main arteries of Alaska.  Don't let Alaska go into                       
  cardiac arrest by starving the pump.  We can build many                      
  roads in Alaska, but if vehicles can't get to them they                      
  can't use them.                                                              
                                                                               
  "We are pleased to know that a new vessel is in the planning                 
  and that bids will soon be put out for construction of this                  
  vessel.  We appreciate the work the House Transportation                     
  Committee has done to secure this new vessel.  However, we                   
  realize that we are faced with an aging fleet.  Some of our                  
  vessels are over 30 years old.  By some standards, a                         
  passenger vessel is considered over the hill after 20 years.                 
  There may be a chance in the future to secure more federal                   
  funding as we did with the present vessel.  Also we workers                  
  should consider what role we will take in securing new                       
  vessels.  Possibly there are investments that we can make                    
  that will insure new vessels will be built in the future,                    
  for the fleet and for their future.                                          
                                                                               
  "We would also like to thank the House Transportation                        
  Committee for its support in re-powering the Taku, the new                   
  terminal and ramps, the refurbishments on other vessels, and                 
  elevators being installed for the physically challenged.  At                 
  the same time that the AMHS is urged to make as great a                      
  return on its money as possible, the AMHS has been obligated                 
  to sail only where it has been proven that no one can make a                 
  profit.  If it so happens that the AMHS develops a                           
  profitable run, then it is often prohibited from operating                   
  there.  The AMHS, during the peak season, has been run out                   
  of Glacier Bay, Tracy Arm, and Columbia Glacier.  It is hard                 
  to operate a business where it is common knowledge that                      
  nobody can make it pay.                                                      
                                                                               
  "We know at this time that a corporation called the Maritime                 
  Group out of Seattle has an option to use the YPR terminal                   
  for ferry vessels.  The idea, as we understand it, is that a                 
  foreign bottom ship might run between Seattle and Prince                     
  Rupert where vehicles will be picked up by the AMHS ships.                   
  Since the Seattle run comes closest to turning a profit, it                  
  is easy to see why someone would want to take it over.                       
  However, our understanding is that the Maritime Group would                  
  only operate in the summer, leaving the AMHS to pick up the                  
  unprofitable winter period of having no runs south of Prince                 
  Rupert.  We urge the House Transportation Committee to help                  
  us keep this run which has the greatest change of turning a                  
  profit.  We have developed this run for over 20 years and we                 
  should have a right to operate where a profit can be made.                   
                                                                               
  "Along the same lines, we have four gift shops aboard the                    
  vessels, yet we are allowed to sell only toothbrushes and                    
  postcards, because of fear of competing with shore-side                      
  private businesses.  Again, we argue that the AMHS is a                      
  heart pumping almost half a million passengers and tens of                   
  thousands of vehicles to Southeast and the rest of Alaska.                   
  The pump has to be fed or it cannot pump dollars throughout                  
  Alaska.  On the same line of thought, we support the policy                  
  of discounting travel to senior citizens, school groups, and                 
  physically challenged individuals.  However, could not the                   
  AMHS be given a credit for the free or discounted service it                 
  delivers?  Simply because the AMHS interfaces so greatly                     
  with the public in contrast to other agencies, is this alone                 
  reason to allow it to carry the fiscal shortfall?  Shouldn't                 
  the cost of supporting school groups, senior citizens, and                   
  the physically challenged be shared among all government?                    
  We urge the committee to consider a credit to be given the                   
  AMHS above and beyond its operating appropriation.                           
                                                                               
  "We would like to thank the Transportation Committee for the                 
  chance to address them in this open forum.  We want to                       
  affirm that the IBU is committed to making certain that the                  
  AMHS continues its high level of performance well into the                   
  future.  Thank you."                                                         
                                                                               
  Number 252                                                                   
                                                                               
  CHAIR FOSTER thanked Mr. Dixon for his testimony, and asked                  
  if there were any questions.                                                 
                                                                               
  REPRESENTATIVE HUDSON questioned Mr. Dixon of the status of                  
  the IBU negotiations.                                                        
                                                                               
  MR. DIXON responded that they appeared to be close to having                 
  something for the members to vote on.                                        
  Number 265                                                                   
                                                                               
                                                                               
  CHAIR FOSTER called Cheri Davis to testify next, and                         
  commented that she was a freshman legislator with him.                       
                                                                               
  Number 270                                                                   
                                                                               
  CHERI DAVIS thanked the committee for the opportunity to                     
  testify, and made  the comment that she was there as a                       
  concerned citizen with regard to the ferry system and other                  
  transportation issues.  She asserted that Tongass Avenue and                 
  the viaduct repairs were crucial projects needing major                      
  work.  She also discussed the desirability of a bypass                       
  route, for emergencies, which could be accomplished by                       
  merely extending a city street.  She concluded by commenting                 
  on the AMHS budget, which she stated was only "barebones",                   
  and that it was particularly critical to the AMHS as it is                   
  in a death spiral since it is not only a major                               
  transportation link, it is an economic benefit for the                       
  region.                                                                      
                                                                               
  Number 300                                                                   
                                                                               
  REPRESENTATIVE DAVIS asked if the Third Avenue Bypass was                    
  part of a comprehensive plan.                                                
                                                                               
  Number 310                                                                   
                                                                               
  MS. DAVIS responded affirmatively.                                           
                                                                               
  Number 325                                                                   
                                                                               
  REPRESENTATIVE DAVIS asked Ms. Davis if there was any                        
  community concern about the implications work on Tongass                     
  Avenue could have regarding destroying the town's historical                 
  character.                                                                   
                                                                               
  Number 332                                                                   
                                                                               
  MS. DAVIS responded that there was some community concern on                 
  that issue, and that a reasonable approach was desired, but                  
  that there was concern with the change in commissioners in                   
  that the current commissioner of DOT/PF had his own ideas.                   
                                                                               
  Number 345                                                                   
                                                                               
  REPRESENTATIVE HUDSON commented on Ms. Davis alluding to the                 
  "death spiral", saying that the Marine Highway fund has                      
  probably done more harm than good because it has given                       
  legislators who know nothing about the AMHS the impression                   
  that it was a fixed, stabilized amount.  He asserted that                    
  the Marine Highway fund would need to be revisited, because                  
  there is no way that the AMHS can get the money to operate                   
  the system.                                                                  
                                                                               
  CHAIR FOSTER asked if there were any other questions.                        
                                                                               
  Number 365                                                                   
                                                                               
  CAPTAIN ED WILLIAMS commented that he had moved into a new                   
  home on Second Avenue in 1937, and right after that they                     
  began clearing to put in Third Avenue.                                       
  KENT MILLER introduced himself as the consulting industrial                  
  economist who prepared the first study of AMHS maintenance                   
  facilities in 1975, in which facility locations in Ketchikan                 
  and Seward were recommended.  He read the following                          
  statement:                                                                   
                                                                               
  "The Ketchikan Shipyard opened for business in 1987.  During                 
  1988, the shipyard's first full year of operation, gross                     
  revenues were approximately $7 million, of which over $3                     
  million was paid in wages to an average of about 60                          
  employees.  Additional goods and services were purchased by                  
  vessels undergoing maintenance by their own crews while                      
  berthed at the shipyard.  Still other goods and services                     
  were purchased by crew members, operators, outside repair                    
  specialists and consultants while their vessels were at the                  
  yard.  Besides such revenues directly and indirectly from                    
  ship repair, most vessel owners using the shipyard saved the                 
  running costs and additional down time which would have been                 
  required to move their vessels to Washington State or                        
  southern British Columbia for service.  Other vessel owners                  
  benefitted from the yard's availability for emergency                        
  repairs.                                                                     
                                                                               
  "About half of the shipyard's 1988 revenues were earned from                 
  repairs to Alaska Marine Highway System vessels, with the                    
  remainder earned from privately owned fishing vessels, tugs                  
  and barges, work boats, and passenger vessels, as well as                    
  U.S. Coast Guard cutters, other government vessels and B.C.                  
  Ferries.                                                                     
                                                                               
  "In 1988, the shipyard's performance exceeded forecasts                      
  prepared during its planning stages.  This performance was                   
  achieved while the yard's facilities were substantially                      
  incomplete, and without productive use of the yard's                         
  undeveloped industrial land.                                                 
                                                                               
  "This track record of the Ketchikan Shipyard corroborates                    
  the community's expectations that the facility would serve                   
  as a significant new source of primary income in Ketchikan's                 
  economy, with widespread benefits to Alaska's maritime                       
  industries.                                                                  
                                                                               
  "Hearing this testimony, you are entitled to ask first, `Can                 
  this be true?'  This information is documented by the                        
  shipyard's operator and by the City of Ketchikan.  The                       
  second question is `What went wrong?'  From my perspective,                  
  the answer to this question is as follows:  In 1979, the                     
  consulting group in which I participated projected                           
  development of a minimum maintenance facility at a cost of                   
  approximately $19 million and a fully developed facility for                 
  about $29 million.  In 1980, $29 million was appropriated                    
  for the shipyard's development.  Following this                              
  appropriation, DOT/PF staff and their consultants prepared a                 
  far more ambitious plan for a $40 million minimum competent                  
  facility and a $56 million optimum ultimate facility.  No                    
  additional funding was obtained for the plan, and in 1984,                   
  after the initial $29 million was either spent or committed                  
  to ambitious civil construction and other improvements, the                  
  DOT/PF advised the City of Ketchikan that the project had                    
  run out of money and could not be completed.  The City then                  
  proposed an alternative completion program, which was funded                 
  and partly completed in 1987.  As a result of this minimum                   
  completion of the shipyard, some of its costly civil works,                  
  such as the caisson wall fronting Tongass Narrows, which                     
  consumed almost half the initial $29 million budget, became                  
  redundant as functional elements of a ship repair yard.                      
  Other completed facilities used project funds for purposes                   
  other than ship repair -- the South Berth was intended for                   
  onboard maintenance, painting, and lay-by for the shipyard -                 
  - it was expensively adapted as an auxiliary ferry terminal.                 
                                                                               
  "At this time, the City of Ketchikan, at the state's                         
  request, leased the shipyard from the state and subleased                    
  its dry dock and other facilities to the first operator.                     
  The city received the state's assurance at this time that                    
  the shipyard physical plant would be completed, but only a                   
  few improvements were ever made.                                             
                                                                               
  "In proposing the development of a publicly owned privately                  
  operated shipyard, the Port of Portland's Swan Island                        
  facilities were used as a model.  On this basis, it was                      
  planned that the public sector would furnish a complete ship                 
  repair yard with all of its essential buildings and fixed                    
  equipment.  The operator was then expected to furnish mobile                 
  and portable equipment and tools.  However, in 1987, the                     
  Ketchikan Shipyard was subleased to its operator as an                       
  incomplete shell, it lacked almost every essential operating                 
  equipment item except for $400 thousand in equipment                         
  furnished by the city.  Moreover, many of its key facilities                 
  such as the main wharf and yard areas were left in an                        
  unusable state.                                                              
                                                                               
  "The first and second shipyard operators attempted to invest                 
  sufficient capital in the shipyard to fill the gap left by                   
  the state.  They were incapable of doing so, partly because                  
  of the size of the required improvements and partly because                  
  of the difficulty in collateralizing fixed improvements to a                 
  publicly owned subleased property.                                           
                                                                               
  "This brings us back to the present and to a third question,                 
  `Will the state fund a useful package of improvements to                     
  enable the shipyard to resume operations?'  I believe the                    
  benefits of such additional investment in the yard are well                  
  demonstrated by its past operations, especially during 1988.                 
                                                                               
  "And finally a fourth question, `Can the state organize the                  
  shipyard in a manner which will ensure new investment                        
  actually benefits its ship repair capability and enables the                 
  yard to serve both the Marine Highway and other customers?'                  
  In 1987, city organization of the shipyard, as an enterprise                 
  department, was an attempt to accomplish this.  Today, under                 
  AS 29.35.600, passed in 1992, the Port Authority Statute,                    
  the state is capable of organizing the shipyard under an                     
  independent operating authority.  Such organization should                   
  be capable of concentrating on the future development and                    
  management of the yard on its intended function, which is                    
  ship repair, and the provision of badly needed industrial                    
  land to ship repair related business.                                        
                                                                               
  "I am confident that if it is sensibly completed and                         
  organized, the Ketchikan Shipyard may still fulfill its                      
  great promise to the growth and development of Ketchikan and                 
  Alaska's maritime industries."                                               
                                                                               
  Number 480                                                                   
                                                                               
  REPRESENTATIVE DAVIS thanked Mr. Miller for his historical                   
  perspective, and commented that the idea of "past promises"                  
  turns up in all sorts of areas, and that this is what the                    
  current legislature is having to deal with.                                  
                                                                               
  Number 500                                                                   
                                                                               
  REPRESENTATIVE HUDSON asked Mr. Dronkert if there has been a                 
  determination of what is needed for completion.                              
                                                                               
  Number 510                                                                   
                                                                               
  MR. DRONKERT responded that in this year's budget, the                       
  figure given is $3.2 million, to bring the facility to the                   
  level that it was understood to have originally been                         
  intended to be at.                                                           
                                                                               
  Number 525                                                                   
                                                                               
  MEREDITH MARSHALL concurred with the above comments                          
  regarding the shipyard and the AMHS.  She commented that she                 
  favored replacement where possible rather than repair of the                 
  viaduct, and that the Third Avenue extension is vital.                       
                                                                               
  TAPE 94-6, SIDE B                                                            
  Number 049                                                                   
                                                                               
  LEIF JENKINSON thanked the committee for the opportunity to                  
  speak, and stated that he had worked on the ferries for 13                   
  years, and was elected last September (indiscernible).  He                   
  stated that forums such as the present one were vital for                    
  people.  He stated that he is an IBU member.  He also made                   
  the comment the DOT/PF's Commissioner Campbell had made no                   
  assurances of maintenance of the existing fleet.  He stated                  
  that there are, in his opinion, serious problems with the                    
  AMHS reservations system, and not due to the equipment, and                  
  that revenue was being lost, particularly in the summer.                     
  Mr. Jenkinson stated that he hoped the new commissioner and                  
  director would listen to the cries from the wilderness.  He                  
  said the drug of choice on the ferries is Xantac, which is a                 
  prescription stomach medication, used because of the high                    
  stress on the job.  He represented himself as standing ready                 
  to help anyone in repairing the relationship between the IBU                 
  and AMHS administration.  He thanked the committee, adding                   
  that the people who work on the ferries believe in the                       
  ferries and want to do their best, contrary, he alleged, to                  
  the perception.                                                              
                                                                               
  Number 200                                                                   
                                                                               
  REPRESENTATIVE HUDSON stated that there is no legislative                    
  policy which precludes the AMHS from making a profit, and                    
  that, in fact, the legislature would love to see the ferries                 
  make a profit.                                                               
                                                                               
  Number 230                                                                   
                                                                               
  REPRESENTATIVE VEZEY stated that he does not hold bad                        
  precedents and doesn't believe what he reads in the papers.                  
                                                                               
  Number 235                                                                   
                                                                               
  MR. JENKINSON stated that he felt there should be as few                     
  problems as possible going to arbitration, but that the                      
  grievances they file don't get satisfactorily answered.  He                  
  stated that he had over 20 grievances on his desk which                      
  added to at least six that were already there.  He said some                 
  of the grievances might be considered minor, but things                      
  can't be solved anymore by phone calls, because he's not                     
  able to call personnel directly; rather, he has to deal with                 
  the state's labor relations analyst -- a third party.  He                    
  alleged that the IBU's contract with the state is one of the                 
  most complicated in existence, and contains some very                        
  strange working conditions, which even he, after so much                     
  time in the system, can't understand.                                        
                                                                               
  Number 300                                                                   
                                                                               
  REPRESENTATIVE WILLIAMS asked Mr. Jenkinson to explain                       
  Xantac and its use on the AMHS.                                              
                                                                               
  Number 305                                                                   
                                                                               
  MR. JENKINSON explained that Xantac is a prescription                        
  medication which reduces stomach acid, and likened it to a                   
  prescription of Rolaids.  He stated that he is on the                        
  medication.                                                                  
                                                                               
  Number 315                                                                   
                                                                               
  REPRESENTATIVE HUDSON stated that one of the problems with                   
  the AMHS is that the system has been taken away from the                     
  managers of the system, particularly in labor relations and                  
  grievances, and contract negotiations.  He asserted that the                 
  right place for contract negotiations, at least in                           
  preliminary procedures, is with the system itself, which has                 
  the best understanding of the system.  He asserted that Mr.                  
  Dronkert would not be the one to initiate any change in                      
  grievance handling, since he works for the DOT/PF, and he                    
  appealed to the committee members, instead, to consider as                   
  legislators, making such a change.                                           
                                                                               
  Number 340                                                                   
                                                                               
  REPRESENTATIVE DAVIS stated that the fat needs to be trimmed                 
  from the top, so that the worker's jobs are spared, while                    
  the excess of chiefs is whittled down.                                       
                                                                               
  Number 365                                                                   
                                                                               
  PHYLLIS YETKA thanked the committee members for coming down,                 
  and for taking interest in the shipyard facility.  She                       
  asserted that it would be a tremendous boost to the                          
  community's economy if the shipyard were operating.  She                     
  echoed the previous comments on the essential nature of the                  
  AMHS to Ketchikan, and the importance of maintaining the                     
  system.  She concluded by again thanking the committee.                      
                                                                               
  Number 383                                                                   
                                                                               
  CHAIR FOSTER made the point that communities need to                         
  establish a rapport with the various departmental                            
  commissioners, and constantly pressure the bureaucracy to                    
  perform.  He stressed the uphill battle involved in trying                   
  to get understanding away from the Anchorage Bowl, as an                     
  example.                                                                     
                                                                               
  Number 403                                                                   
                                                                               
  CAPTAIN ED WILLIAMS identified himself as being retired, in                  
  1993, from the AMHS after 30 years and 30 days of service.                   
  He asserted that more service from Prince of Wales Island is                 
  needed.  He also commented that the shipyard won't keep                      
  operating with just AMHS vessels; rather, it needs to be                     
  equipped to handle other vessels, and perhaps be outfitted                   
  with a small store for them to buy their basics, so that                     
  they can work on their own vessels.                                          
                                                                               
  Number 440                                                                   
                                                                               
  REPRESENTATIVE HUDSON asked if there would be a conflict                     
  with private enterprise if the state would expand the                        
  shipyard facility in the manner which Captain Williams had                   
  suggested.                                                                   
                                                                               
  Number 451                                                                   
                                                                               
  CAPTAIN WILLIAMS responded that he didn't think there were                   
  any existing businesses which would be affected by something                 
  like this.                                                                   
                                                                               
  Number 457                                                                   
                                                                               
  REPRESENTATIVE HUDSON added that this would be something                     
  worth looking into.                                                          
                                                                               
  Number 468                                                                   
                                                                               
  REPRESENTATIVE HUDSON asked Captain Williams what he thought                 
  of the suggestions that the Aurora or LeConte be stretched.                  
                                                                               
  Number 471                                                                   
                                                                               
  CAPTAIN WILLIAMS responded that he didn't think the idea was                 
  a very good one, adding that the only one not messed with                    
  was the Taku and it's the best one to handle groups, in                      
  fact, the best one in the fleet.                                             
                                                                               
  Number 482                                                                   
                                                                               
  REPRESENTATIVE DAVIS stated that he would like to see these                  
  ideas implemented, but wondered if it shouldn't first be                     
  attempted at the private level.  He asserted that the first                  
  question asked should always be, "Can private enterprise                     
  handle it?"                                                                  
                                                                               
  TAPE 94-7, SIDE A                                                            
  Number 015                                                                   
                                                                               
  REPRESENTATIVE HUDSON commented that Alaska Industrial                       
  Development and Export Association (AIDEA) has looked at the                 
  situation, and is considering whether to use some of their                   
  money to purchase or operate.  He asked Mr. Dronkert if he                   
  had a copy of that report.                                                   
                                                                               
  Number 025                                                                   
                                                                               
  MR. DRONKERT responded that he had prepared the report for                   
  AIDEA as a contractor, and had incorporated the concept in                   
  the report.                                                                  
                                                                               
  Number 033                                                                   
                                                                               
  WILLIAM SHERMAN concurred with the ideas of previous                         
  speakers, and asserted how critical it was that the money                    
  being used for maintenance be guarded.                                       
                                                                               
  Number 041                                                                   
                                                                               
  C. L. CHESHIRE identified himself as the manager of the                      
  Economic Development Center.  He distributed a 46 page                       
  handout entitled "Ketchikan Gateway Borough Economic                         
  Indicators," published May, 1993, by the University of                       
  Alaska - Southeast, Ketchikan campus, under a grant from the                 
  Ketchikan Overall Economic Development Program (copies may                   
  be obtained by calling 907-225-6171), and asserted that the                  
  shipyard is a critical element in the diversification of the                 
  Ketchikan economy.                                                           
                                                                               
  Number 138                                                                   
                                                                               
  REPRESENTATIVE DAVIS made the comment that there are                         
  attempts to close things down which are also getting in the                  
  way of diversification of the economy.                                       
                                                                               
  Number 149                                                                   
                                                                               
  MR. CHESHIRE stated that, as long as we are separated by                     
  bodies of water, most industries will be dependant on                        
  waterborne freight and trafficking.  And if that's a                         
  certainty, so too will marine maintenance be a certainty.                    
                                                                               
  Number 157                                                                   
                                                                               
  BRUCE CHAPMAN identified himself as a 21 year resident of                    
  Alaska and Ketchikan.  He welcomed the committee and Mr.                     
  Dronkert, and stated that he had worked on the ferry system                  
  as a deck hand for 14 years.  He wished to address the issue                 
  of cutting the operations budget for the AMHS, making the                    
  point that a cut in the DOT/PF budget would go directly to                   
  the AMHS.  He added that he concurred with all of the                        
  previous testimony, and asserted that there is the need for                  
  a consistent schedule for Prince of Wales Islands.  He                       
  commented that the idea of a "fast ferry" for Prince of                      
  Wales probably wouldn't work, in that it wouldn't be able to                 
  handle the vehicular or passenger traffic, or the weather.                   
  He concluded by stating that maintenance is an issue to be                   
  considered in budget cuts.                                                   
                                                                               
  Number 300                                                                   
                                                                               
  REPRESENTATIVE WILLIAMS commented that the legislature does                  
  understand the maintenance issue, and that he had mentioned                  
  the concern to the co-chair of the House Finance Committee.                  
                                                                               
  Number 325                                                                   
                                                                               
  MS. DAVIS stated that an "around the island" trip of the                     
  past, on the ferry, was a real morale booster.                               
                                                                               
  Number 331                                                                   
                                                                               
  JOHN PETERSON, President, Ketchikan Chamber of Commerce,                     
  stated that the Ketchikan Chamber of Commerce supports the                   
  effort to get the shipyard on its feet.  He mentioned two                    
  difficult issues.  The first was the fact that the facility                  
  was developed by state government, without the normal supply                 
  and demand relationship.  He asserted that there needs to be                 
  a way to make the place function without unduly subsidizing                  
  it.  He also expressed concern that cuts within the AMHS,                    
  especially in operations and maintenance, will start eroding                 
  the passenger base -- the "death spiral" referred to by                      
  previous speakers.  He expressed enthusiasm with Mr.                         
  Dronkert's directorship, given Mr. Dronkert's rounded                        
  experience base.  Mr. Peterson also discussed the Tongass                    
  Avenue issue.                                                                
                                                                               
  Number 500                                                                   
                                                                               
  REPRESENTATIVE HUDSON asked Mr. Peterson what the cost                       
  estimate was for the Third Avenue extension.                                 
                                                                               
  Number 505                                                                   
                                                                               
  MR. PETERSON estimated it to be between $10-20 million, and                  
  that they were looking for federal highway dollars.                          
                                                                               
  Number 510                                                                   
                                                                               
  REPRESENTATIVE HUDSON asked what the cost estimate was for                   
  the Tongass Avenue project.                                                  
                                                                               
  Number 512                                                                   
                                                                               
  MR. PETERSON responded that the project was estimated at $70                 
  million back when they were talking about totally replacing                  
  the viaduct.                                                                 
                                                                               
  TAPE 94-7, SIDE B                                                            
  Number 020                                                                   
                                                                               
  ERIK NELSON stated that he was concerned about the Murphy                    
  Seaplane float facility which was promised in 1992, and                      
  wondered if it was still going to take place.                                
                                                                               
  Number 026                                                                   
                                                                               
  CHAIR FOSTER stated that he did not know, but that he would                  
  find out and contact Mr. Nelson either directly or through                   
  DOT/PF.                                                                      
                                                                               
  Number 054                                                                   
                                                                               
  ROLLO E. BRAY stated that he was 68 years old, and had been                  
  in Ketchikan since the ferries started.  He asserted that he                 
  was concerned about older/hostel people from "outside"                       
  getting ferry priorities over old timers like himself who                    
  were born and raised in Alaska and pay taxes here.                           
                                                                               
  Number 200                                                                   
                                                                               
  JUDITH JENKINSON stated that she wouldn't be able to testify                 
  any better than her husband had, but that, as a city council                 
  member, she had a different perspective.  She thanked the                    
  committee members for their presence, and asserted that it                   
  may be time to start thinking about other ways to finance                    
  things in Alaska considering that the oil days may be behind                 
  us, and people still need services.  She likened the marine                  
  highway to any other highway in the state of Alaska, and                     
  commented that the other highways aren't expected to pay                     
  their own way, so why should the marine highway be expected                  
  to do so?  She asked the legislators to please think about                   
  this.  She also alleged that the AMHS reservation system is                  
  a real problem.                                                              
                                                                               
  Number 475                                                                   
                                                                               
  HANK NEWHOUSE concurred with previous testifiers with regard                 
  to the shipyard, emphasizing that it is a key component in                   
  Ketchikan's economy.  He also stated that people need a                      
  place where they can take care of their vessels.  He                         
  predicted that Air Marine will probably be shut down any day                 
  by the Environmental Protection Agency (EPA), and that it                    
  may even end up as a Superfund site.  He asserted that a                     
  cutting-edge facility is necessary to meet EPA's                             
  requirements.                                                                
                                                                               
  TAPE 94-8, SIDE A                                                            
  Number 013                                                                   
                                                                               
  MR. NEWHOUSE concluded by stressing the need for the                         
  Ketchikan Shipyard facility to be developed completely.                      
                                                                               
  Number 068                                                                   
                                                                               
  JOHN RITTERBACH introduced himself as a purser for the AMHS,                 
  and stated that he also has to take Xantac for his stomach                   
  problems.  He concurred with previous testimony regarding                    
  the shipyard and AMHS funding.                                               
                                                                               
  Number 176                                                                   
                                                                               
  MAYOR JIM CARLTON thanked the committee and staff for                        
  traveling to Ketchikan, and expressed appreciation that they                 
  had toured the shipyard.  He asserted that Ketchikan is                      
  unique, and has been used by Governor Hickel, as an example,                 
  of a community he wishes many others were like.  Mayor                       
  Carlton stated that he intended to do all he could to try                    
  and lift up morale and maintain a positive image.  He added                  
  that Ty-Matt, Inc., is a top quality, A-1 outfit, with a                     
  very positive reputation in Southeast Alaska and Washington.                 
  He stated that he felt Commissioner Campbell wasn't much                     
  help, and that he needed help in communicating with the                      
  commissioner.                                                                
                                                                               
  Number 225                                                                   
                                                                               
  CHAIR FOSTER thanked the mayor for speaking.                                 
                                                                               
  Number 239                                                                   
                                                                               
  MIKE DIXON commented that the ferries must be given back to                  
  the people, referencing trips to Misty Fjords.                               
                                                                               
  Number 278                                                                   
                                                                               
  LEIF JENKINSON restated and concurred with previous                          
  testimony.                                                                   
                                                                               
  Number 380                                                                   
                                                                               
  CHAIR FOSTER asked Mr. Dronkert to comment on the day's                      
  testimony.                                                                   
                                                                               
  Number 400                                                                   
  GREGORY DRONKERT, Director, Alaska Marine Highway System,                    
  Department of Transportation and Public Facilities, thanked                  
  Chair Foster and stated that he hadn't come to Ketchikan to                  
  push his agenda, rather, he appreciated the opportunity to                   
  get a feel for the concerns of those involved.  He made the                  
  point that many of the issues and concerns were                              
  contradictory, but that some were complementary, and that he                 
  planned to focus on the ones which were complementary.  He                   
  asserted that utilization of assets was one of the biggest                   
  issues.  He cautioned that he would not make promises which                  
  he couldn't keep, but that he would promise to look at the                   
  issues and prioritize them.  He pledged to do everything in                  
  his power to address the issues.  He stated that,                            
  conceptually, the new management team was aware of the                       
  concerns of labor, and that the present input and                            
  communication was quite helpful.  He concluded by expressing                 
  disappointment at not being at the negotiating table.                        
                                                                               
  Number 450                                                                   
                                                                               
  REPRESENTATIVE WILLIAMS expressed appreciation to Mr.                        
  Dronkert and the committee for attending.                                    
                                                                               
  Number 485                                                                   
                                                                               
  CHAIR FOSTER thanked the community for its hospitality, and                  
  recalled being in Ketchikan for the first time six years                     
  ago, when he was stranded there because of bad flying.  He                   
  remarked that the people were very friendly then also.                       
                                                                               
  Number 495                                                                   
                                                                               
  REPRESENTATIVE DAVIS stated that it was a pleasure to be in                  
  Ketchikan, and that he was happy to see so many people                       
  testify.  He commented that Ketchikan has been well                          
  represented in Juneau, both by Cheri Davis, in the past, and                 
  Representative Williams during the current session.  He                      
  added that, as a former mayor, he became well acquainted                     
  with Mayor Stanton.  He concluded by stating that Ketchikan                  
  issues are not overlooked at the Capitol, and that the                       
  Ketchikan contingency visits to Juneau are valuable.                         
                                                                               
  Number 525                                                                   
                                                                               
  REPRESENTATIVE VEZEY made the observation that there weren't                 
  too many problems expressed in the meeting that couldn't be                  
  solved with money.  One of the problems, as he saw it, was                   
  the generation of new sources of wealth, since there                         
  currently wasn't much money available.  He asserted that the                 
  only way to generate new sources of revenue was through the                  
  development of resources.                                                    
                                                                               
  Number 543                                                                   
                                                                               
  REPRESENTATIVE HUDSON added that he wished to thank the                      
  people of Ketchikan who supported and helped place the Frank                 
  Initiative on the ballot.                                                    
                                                                               
  Number 549                                                                   
                                                                               
  CHERI DAVIS expressed appreciation to Chair Foster for                       
  allowing her to sit with the committee, and lauded him for                   
  his unfailing support of the AMHS, finding it especially                     
  noteworthy considering his origins in Nome, where there is                   
  no ferry service.  She also commented on the restructuring                   
  taking place in the National Guard which seems to be                         
  centered around having more focus on Anchorage.  She                         
  suggested that perhaps the Military and Veteran's Affairs                    
  Committee keep their ears open on this issue.                                
                                                                               
  Number 579                                                                   
                                                                               
  CHAIR FOSTER adjourned at 6:30 p.m.                                          

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