Legislature(2007 - 2008)Ketchikan
08/21/2007 10:00 AM House TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| Transportation Issues Between Alaska and Canada | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE TRANSPORTATION STANDING COMMITTEE
Ketchikan, Alaska
August 21, 2007
10:07 a.m.
MEMBERS PRESENT
Representative Kyle Johansen, Chair
Representative Mark Neuman, Vice-Chair
Representative Mike Doogan
Representative Craig Johnson
Representative Woodie Salmon
MEMBERS ABSENT
Representative Anna Fairclough
Representative Vic Kohring
COMMITTEE CALENDAR
TRANSPORTATION ISSUES BETWEEN ALASKA AND CANADA
PREVIOUS COMMITTEE ACTION
No previous action to report
WITNESS REGISTER
JOE WILLIAMS, Mayor
City of Saxman;
Mayor, Ketchikan Gateway Borough
Saxman, Alaska
POSITION STATEMENT: Supported daily transportation service
between Ketchikan, Alaska, and Prince Rupert, British Columbia.
HERB POND, Mayor
City of Prince Rupert
Prince Rupert, British Columbia, Canada
POSITION STATEMENT: Supported daily transportation service
between Ketchikan, Alaska, and Prince Rupert, British Columbia.
BOB WEINSTEIN, Mayor
City of Ketchikan
Ketchikan, Alaska
POSITION STATEMENT: Supported daily transportation service
between Ketchikan, Alaska, and Prince Rupert, British Columbia.
VICTOR WELLINGTON, Mayor
City of Metlakatla
Metlakatla, Alaska
ACTION NARRATIVE: Expressed his hope that this meeting creates
positive momentum regarding transportation service.
DAVE MACDONALD, Mayor
District of Port Edwards
Port Edwards, British Columbia, Canada
POSITION STATEMENT: Stated that the Prince Rupert harbor will
help several communities.
CHARLIE FREEMAN, Vice-Mayor
City of Ketchikan
Ketchikan, Alaska
POSITION STATEMENT: Welcomed participants.
JERRY REESE, Chief
British Columbia, Canada
POSITION STATEMENT: Supported transportation service between
Ketchikan, Alaska, and Prince Rupert, British Columbia.
JIM VANHORN, Staff
to Senator Bert Stedman
Juneau, Alaska
POSITION STATEMENT: [Comment indiscernible.]
BILL WILLIAMS
Ketchikan, Alaska
POSITION STATEMENT: Welcomed participants.
RUSSELL KELLY, Legislative Liaison
Office of the Governor
Juneau, Alaska
POSITION STATEMENT: Stated many changes are taking place in the
Department of Transportation & Public Facilities (DOT&PF).
CATHIE ROEMMICH, Chair
Marine Transportation Advisory Board (MTAB)
Juneau, Alaska
POSITION STATEMENT: Said she hopes this meeting enhances
communications with DOT&PF.
JOHN (JC) CONLEY
Marine Transportation Advisory Board (MTAB)
Ketchikan, Alaska
POSITION STATEMENT: Supported transportation service between
Ketchikan, Alaska, and Prince Rupert, British Columbia.
GEORGE CAPACCI, Captain, Vice President
Fleet Operations
British Columbia Ferry Services, Inc. ("BC Ferries")
(No address provided)
POSITION STATEMENT: Stated that a goal of BC Ferries is to
build a joint port facility that the Alaska Marine Highway
System (AMHS) could make use of.
BRUCE JONES, General Manager
Inter-Island Ferry Authority (IFA)
Craig, Alaska
POSITION STATEMENT: Called [transportation service between
Ketchikan and Prince Rupert] an exciting concept.
RUDY BRUEGGEMANN, Political and Economic Relations Officer
Canadian Consulate
Anchorage, Alaska
POSITION STATEMENT: Stated he is at this meeting to help people
understand the issues and listen to what they have to say.
DENNIS HARDY, Deputy Commissioner of Marine Operations
Marine Highway System (AMHS)
Department of Transportation & Public Facilities (DOT&PF)
Juneau, Alaska
POSITION STATEMENT: Stated he is at this meeting to listen.
JOHN FALVEY, Captain, General Manager
Marine Highway System (AMHS)
Alaska Department of Transportation & Public Facilities (DOT&PF)
Ketchikan, Alaska
POSITION STATEMENT: Stated that planning for a southern gateway
shuttle was reinstated in 2007, but there is no funding at this
time to build the shuttle.
KENT MILLER
Ketchikan, Alaska
POSITION STATEMENT: Presented a private sector option for
passenger and vehicle ferry service between Ketchikan and Prince
Rupert.
ACTION NARRATIVE
CHAIR KYLE JOHANSEN called the House Transportation Standing
Committee meeting to order at 10:07:29 AM. Representatives
Neuman, Doogan, and Johansen were present at the call to order.
Representatives Salmon and Johnson arrived as the meeting was in
progress. Senator Stedman was also present.
^TRANSPORTATION ISSUES BETWEEN ALASKA AND CANADA
10:08:08 AM
CHAIR JOHANSEN announced that Mayor Williams asked the House
Transportation Committee to act as the vehicle to get the issue
of connecting Ketchikan and British Columbia "on the table." He
has been contacted by officials from Hyder about the same issue.
Representatives Johnson, Neuman, Doogan, Salmon, and Johansen
were present at the call to order. Representative Johansen
asked participants at the meeting to introduce themselves.
10:09:14 AM
Participants introduced themselves as follows: Mayor Joe
Williams, Ketchikan Gateway Borough and the City of Saxman;
Mayor Dave MacDonald, District of Port Edwards, British
Columbia; Rudy Brueggemann, Political and Economic Relations
Officer, Anchorage; Captain John Falvey, General Manager, Alaska
Marine Highway System; Bruce Jones, General Manager, Inter-
Island Ferry Authority; Chief Jerry Reese, British Columbia;
Captain George Capacci, Vice President of Fleet Operations, BC
Ferries; Dennis Hardy, Deputy Commissioner of Transportation;
Russ Kelly, Special Assistant to Governor Palin; Mayor Bob
Weinstein, City of Ketchikan; Mayor Herb Pond, City of Prince
Rupert; Mayor Victor Wellington, Metlakatla; Sol Atkinson,
Transportation Director, Metlakatla; John (JC) Conley, Marine
Transportation Advisory Board; Cathie Roemmich; Kent Miller,
private industrial economist, Ketchikan; Charlie Freeman, Vice-
Mayor, City of Ketchikan; Jim VanHorn, Staff to Senator Bert
Stedman; Pete Ecklund, Staff to Representative Kevin Meyer;
[remainder of introductions indiscernible].
10:12:38 AM
CHAIR JOHANSEN thanked all participants for coming and said this
topic is extremely important to him. Prince Rupert has always
been an important connection to Ketchikan. He believes for the
health of the economies of both communities, a good plan or
schedule is necessary to move people and goods back and forth.
His intent is to bring this issue to the table and "see where
people are coming from." The committee has no predisposed plan
nor will it be making any decisions; this meeting is strictly a
brainstorming session. He plans to follow up with a meeting in
Juneau during the next session. He commented that the Alaska
Marine Highway System (AMHS) is aging so its replacement or a
new system needs to be contemplated and brought before the
legislature because any plan will need statewide support.
10:15:28 AM
JOE WILLIAMS, Mayor, City of Saxman, and Mayor, Ketchikan
Gateway Borough, performed a traditional tribal welcome "to his
father's people's land" by singing a song and explained that
down feathers are simultaneously thrown in the air and land on
people as a sign of welcome. Mayor Williams then sang another
song for members.
MAYOR WILLIAMS thanked everyone for attending. He noted that he
and Mayor Pond have been talking about organizing this meeting
for over a year. Mayor Pond had invited Borough officials to
attend a meeting in Prince Rupert in October of last year. The
Ketchikan officials had to charter a plane to get there at a
cost of $1100. The distance is 90 miles. Mayor Pond then
traveled to Ketchikan but his route was through Vancouver and
Seattle. Mayor Williams said he and Mayor Pond visited over
th
July 4 and discussed organizing a House Transportation Standing
Committee meeting. He and Mayor Pond desire to get daily
transportation service between Ketchikan and Prince Rupert. He
told members that Prince Rupert is developing a deep water port,
which will benefit Ketchikan and Metlakatla, as well as other
Southeast Alaska towns. He said daily service to Prince Rupert
will provide further services.
10:23:09 AM
HERB POND, Mayor, City of Prince Rupert, told members that
although he will refer to Prince Rupert in his presentation, he
is speaking about an entire territory. He introduced Chief
Jerry Reese and pointed out that Prince Rupert is in the heart
of Tsimshian territory. He referred to an historical photo of a
British Columbia (BC) ferry assisting an Alaskan ferry that hit
a rock and another photo of the first annual Prince Rupert-
Ketchikan baseball tournament in 1912, a lively event. He
thought the baseball photo was significant in that logging did
not even begin in the area until 1907. He pointed out that
Ketchikan is the closest community to Prince Rupert that is
similar in size, yet transportation between the two communities
is very limited. Mayor Pond told members:
I'm just tickled by all of the people that have come here.
When I saw the invitation list and who had agreed from the
Alaska side, I was extremely impressed. When I saw who
from [indisc.] side, just immediately signed up and
indicated they wanted to be here and were prepared to
switch their schedules around, I was equally impressed, and
I want to thank each and every one of you for making this
happen. The Tsimshian have a word, which is kind of an all
inclusive word, and Gary can correct me and also these
gentlemen can correct me, but it's "wy wat" (ph) and it's
often said at the end of something. It basically is a
catch-all that says let's do it, let's make it happen. So
I hope at the end of this meeting that we gathered today
that we're able to say wy wat and let's make something
happen.
10:28:43 AM
BOB WEINSTEIN, Mayor, City of Ketchikan, welcomed everyone to
the meeting and said the transportation issue between the two
communities has been of great importance to him. He has been an
advocate of daily service for many years. He said he was very
elated several years ago when $27 million was allocated for a
gateway shuttle, but was equally disappointed when the money was
taken away. He said, "Our job is to regroup and come up with a
good option to do what our communities have been trying to do
for many years, and that not only includes trying to establish a
good transportation link between our communities but also to
improve our business [indisc....]"
10:30:18 AM
VICTOR WELLINGTON, Mayor, City of Metlakatla, told members one
reason he came to this meeting is that he sat with the mayor of
Prince Rupert in Juneau a few years ago and talked about
transportation. Road construction is underway on a road between
Metlakatla and [Ketchikan]. He is very excited about what he is
hearing about transportation. Metlakatla is a Tsimshian
community; he and other members of the community have many
relatives in [northern Canada]. He relayed that his staff, Sol
Atkinson, addresses transportation issues. He said he hopes the
meeting creates some positive momentum.
10:33:17 AM
DAVE MACDONALD, Mayor, District of Port Edwards, said the Prince
Rupert harbor will help several communities. He is excited to
be present and is looking forward to the discussions.
10:33:57 AM
CHARLIE FREEMAN, Vice-Mayor, City of Ketchikan, welcomed all
participants.
10:34:39 AM
JERRY REESE, Chief, said he was involved with the City of Prince
Rupert a number of years back. His community and the community
of Metlakatla got together and talked about creating a link to
Prince Rupert. They lobbied Ottawa; his goal was to do a road
upgrade at that time. His community runs a ferry service from
[indisc.] Inlet to Prince Rupert at a deficit every year. He
sees this link as a huge opportunity for his community and
Metlakatla. It would open up tourism in his community and in
the Tsimshian Peninsula. He said there are discussions about
building a ferry landing in his community to shorten the run
from Alaska. He noted a bridge between [indisc.] and Prince
Rupert has been discussed but that may never happen because of
the cost. He said he used to come to Metlakatla to play
basketball when he was younger. He has relatives in Metlakatla.
10:38:06 AM
CHAIR JOHANSEN announced that Representatives Salmon and Johnson
had joined the meeting via teleconference. He informed the
representatives that participants are going around the room
introducing themselves.
10:38:28 AM
JIM VANHORN, Staff to Senator Bert Stedman, [Mr. VanHorn's
comment was indiscernible.]
10:40:08 AM
CHAIR JOHANSEN said this effort should dovetail with Senator
Stedman's efforts in the Senate Finance Committee and that he
would talk to the Department of Transportation & Public
Facilities (DOT&PF) about reviewing the statutory obligations
for its Alaska Marine Highway System (AMHS) plans.
10:40:39 AM
BILL WILLIAMS, a former representative in the Alaska State
Legislature, welcomed everyone to Ketchikan. [The remainder of
his comment was indiscernible.]
10:42:42 AM
RUSSELL KELLY, Legislative Liaison, Office of the Governor, said
he was glad to be attending the meeting and that many changes
are taking place in DOT&PF. The governor is hoping for improved
communication and is interested in innovative ideas. [The
remainder of his comment was indiscernible.]
10:44:32 AM
CATHIE ROEMMICH, Chair, Marine Transportation Advisory Board
(MTAB), said she hopes to come out of the meeting today with
more information and enhanced communications with DOT&PF.
JOHN (JC) CONLEY, Marine Transportation Advisory Board (MTAB),
said it is good to see friends from Prince Rupert. He noted a
daily shuttle has been discussed for a long time as well as the
declining relationship with Prince Rupert. He believes a
convergence is occurring. Prince Rupert has a world class mega-
port that has opened the world up to Alaskan products. It is
connected to Asia and the Midwest. Southeast has some resources
that can only be sent to another market for processing. Another
opportunity Southeast Alaska has with its British Columbian
neighbors is to create a power grid. That will eventually
create affordable energy and a good transportation link, the two
necessary components of economic development and a link to Asia
and the Midwest. This partnership will create a win/win
situation. He hopes the Legislature will give the Alaska Marine
Highway System the funds needed to get a ferry built. He
stated:
We should be running a ferry out of Prince Rupert, into
Ketchikan, up to South Mitkof - remember that George -
grabbing the fish at South Mitkof, coming back to
Ketchikan, grabbing some more fish and going to Prince
Rupert and now we've got a mega port. You can pick your
market - left or right - Asia or Chicago. This has
changed. I applaud your efforts, Mr. Chairman, and I'd
like to thank Mayor Williams and Mayor Pond. But it's
going to require your leadership to ensure that we have a
plan to succeed. This might be a harsh comment but having
been around the competition of roads and ferries, I think a
lot of times there's a desire that the plan fail. That's
why they were always talking about building new boats but
not building them. Thank you.
10:48:30 AM
GEORGE CAPACCI, Captain, Vice President, Fleet Operations,
British Columbia Ferry Services, Inc., said one of the goals of
the ferry systems throughout northwestern America is to address
the challenge of aging infrastructure, both boats and terminals.
British Columbia Ferry Services ("BC Ferries") is rebuilding its
fleet and it is embarking on a major capital investment program
to build a small and intermediate sized fleet. Another
challenge to creating transportation links is providing
infrastructure on shore. A goal of BC Ferries is to build a
joint port facility that the Alaska Marine Highway System could
make use of.
10:50:27 AM
BRUCE JONES, General Manager, Inter-Island Ferry Authority
(IFA), said he has only been at his current job for three weeks
but was on the board of the Southeast Conference for a few
years, during which time this exciting concept was discussed.
IFA is governed by a board of directors. [The remainder of his
testimony was indiscernible.]
RUDY BRUEGGEMANN stated that he is here to help people
understand how the issues work and to listen to what people have
to say. [The remainder of his testimony was indiscernible.]
10:52:19 AM
DENNIS HARDY, Deputy Commissioner of Marine Operations, Marine
Highway System, Department of Transportation & Public Facilities
(DOT&PF), said DOT&PF's goal is to run the boats, but the fleet
is aging and something needs to be done budget-wise to help. He
said he is here to listen.
CHAIR JOHANSEN said one reason he scheduled this meeting is to
decide what to do, and develop an airtight case to make it
easier to sell at a statewide level. He related that Mayor
Williams and Mayor Pond want to get this started now and move
forward with a plan.
10:55:01 AM
[Witness name and comments indiscernible.]
10:55:36 AM
MAYOR WILLIAMS commented that if everyone is serious about
having daily service between Ketchikan and Prince Rupert, it is
time to do it. It is the only means of economic development for
Ketchikan. He noted Mayor Pond's 12 hour trip to Ketchikan from
Prince Rupert and that no one else would make that trip because
of the cost and time. He wants to see the daily shuttle become
a reality because with the development of a deep water port in
Prince Rupert, the shuttle will only benefit southern Southeast
Alaska. He thanked Chair Johansen for holding the meeting and
thanked all participants for attending.
10:57:47 AM
MAYOR POND stated the following during his PowerPoint
presentation:
All of us in the room are aware of the Southeast
Conference, the great organization that it is and the
incredible work that it achieves. But I think sometimes we
forget about the origins of the Southeast Conference and
that Prince Rupert indeed was a charter member of Southeast
Conference. As the governor of Alaska and the premiere of
British Columbia in the day decided that it would be very
important to link our countries with a ferry network. The
premiere of British Columbia committed to extending ferry
service into Prince Rupert and the governor of Alaska
committed to extending ferry service down to Prince Rupert
and the Southeast Conference was formed around that. To
this day, it is what it is and has had the impact that it
has.
I want to suggest to you today that had those decisions not
been made, that we would have all the reason today to do it
again - that if we were to enter into this world today and
there wasn't linkage back and forth between our countries
and our communities at this level, that we would be
gathering here today to talk about why we should be because
there's opportunities for both of us.
I happen to have a picture which my buddy [indisc.] pulled
up for me and I sure appreciate that. He obviously
understands where my heartstrings are at. I don't expect
you to see it very clearly but this is pulled off the web
... because these are the cranes arriving in Prince Rupert
last night. Three large cranes coming all the way from
China on a special vessel designed to carry this sort of
load. It's kind of hard to get it when you look at these
things, but our [indisc.] Hotel in Prince Rupert is a 14
story structure. These cranes will dwarf that 14 story
hotel. ... It gives you a sense of what it is that we're
talking about in Prince Rupert and really why this matters
to Alaska. In my view there [are] two reasons - JC hit it
well.
One is the development of a trade corridor that is going to
open up opportunities for the movement of goods and the
movement of resources and the connecting of business in a
new way. Business is shifting around the world and some of
us have been a little slow to catch it. We all have a view
of this shirt having been made in China and shipped to a
shelf at Wal-Mart where I bought it. That's kind of the
way that [indisc.] really works. But the reality is that
it's much more complex. The reality is that the cotton
that went into this shirt actually came out of Memphis.
One of the big partners that Prince Rupert has in this
addition is Memphis, Tennessee, because they're going to be
loading cotton into containers that will float back to Asia
through Prince Rupert. So the cotton came from Memphis and
it goes to China and it goes to a particular community in
China where they weave it into thread and then load
containers full of thread to move it to yet another
community that specializes in the weaving of the cloth.
And then load the cloth into containers again to be moved
to yet another community that specializes in the cutting
and sewing and creating the shirt.
Meanwhile, containers of buttons have come from Indonesia
where they are taking petroleum byproducts and forming the
buttons and they will be joined to the shirts to be put in
the containers to be shipped back through Prince Rupert to
Chicago where they will be distributed into the heartland
of the United States and put on store shelves.
Your cell phone is made that way. Your car is made that
way. It is no longer a single assembly line. It is a
world of interconnected specialization and raw resources
and if you aren't on the corridor, you are not in that
trade group, you are not in that economy. It's just that
simple. So - want to give a map for context, we always
talk about how close we are, but here we are. There's this
tiny little bit of open water that separates us and is a
rather artificial boundary. Certainly from a First Nations
or Native development point of view, a very artificial
boundary that was put on there and we're that close
together....
11:03:04 AM
This is Prince Rupert, Port Edwards' population, about
15,000 in the immediate service area when you include the
Tsimshian communities, 22,000. If you go out and include
the Charlottes and the larger area, 66,000, and you keep on
going. This is what we're all talking about and the reason
I'm doing this for you today is if I could take you to
Prince Rupert I wouldn't have to do this presentation. I
just want to give you a little taste of what you may not
have seen in a little while.
This is the community of Prince Rupert, very much like
Ketchikan. It is sandwiched between the mountains and the
ocean. It sits up here. The rail bed that goes out into
the North American marketplace, straight out of here and
actually the most preferable grade through the Rockies
anywhere on the West Coast of North America, comes through
here. And then this is the terminal that's being
converted, or largely has been converted, it's a rather old
photo, into that facility. This is an artist's mock up of
what it's going to be when it's up and running but the
cranes, as you see over here, it's almost entirely
intermodal. In other words, one of the reasons people said
this container port would not work is we don't have much of
a local market. You bring containers into Seattle or
Vancouver or Long Beach and 30 to 40 percent of the
containers are for local destinations in that marketplace
and the others move on through. People said the reason we
[indisc.] is because don't have a local marketplace.
What's happened over the last decade is the local
marketplace is actually so congested, Seattle, Vancouver,
and Long Beach and other places, the communities located
around those container ports are saying we don't want
anymore trucks or trains coming through our communities.
The mayor of Delta in Vancouver, where there is a container
port is one of my greatest allies. She says I don't want
one more container coming into my community. Will you
please send them to Prince Rupert? That's what's happening
down in those communities. This is largely intermodal.
Containers dock and within hours it's put on a crane and
it's gone.
11:06:06 AM
Phase 1 is half a million TEU. If you talk about
containers, some of you are in the shipping business and
this is like the whole [indisc.] here, but a TEU is a
twenty foot equivalent unit. That's how containers started
- in 20 foot units. Now there are a number of sizes and
not very many are 20 feet actually, but they still measure
the capacity of vessels in 20 foot equivalent units. So
we'll be half a million TEUs in the beginning, which is
nice but, quite frankly, it's rather small on a world
scale. Phase 2 will take us up to 1.5, a little over, 1.5
- they think they can squeeze more out of it. That takes
us up roughly to the capacity of the four container ports
in Vancouver today to give you a sense of the scale.
There's an opportunity for a terminal too, which would be a
whole other container area within the harbor of Prince
Rupert, which would take us into considerably larger volume
for that. And this is what it's all about. When you stare
at the maps you don't get it. When you stare at the globe
you do.
Here's Chicago. Here's the Prince Rupert - Ketchikan area.
There's Asia. If you take a string and dangle it over a
map between Korea, between China, between India and
Chicago, Memphis, any of those major hubs back there, you
watch where that string rolls when you [indisc.] and it
does not roll over LA and it doesn't even roll over
Vancouver. It rolls up North, up here. This is the
shortest possible route between those - shaving days off of
ships [indisc.] and here is a graphic of exactly that, the
red being Prince Rupert and the shipping times between
these various ports, Singapore, Hong Kong, and the point is
clear. This is the shortest possible shipping route.
That has generated other activities in our community. As
you well know, the story of Rupert and Ketchikan are just
so similar. We went through the closure of our pulp mill
for slightly different reasons but we suffered the downturn
that you suffered and I would argue that our downturn was
longer and deeper and more substantial. As the mayor of a
community and dealing with the social side of that and
dealing with families and people literally crying in my
office asking me if now is the time to leave - it was
really, really tough. This turnaround is bringing life
into our community at all kinds of levels. We're seeing
investments in our community from literally all over the
world. People are arriving everyday with millions of
dollars looking for investment opportunities within the
community of Prince Rupert and the surrounding areas. One
of those investment companies is actually represented here
today and that is a gaming center or a casino that's now
about a $15 million build. For those of you that know the
Crest Hotel, it sits right beside the Crest Hotel, one of
the few casinos in the world that's going to have a
gorgeous water view out over the harbor with incredible
facilities so it's under construction. These pictures
don't do it justice but come in a month and you'll get to
see it properly....
It's attracted investors out of Calgary who want to do some
big box format retail development. They've acquired some
land. This is the schematic. They are going to probably be
scratching toward the end of this year and so we're pretty
excited about that investment.
We're seeing new residential construction. In Prince
Rupert the only houses that have been built in the last
decade are houses that were custom built for somebody who
was building a dream house. That's not an economy. That's
somebody that's lucky, right, or worked hard and is
enjoying the fruit of their labors. That's not an economy.
11:10:13 AM
MAYOR POND continued:
What we're seeing now is companies coming in from out of
town actually developing whole subdivisions so this is one
of the early ones here. Anyway, we're seeing a huge
presence of security. [Indisc.] Services hired 35 new
officers, bringing the [indisc.] up to nearly 50 officers
in Prince Rupert. The RCMP [Royal Canadian Mounted Police]
are upping their presence, as are other agencies.
Now we know - and I've got to identify - I mean we'd be
foolish not to recognize that there are challenges that
have entered into the system of operating between British
Columbia and Alaska that didn't exist when Southeast
Conference was formed in 1963 and when we began this
venture. Safety of Life at Sea requirements that didn't
exist back then. Actually that's a bit of a red herring
but [indisc]. Old Canada and U.S. Customs issues that have
become really intensified and, you know, I understand the
dynamics of those as well, I think, as anybody.
The advanced ferry schedule wasn't actually in my talking
points but I want to make a note on that just the same and
that is this: when I first moved to Prince Rupert I got
introduced to Alaska by a hotelier in Prince Rupert whose
hotel was primarily built around the 1963 coming together
of those two systems. He was in Alaska and active in
Alaska all the time as a member of what was then the AVA
[Alaska Vistors Association] and now the ATIA [Alaska
Travel Industry Association] and we were active up here.
That hotelier now spends zero percent of his time and
energy on Alaska and it really has to do with a lot of
decline in the system. One of the things that we were very
successful as local communities lobbying BC Ferries is to
say that if you want to sell tourists and get into the
international marketplace, you must be able to tell them
two years in advance what your sailing schedule is. It is
absolutely impossible for a wholesaler in Germany to put
brochures in the marketplace without knowing two years in
advance when he's going to get on that vessel with his
customers and BC Ferries have done that. In the absence of
that, quite frankly, the tour market coming in and through
our community, up into Alaska is dying, straight up. There
is a fraction of the tourism [indisc.]. There are some
other issues that have to do around scheduling and
everything else but that's one of the issues I can see.
11:12:57 AM
MAYOR POND continued:
There are some tremendous opportunities in front of us. I
want to say to you I think there are two things that jump
out at me. One is this whole trade route, the commercial
connection in transportation - what can you make in Alaska
that might go into those containers that will go to China?
JC is absolutely right. The marketplace with containers
traveling back and forth kind of works like this. It's
about 3 to 1. Andrew is here from the Port of Prince
Rupert. He can answer all of the questions in the world.
He is kind of specialized on doing business here with
Alaska companies. But it's roughly 3 to 1. For every -
the containers are 100 percent full coming from Asia but
about one-third to half of them are going back full. So
guess what? The rates going back are about the third
because people discount them to try and find products to
move back in those empty containers. There are huge
opportunities for fish and potentially timber products and
other things that you can put in those cans and send back.
And then, of course, there's the opportunity to fly
domestic goods into Alaska from that container port, from
the Chicago heartland areas and others. And then, of
course, there's the opportunity to send your finished
products into the heart of the United States. So there are
all these opportunities and that's all around the trade
route.
But there's a second opportunity that I think that we have
somewhat missed and that is your pipes, like our pipes on
the BC ferry system, are full. The input opportunity is
full. We are lobbying BC Ferries for daily ferry service
because they run a vessel into Prince Rupert every second
day. Through the summer it's full. Once it's full - once
the car deck, in fact, is full, we have now capped out the
number of visitors that can come on a circle tour into
Prince Rupert. It doesn't matter how much marketing we do.
It doesn't matter how many hotel rooms we have available
and at what price. If a passenger can't get into the
system, they can't experience what we have.
I know from talking up and down Southeast over the years
that one of the visitor opportunities that Southeast has
always felt was underrepresented is those people that stay
overnight. You're doing a great job in the cruise industry
but where are the people that are going to fill the hotel
rooms, the restaurants? I was absolutely astonished, I've
got to tell you, when with about a week's notice I was able
to get 10 rooms in Kake in the middle of summer. I was
absolutely astonished. That shouldn't be. It just
shouldn't be. Yet if your pipeline is full, if the ferry
out of Bellingham is full, if the ferry coming in out of
Rupert is at capacity because of the schedule or whatever,
then your ability to fill the ferry in Petersburg and your
ability to fill your ferry anywhere else in your system -
it's full. You capped it. Your ability to put people in
hotel rooms and your ability to sell those extra meals
after the cruise ships, it's all gone. In our case, I
think we should widen the pipeline. I think we should
[indisc.] the pipe that actually feeds the system and then
we wonder why the system is actually having some problems.
Open up the pipe and the whole system starts to gain.
And so those are the opportunities. That's why I think
that what's happening in our little neck of the woods
matters to Alaska. Thank you for this opportunity to kind
of paint that picture for you and, as I say, Andrew is here
from the Port. ...The guys from the casino are here and
they'll gladly book you down there and you also have the
hotel in Prince Rupert so.... Anyway, if we can help with
anything, let us know. That's really why we're here.
Thank you.
CHAIR JOHANSEN thanked Mayor Pond and asked Captain Falvey to
address the committee.
11:17:09 AM
JOHN FALVEY, Captain, General Manager, Marine Highway System
(AMHS), Alaska Department of Transportation & Public Facilities
(DOT&PF), stated the following:
I don't have a PowerPoint but what I would like to do is
talk a little bit from a technical standpoint since I have
a pretty good handle on how things go day by day, day in
and day out, and the technical aspects of things. What I'd
like to talk about is the Southern Gateway Shuttle project.
I want to talk about that a little bit. We'll talk a
little bit about SOLAS [Safety of Life at Sea] and then we
can go from there.
I'd like to start by saying in November of 2004 the state
commenced what is called a design study report for a
Southern Gateway Shuttle. This was federally funded so
there was a federal bidding process and Glosten and
Associates, a very capable firm, they've actually done a
lot of work for us. They designed the fast ferries. They
won the bid and they commenced the design study report.
What a design study report does is it makes our recommended
design recommendations - it doesn't actually come up with a
drawing that you can bring to a shipyard and say go ahead
and build the boat, but it comes up with a concept. It's a
pretty detailed process. They take all kinds of things
into account. This report is 60 or 70 pages long. They
look at different vessel types, different vessels, maybe
two vessels going end to end, day boats, 24/7 boats, it
goes on and on. It also provides the necessary preliminary
engineering needed for environmental documentation. They
develop a cost estimate. We have a rough cost estimate.
They recommend the best acquisition type process to
physically go out and purchase the boat.
Mayor Weinstein was correct in saying there was $27 million
of federal money in a pot. That money is no longer there.
I guess what I can say is federal dollars - Shakwak
[Project] dollars [a highway construction funding accord
between the United States and Canada] - it's very complex
the way that money gets spent. I'm just going to leave it
at that.
11:19:50 AM
CAPTAIN FALVEY continued:
Now, as I say, this process began in November of 2004. In
May of 2005 Glosten did deliver to us a design study
report. They came up with what we'd call a forward concept
vessel. In essence, this vessel is, in their final
analysis, after a lot of analysis, a steel hulled long,
slender vessel. It's not a vessel that would need the
horsepower, per se, to reach a speed of approximately 24 to
25 knots. That would allow us to run from the Ketchikan
terminal to Prince Rupert as a day boat with a capacity for
250 people approximately, and 60 large Alaska standard
vehicles. It also has got to have the capacity to handle
vans, which there are quite a few of, because that's
important. In July of 2006 this project became inactive.
Probably we don't want to go into details on that but it
became inactive due to a lack of activity with the project
and money, funding sitting in that project pot. The
Federal Highway [Administration] will not allow us to have
a project that, in essence, sits inactive and money is not
being spent on the project.
In February of 2007 I reactivated the project. There was a
process we had to go through to reactivate the process. So
the Southern Gateway Shuttle is back on the books. It's
back on the rolls and, as of just a few days ago, the
Federal Highway [Administration] folks talked to both
myself and my director of engineering and indicated to us
that you need to get some more money in the pot and you
need to start doing something or it can't stay active. So
that's where we're at with the Southern Gateway [Shuttle].
I guess, logically, the first question that comes to my
mind, being a technical guy here, is with the folks in this
room and the thought process that will go on again after I
get done talking, Is there some concept that this may not
be the vessel we want? I think that to proceed ahead with
the vessel we do want, we need to have pretty strong
guidance from somewhere. We've heard about Metlakatla
possibly being involved. This would not be the vessel to
go on to Metlakatla, most likely. So I think we need to be
very careful. We need to get some good solid guidance as
to how we're going to go forward and then move forward.
Very roughly, this is an $80 million boat. That's a rough
figure but those are the kind of figures that we're
[indisc.]. That's a lot of money.
To go from where we are now, we probably need another $1
million so we can actually draw a design that we can take
to a shipyard [indisc.] build it. Then you'd probably be a
few years away from actually building something. As far as
new construction, what has happened is the hurricane that
hit New Orleans did so much damage to marine vessels and
barges and all of that, that the shipyards are facing
backlogs. These companies that manufacture engines and
provide parts and pieces for ships are really backlogged.
So that's what we have for the Southern Gateway [Shuttle].
I would say that technically we're going to need some
guidance as to is this the boat for us because I've got on
a piece of paper a concept of what it should be. It's
pretty quick and pretty easy to physically design it. So
that's step one.
11:23:20 AM
CAPTAIN FALVEY continued:
I guess the other thing I want to talk about is, as Mayor
Pond had mentioned, is SOLAS. SOLAS is Safety of Life at
Sea, it's international regulations, so these aren't United
States or Canada's rules; these are international rules.
Basically they are set in place for vessels going from one
country to another calling on a foreign port. Where we are
now is because these regulations are tiered regulations,
we've been dealing with this for years, getting botched up
with it, and we continue to deal with it. It's very
expensive. We make these modifications during our federal
projects. During the CIP [Capital Improvement Project]
federal overhauls, we do a little at a time.
So what I understand now is we've got three vessels that
are SOLAS certified as we speak today - 2010 is not a big
benchmark for us - the [MV] Matanuska and the [MV] Taku and
the [MV] Kennecott. The Kennecott's in pretty good shape.
She is a [indisc.]. When they built the Kennecott they
knew that this was coming 2010 out in the future and
prepared for that. So we're really, money wise, in pretty
good shape with the Kennecott. As far as the Matanuska and
the Taku are concerned, we are in the groove with that. We
know what we have to do. I don't know whether I'll bore
everybody with the different requirements. It's technical
stuff. But, as far as the Matanuska is concerned, we need
by 2010 to put another $6 million or so into that boat just
for SOLAS, let alone anything else that we might need to
keep the boat running and believe me, the big federal
projects are what keeps these boats running, not the state.
[indisc.]. As far as the Taku is concerned, by 2010 we're
looking at about 4.6 million. We have that money set in
place and we are in the groove, we have a plan. We have a
process to get the money and we know the money is going to
be there.
So as far as we're concerned, those three boats with the
money that I just mentioned will meet the 2010 SOLAS
requirements. Now that's important because I would say
technically, no matter how hard we push, we'd probably be
hard-pressed to have a [Southern] Gateway Shuttle by 2010.
That's only three years away. So we can't leave ourselves
holding the bag with no boats [indisc.] at Prince Rupert.
So, we've got that covered. There's a plan and that's what
it's going to cost.
11:26:26 AM
As far as Prince Rupert itself, as the Mayor had mentioned,
there are issues but none of these issues are
insurmountable. We plan to move ahead and discuss a lot of
these issues, things like the actual dock itself and
transfer bridge. We need to talk about lease agreements,
SOLAS, which I've just discussed. We've got that covered.
Customs issues - that's a big one for us, probably for you
too. That not only involves our crews coming and going out
of Canada but our batches. We need to talk about all of
that. Captain [George] Capacci and I, being busy guys,
have failed twice now to meet. George has attempted to
come to Ketchikan twice but either his schedule or my
schedule didn't dovetail and the idea behind that was to
start some discussions on mutually sharing docking
arrangements. So we are going to try to side bar today
with Deputy Commissioner Hardy, Captain Capacci, and myself
regarding that. We will start those talks and hopefully
they'll be fruitful.
That's really about what I have. I want everybody to fully
understand what the Southern Gateway [Shuttle] is. I think
that if there's one direction this group needs to try to
take us in, Is what we have on paper now, conceptually, is
this the way we're going to go? JC had mentioned South
Mitkof. This boat could do something about that. You've
got some draft problems there but this boat would be okay.
So we need some good guidance. That's what we need. It's
unfortunate that this project was swept but I got it back.
It's back, it's there. I would say the biggest challenge
is getting the money to build it. So, that's what I have.
If there are questions, I'd be more than happy - I've got
some more staff here too if I can't. I've got our
accountant here and our ops engineer here so.
CHAIR JOHANSEN announced that he wanted to hold off on
questions. He noted the House Transportation Standing Committee
would be meeting in Juneau in January or early February [2008]
and wanted members to start thinking about these issues between
now and then.
CAPTAIN FALVEY repeated that DOT&PF has a very detailed report
that provides a concept.
11:29:39 AM
CHAIR JOHANSEN asked participants to look at DOT&PF's report.
He said the bottom line is to connect these communities. He
asked the community leaders to communicate their needs and
desires to Deputy Commissioner Hardy and Captain Falvey.
CAPTAIN FALVEY said he will not let the project die at this
point.
11:31:05 AM
REPRESENTATIVE NEUMAN said he looks forward to working on this
issue and doing what is necessary to help support the
communities involved.
REPRESENTATIVE JOHNSON added that the Southern Gateway [Shuttle]
is a very interesting concept.
REPRESENTATIVE DOOGAN said he is interested in seeing more
details and has some sympathy for people who can see their
neighbors but can't quite get to them, so he will be happy to
look at this issue further.
The committee took an at-ease from 11:33:15 AM to 11:33:15 AM.
CHAIR JOHANSEN called the meeting back to order and asked Mr.
Miller to begin his presentation.
KENT MILLER, a private industrial economist, said he has worked
on transportation projects over the years, beginning with
container barge service in the 1960s. He said he would present
a private sector option for addressing a portion of the market
for passenger and vehicle ferry service between Ketchikan and
Prince Rupert. He continued:
The logic of this project is that historically about half
of the ferry traffic between Ketchikan and Prince Rupert
has been local, that is between the two ports. About half
has been long haul between Prince Rupert and ports
[indisc.]. During the past 20 years, all components of
marine highway traffic between Southeast Alaska and
Ketchikan have declined very substantially, on the order of
50 percent. The Alaska Sea Road Project, which I'm
proposing to develop, addresses local traffic that is
between Ketchikan and Prince Rupert, specifically the
portion of the local traffic that has been lost in the last
20 years. This is not intended to be a project that
competes with any other development objectives. It is
intended specifically to restore traffic that the existing
[indisc.] no longer carries and to complement the marine
highway main lines and service Metlakatla [indisc.].
As Mayor Pond said, when we talk about Prince Rupert, we're
not talking about just the city. We're talking about a
region. The sea road concept, addressing improved service
between Ketchikan and Prince Rupert [indisc.] local region
consisting of the Skeena and Nass Valleys and more
extensively [indisc.] north into the Cassiar and addressing
the Cassiar physically with a connection to Hyder and
Stewart. Beyond that, the sea road concept sees the need
for a market for access to major transportation
infrastructure at both Prince Rupert and Hyder and Stewart,
mainly via rail and the Highway 16.
The concept for a passenger vehicle ferry service starts
with a definition of service needs of the program. The
boat doesn't exactly come first but, on the other hand, in
presenting the concept of a passenger vehicle ferry,
certainly the picture of the boat is worth many thousands
of words.
11:51:20 AM
So, to make the presentation as brief as possible, this is
the conceptual design for a vessel that would serve both
Prince Rupert and Hyder's local passenger vehicle ferry
needs. It's a less than 150 passenger boat. It would be
certificated under 46 CFR subchapter (K). It would be a
SOLAS vessel, capable of service between the U.S. and
Canada. It has a capacity of under 150 passengers and 24
vehicles. Vehicles are defined as standard vehicles. The
standard is the Ford Expedition, essentially, 17 foot 3
inch, six foot 8 [inches] wide, 5800 pound vehicle. That
would be the average. These vehicles are accommodated on a
car deck that is partly covered and partly open. The open
section of the car deck aft is capable of carrying the
largest personal use vehicles on the road today, typically
Winnebago ... and Class A motor homes or a larger number of
Class C vehicles, also motor homes or the equivalent small
to medium truck. The passenger cabin is set up for, in
this rendering in a very rudimentary way, as you can see
[indisc.] definition of spaces, into a forward observation
lounge, a central recliner lounge, and coffee shop, bar
area with about 176 feet. There's the solarium on the top
deck, which would have additional coverage but open air
seating.
It's a conventional 173 foot long, 34 foot wide, steel 16
knot ferry. It's designed for economical construction and
operation, construction on a budget less than $8 million,
well precedented for a [indisc.] operation with a day crew
of four or five and, for extended operation over the longer
day necessary for the trips it is programmed for with a
double day crew of eight. The crew on a 100 ton boat, of
course, the crew operates the boat and provides passenger
services, including food and beverage.
So, there's the vessel concept going on to really the more
important features of the project, the definition of how
the service would work. This is a summary of the service
characteristics. Beginning in 2009, we would operate a 22
week season ending November 1. Its routing would be
Sunday, Tuesday, Thursday, Prince Rupert and Ketchikan, and
Monday, Wednesday, Friday, Hyder, Ketchikan, Rupert, and
Saturday Prince Rupert, Ketchikan, Prince Rupert. Daily
service between Ketchikan and the terminal at Prince Rupert
and Hyder with four [indisc.] Prince Rupert and Hyder
[indisc....]
So this doesn't include discounts, it doesn't include
premiere fares for certain seasons or travel in certain
travel markets but the average fare revenue would be about
$60 initially for a one-way passenger fare, and about $130
for the standard Ford Expedition fare. And then for larger
vehicles $215, these would be vehicles of the Class C motor
home size. Of course there would be lower fares for
compacts and higher fares still for the very largest
vehicles.
Prince Rupert and Hyder would be level rated, that is the
fares would be the same even though the running distance is
50 percent greater to Hyder and there are incremental
costs, such as fuel in particular. The service could
nevertheless be optimized based on a quite intensive
utilization of the vessel on these combined routings
between Prince Rupert, Ketchikan, Hyder, and then back
again.
11:56:43 AM
Looking at the time table for the service, the timetable is
intended to provide daylight service between Ketchikan and
Prince Rupert. It's a timetable that is the same for every
trip. It repeats weekly through the 22 weeks and it's
intended to interface with [Alaska] Marine Highway [System]
service to Metlakatla and IFA service to and from Prince of
Wales. Our view of Ketchikan is expensive too, considering
the entire 20,000 population of the Ketchikan and Prince of
Wales - the outer Ketchikan areas put together. The boat
Sunday, Tuesday, Thursday would leave Prince Rupert, having
overnighted there at 7 AM, reach Ketchikan at 11:45 AM,
taking into account the time change, leaving again at 12:15
PM and arriving in Hyder at 10:00 PM. The next morning,
having overnighted at Hyder, it would leave at 7:00 AM,
arrive in Ketchikan at 2:45, leave Ketchikan at 3:15, and
arrive at Rupert at 10. On Saturday it would make a trip
only between Prince Rupert and Ketchikan, leaving Prince
Rupert in the morning and following the same schedules
north and back, just omitting the connection to Hyder,
which it's not capable of doing in a single day.
The vessel, of course, is intended as a profit making
project. It would have to make money under the criteria
outlined and the business plan seems very promising of
that. I promised ten minutes and I hope I haven't overrun
so I'll be glad to answer questions when the time comes.
11:58:41 AM
CHAIR JOHANSEN remarked that Mr. Miller's point is that if
options other than the AMHS are considered, other folks are
interested in providing service. He suggested Mr. Miller
contact Captain Falvey and reminded everyone that other options
exist. He thanked participants for attending the meeting.
ADJOURNMENT
There being no further business before the committee, the House
Transportation Standing Committee meeting was adjourned at 12:00
p.m.
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