Legislature(2011 - 2012)SENATE FINANCE 532
02/02/2011 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| Presentation on Statewide Transportation Economic Indicators | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE FINANCE COMMITTEE
February 2, 2011
9:02 a.m.
9:02:59 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Lesil McGuire, Vice-Chair
Senator Johnny Ellis
Senator Dennis Egan
Senator Donny Olson
Senator Joe Thomas
MEMBERS ABSENT
None
ALSO PRESENT
Steve Hatter, Deputy Commissioner of Aviation, Department
of Transportation and Public Facilities; Bill O'Leary,
Chief Financial Officer, Alaska Railroad Corporation;
Senator Cathy Giessel
PRESENT VIA TELECONFERENCE
None
SUMMARY
^Presentation on Statewide Transportation Economic
Indicators
9:04:25 AM
Co-Chair Stedman stressed importance of understanding the
state transportation projects. He felt that the recession
had affected transportation projects, and stressed the
importance of developing projects that enhance the economy.
STEVE HATTER, DEPUTY COMMISSIONER OF AVIATION, DEPARTMENT
OF TRANSPORTATION AND PUBLIC FACILITIES, presented the
PowerPoint: "Alaska Department of Transportation & Public
Facilities. Aviation-Economic Engine for Alaska" (copy on
file). Commissioner Hatter presented slide 1:"Alaska's
Airports and Aviation." He stated that the Airport system
in Alaska was the largest system in the United States with
255 state airports. Aviation was the main mode of
transportation for all citizens and regions. He stated that
airports were the only means of access for 169 Alaskan
communities. The Alaska International Airport System (AIAS)
was an economic engine for the state.
Commissioner Hatter showed slide 3: "Aviation Industry
Economic Contribution to Alaska." He remarked that there
were currently 47,000 aviation jobs statewide. Aviation was
the fifth largest contributor to Alaska's Gross State
Product (GSP), which was $3.5 billion in the $44 billion
economy. He remarked that the Department of Transportation
and Public Facilities was currently completing an aviation
system plan, and aviation system planning had not occurred
since 1996.
Commissioner Hatter showed slide 4, and stated that the
biggest aviation contributor to the state economy was the
AIAS: Ted Stevens Anchorage International Airport, and the
Fairbanks International Airport. He remarked that Anchorage
received the highest cargo landed weight in America, and
Anchorage was ranked number five in America for cargo
throughput weight. He emphasized that cargo was a strong
economic driver of the AIAS.
9:08:57 AM
Commissioner Hatter showed slide 5, and stated that the
picture featured a weather diversion on a ramp in
Fairbanks. He remarked that the Anchorage and Fairbanks
airports work together as alternate routes due to
environmental changes and weather. He stressed the
importance of the two airports working together as a
system.
Commissioner Hatter discussed slide 6: "AIAS Overview." He
stated the AIAS was established by the legislature in 1961,
and it operated as a single business enterprise. He
reported that AIAS operated as an enterprise fund, is
financially self-sustaining, and had specific statutory
provisions for issuing general airport revenue bonds. The
airport bonds were only backed by revenue of the AIAS; not
by the full credit of the state. The AIAS served as
regional hubs for intrastate mobility, and served as a
trans-Pacific hub for international cargo. He remarked that
AIAS was a very important stopping point for the Asia to
North-America cargo route.
Commissioner Hatter presented slide 7: "AIAS Presentation
Points." He stated that he would be discussing AIAS
advantages and strengths; finances, statistics, and trends;
fuel supply funding; successes; and future.
Commissioner Hatter displayed slide 9: "Advantage
Location." He stated that the Anchorage Airport was
approximately 9.5 hours from 90 percent of northern
industrialized world. Alaska was uniquely situated between
Asia and the United States, which made sense for planes to
carry more cargo. Planes could stop for fuel in Anchorage,
before continuing to their desired location. He remarked
that Fairbanks and Anchorage were separated by 200 land
miles, which was ten minutes by air, so diversion
opportunities were easy. He stated that both airports had
never closed at the same time, except on 9/11.
9:13:04 AM
Commissioner Hatter discussed slide 10: "Advantage-Payload
v. Range." He stated that airlines stop in Alaska for fuel,
because it allows them to carry more cargo. He remarked
that there were some aircraft that could not stop in Alaska
to refuel, but almost all aircraft would need to reduce
their cargo in order to carry enough fuel to have a direct
flight.
Commissioner Hatter presented slide 11: "AIAS Cargo Traffic
Standings." He stated that the Anchorage Airport was one of
the busiest cargo airports in North-America and the world.
He stated that AIAS was focused on the global airport
system.
Commissioner Hatter discussed slide 12: "Strength-Diverse
Customer Base." He stated that a significant strength of
the AIAS cargo business was the diversity of its customer
base. He stated diversity was important, because of the
high replacement factor. He remarked that large hubs in the
lower 48 were mostly dependant on a single carrier.
Commissioner Hatter showed slide 13: "Strength-Large Cargo
Anchor Tenants." He stated that two large cargo anchor
tenants were the United Parcel Service (UPS) and Federal
Express (FedEx). He announced that UPS and FedEx infused
jobs and commerce in the Anchorage community.
Commissioner Hatter discussed slide 15: "Monthly
Enplanements." He stated that the data showed steady
enplanements over the recent global economic downturn. He
remarked that there was a consistent base over the winter
time frame, and displayed the importance of the summer
tourism peak. The graph also showed large troop deployments
to the Middle East; and was represented by spikes in August
2009 and May 2008. He stated that there was mutual
importance in the system, regarding the Alaskan military
installations. He pointed out that there was passenger
travel stability in Alaska.
Commissioner Hatter showed slide 16: "Monthly
Enplanements." He stated that cargo was historically much
more volatile than passenger travel. He reiterated that
AIAS was moving in a beneficial direction.
Commissioner Hatter discussed slide 17: "Cargo Operations."
He stated that cargo operations were on the rebound, and
the indicators were moving in a positive direction.
9:21:02 AM
Commissioner Hatter displayed slide 18: "Impact of Global
Economic Downturn." He felt that trends seemed positive. He
remarked that FY10 saw a dramatic up-take in trans-Pacific
cargo.
Commissioner Hatter discussed AIAS Close Watch Topics, and
began with slide 20: "Fuel." He reiterated that there must
be an affordable and available fuel system to operate the
AIAS. He remarked that there was a market shift in fall
2009, which resulted in a fuel shortage. He stated that
stake-holders came together, and tried to develop mutually
beneficial solutions. The meetings resulted in the addition
of fuel suppliers: Delta Western and Cosmo. He remarked
that all new suppliers needed to be approved by the
Department of Environmental Conservation (DEC). He stated
that, with the addition of the suppliers, the fuel supply
was adequate for the foreseeable future. The Alaska Fuel
Supply Consortium (AFSC) was discussing additional storage
options, and DOT/PF would continue to track the fuel supply
issue.
Commissioner Hatter presented slide 21: "Federal Funding
and Regulation." He stated that for capital projects, the
airport business depended significantly on the Federal
Aviation Administration (FAA) Airport Improvement Program
(AIP) funding. He remarked that DOT/PF was carefully
watching trends toward regulatory oversight; which
sometimes meant unfunded mandates.
Co-Chair Hoffman queried the improvements of the Anchorage
and Fairbanks airports and federal earmark funding.
Commissioner Hatter replied agreed to provide that
information.
9:25:58 AM
Commissioner Hatter discussed AIAS successes with slide 23:
"AIAS Response to Recession." He stated that the leadership
of the AIAS responded well to the recession, and were able
to remain competitive.
Commissioner Hatter displayed slide 24: "AIAS Recent (2010)
Successes." He stated that in August 2010, 18 international
cargo carriers attended Alaska International Cargo Summit
held in Anchorage. The summit's meetings included
information on Alaska's unique air cargo transfer rights.
He remarked that winter charters from Tokyo to Fairbanks on
Japan Airlines increased to 15 flights, which were up from
10 flights the previous year. He stated that Frontier
Airlines added seasonal non-stop service in 2010 from
Denver to FAI. He added that Jet Blue would provide
Anchorage to Long Beach daily flights from May to
September. He stated that Edelweiss Airlines would provide
a Zurich to Whitehorse to Anchorage weekly flight from May
to September. He reported that Cargolux cargo flights
returned in October, 2010, with 10 to 14 stops a week.
Commissioner Hatter discussed the AIAS future with slide
26: "Asian Market Projected to Lead Growth." He stated that
the chart was a forecast from Boeing World Air Cargo from
2010 to 2011. The line that represented North America to
Asia had the highest annual growth percentage, and
represented a large portion of Alaska's cargo market share.
The graph showed that Asia cargo was expected to grow.
9:30:12 AM
Commissioner Hatter showed slide 27: "Cargo Summit and
Follow On." He stated that there was a plan for a second
annual Alaska International Cargo Summit for August 2011.
Commissioner Hatter presented slide 28: "Strategic Planning
and Marketing." He stated that for many years the system
focused on capital improvement, and was transitioning into
the next phase of helping to build a world class
enterprise. He stated that AIAS was looking at an
organizational study that would focus on talent and skill
sets, in order to become a world class operation. He stated
that AIAS was looking closely at the Asian market, and how
to brand AIAS when approaching potential customers.
Co-Chair Stedman referred to slide 11, and wondered if
Commissioner Hatter could go back to FY07. He also queried
the potential competitor in British Columbia. Commissioner
Hatter replied that he had been watching British Columbia's
marketing strategy, and would continue to distinguish the
Anchorage system. He agreed to provide the rest of the
information.
Senator Olson referred to a comment about Anchorage and
Fairbanks being closed on 9/11, and how planes were
diverted to Whitehorse on 9/11. Commissioner Hatter replied
that 9/11 was a unique situation, and lessons had been
learned from that situation. He stated that collaboration,
communication, and partnership were essential tools in
working with the Canadian carriers.
Senator Olson remarked that the airports were eroding, and
wondered how to maintain the airports. Commissioner Hatter
stated that there was a thorough airport project evaluation
board process, and stakeholders determine the prioritize
airport projects. He stated that most of the capital
improvement projects for the rural airports were funded
through the FAA.
9:38:37 AM
Senator Thomas wondered how the activity on slide 24
impacted slides 15 and 16. Commissioner Hatter replied that
the indicators showed growth, and were moving in a positive
direction.
Senator Thomas queried the Flint Hills jet fuel situation.
Commissioner Hatter replied that from an international
airport perspective, the priority lies in affordability. He
reiterated that the AIAS was not in the fuel business, but
merely enabled the carriers to feel comfortable using
Alaskan business. He stated that the AIAS was not a part of
the fuel consortium.
Senator Thomas stressed the importance of using fuel
produced in Alaska.
9:42:26 AM
Senator McGuire requested data for cargo traffic standings
of the Anchorage Airport compared to the Vancouver, British
Columbia International Airport. She also stated that there
was interest in collecting Alaskan seafood on the empty
cargo planes that were on their way back to Asia.
9:46:04 AM
Senator Olsen asked about runway and ramp extensions.
Commissioner Hatter replied that many agencies had
expressed interest in runway and ramp extensions, but there
was a challenge with lack of infrastructure.
Senator Olsen asked if the state was going to attempt to
service the more rural and infrastructure poor areas.
Commissioner Hatter replied that he would get the
information to the committee at a later date.
Senator Olson pointed out some new military issues, and
wondered what the department's position was for dropping
the ceiling from 5000 feet to 500 feet. He felt it would
inhibit some commuter aircraft. Commissioner Hatter
believed that the Department of Defense had plans for
defense training and required studies related to airspace
and safety. He felt that Alaska had unique capacity to
explore options about using airspace only when imperative.
He remarked that the state should not cater to the
military, but also not inhibit the military.
Senator Olson stated that cargo should not be the number
one priority, because the airports were designed for the
state residents.
Co-Chair Hoffman expressed concern on the state's position
on bypass mail infrastructure. He felt that federal bypass
mail decisions were basically a transfer of costs from the
federal government to the state. He stated that the state
needed to have a better stance on bypass mail, because of
the burden bypass mail places on the rural areas. He
stressed that attention should be placed on the smaller
communities, because of hazardous weather conditions. He
reiterated the importance of focusing on service to Alaskan
residents. Commissioner Hatter replied that he would
fulfill his duties as commissioner, and therefore determine
priorities.
10:02:49 AM
BILL O'LEARY, CHIEF FINANCIAL OFFICER, ALASKA RAILROAD
CORPORATION, stated that "The Alaska Railroad Corporation
Briefing to the Senate Finance Committee" (copy on file)
would touch on three areas: corporate overview, financial
position, and earnings/operating budget outlook.
Mr. O'Leary discussed slide 3: "Alaska Railroad
Corporation." He stated that the railroad was built by the
federal government between 1914 and 1923, and was purchased
by the state of Alaska for $22 million in 1985. He remarked
that the railroad was a self-supporting, state-owned
corporation. The railroad was serving ports and communities
from the Gulf of Alaska to Interior Alaska with 469 miles
of mainline track; and it was a full-service passenger and
freight railroad serving communities from the Gulf Alaska
to Fairbanks.
Co-Chair Hoffman wondered if there was a Railroad board.
Mr. O'Leary replied that there was a seven member board,
and they are appointed by the governor with two members in
the governor's cabinet. The board meets on an average of
every six weeks. He remarked that board members were paid
$400 per day when working on railroad business.
Mr. O'Leary presented slide 4: "201 Sources of Customer
Revenue." He stated that freight provided 67 percent of the
revenue; and real estate and passenger revenue also
provided a significant portion of the revenue.
10:07:16 AM
Mr. O'Leary discussed slide 5: "Freight Business." He
stated that the railroad moved 6.3 million tons of freight
overall in 2010, compared to 6.2 million tons in 2009. He
anticipated 3.5 percent freight growth in 2010. He stressed
that the railroad was heavily reliant on three primary
commodities: petroleum, coal, and rail barge services that
supported the oil industry.
Mr. O'Leary discussed slide 6: "Passenger Business." He
stated that the railroad was known around the state for its
passenger business. He noted that the passenger business
included both ARRC trains and cruise partner movements; and
the trains moved 405,000 passengers in 2010, compared to
471,000 in 2009 (14 percent decrease). He anticipated a 3.2
percent growth over 2010. He pointed out the year-round
scheduled passenger services made the ARRC eligible for
Federal Transit Administration formula funds.
Mr. O'Leary displayed slide 7: "Real Estate." The railroad
real estate focused on property development; leases and
permits; dockage and wharfs; facilities maintenance and
management; and revenue from real estate activities was a
key component to ARRC being self-sustaining.
Mr. O'Leary showed slide 8: "Capital Funding Sources." He
stated that ARRC earnings provided the required match for
federal funds, and was essential for freight-related
improvements. He furthered that the USDOT/Federal Transit
Administration provided formula funds, grants, and
repayment for bonds. He remarked that other federal
agencies were also a funding source for ARRC. He stated
that federal funds allocated to ARRC did not affect federal
funding for other state transportation projects; and ARRC
federal match was not from the general fund, because the
match was solely based on ARRC earnings.
Mr. O'Leary continued with slide 10: "Balance Sheet
Highlights-Assets/Debt." He stated that the railroad had
experienced revenue challenges, but ARRC had managed to
withstand the challenges. He remarked that ARRC was poised
to gain $1 billion in assets. He divulged that ARRC had two
levels of debt: recourse and outstanding bonds. He stressed
that railroad debt was not the state of Alaska's debt.
10:12:26 AM
Mr. O'Leary discussed slide 11: "Balance Sheet Highlights-
Liquidity." He remarked that liquidity was improving.
Co-Chair Stedman queried cash flow of the ARRC. Mr. O'Leary
agreed to provide that information.
Mr. O'Leary displayed slide 12: "Benefit Trust Funds." He
announced that ARRC was not a part of the state's
retirement or medical programs. He stated that ARRC was a
planned sponsor of two benefit trust funds: Defined Benefit
(DB) pension fund and the Retiree medical fund. He noted
that both plans were financially sound: the DB pension was
99 percent funded as of January 2010, and the Retiree
medical was 118 percent funded as of January 2010.
Co-Chair Stedman queried the actuary and consultant on the
investment side. Mr. O'Leary replied that ARRC used Mercer
for the investment consulting, and were currently using
Gabriel Roeder Smith and Company (GRS) as the actuary.
Co-Chair Stedman wondered if ARRC used Mercer for asset
management. Mr. O'Leary affirmed.
Mr. O'Leary discussed earnings and the operating budget
outlook and showed slide 14: "Recent History." He stated
that the blue bars indicated the corporate net income, and
stated that the income reflected the calendar year. He
stated that for four years prior core train operations ran
at a loss. He stated that the loss coincided with the
decline in petroleum cargo from Flint Hills. He stated that
Flint Hills decided to stop hauling naphtha product for
export at the end of 2005; and that decision greatly
impacted ARRC financials. He stressed that ARRC was
healthy, and had taken steps to insure its financial
comfort. He stated that in 2009 ARRC eliminated
approximately 200 staff positions, which resulted in a
significant cost structure reduction.
10:18:01 AM
Co-Chair Hoffman queried the total number of positions the
200 layoffs were taken. Mr. O'Leary replied that ARRC had a
large seasonal staff, but felt that ARRC fluctuated between
approximately 725 employees to approximately 875 in the
summer.
Co-Chair Hoffman wondered the number of seasonal employees
that were laid off. Mr. O'Leary guessed that 30 percent of
the layoffs were seasonal workers. He stressed that the
eliminations were done in the fall, and agreed to provide
the committee with more detailed information.
Mr. O'Leary presented slide 15: "2010 Financial Snapshot."
He stated that there were low expectations for 2010, and
there had been significant uncertainty with some of the key
revenue lines. He remarked that petroleum haul was
anticipated to be half of that of 2003; passenger
operations were lower because of cruise ship redeployments;
and there was a significant impact of the 2009 personnel
downsizing. The budgeted net earnings for 2010 were $8.4
million, with a $4.3 million loss from train operations
budgeted.
Co-Chair Hoffman wondered if ARRC anticipated increased
cruise ship passengers in the future. Mr. O'Leary replied
that they did anticipate more cruise ship passengers,
because cruise ships were being redeployed back to Alaska.
Co-Chair Stedman requested cash flow financial data, with
the last four years of the ARRC balance sheet, an income
statement, and cash flow statement with foot notes.
Senator Egan wondered if the $4.3 million deficit in trade
operations displayed in slide 15 was recovered from the
real estate. Mr. O'Leary replied that real estate was a key
component, as well as the ability to use the federal
formula funds to reimburse for certain operating expenses.
Mr. O'Leary presented slide 16: "2010 Financial Snapshot."
He declared that preliminary 2010 numbers exceeded
expectations. He stated that 14 million dollars in earnings
were expected in the final numbers in March 2011. He
reported that petroleum performed worse than expected, but
it was offset by Trailer on Flat Car (TOFC) and Gravel
hauls; passenger revenue did not fall as far as
anticipated; solid expense control offset rising fuel
costs; solid expense control offset rising fuel costs; and
there was a year-end boost from tax credit legislation
approved by congress. He furthered that preliminary,
unaudited net earnings were $13.7 million, with $700,000
from train operations. The audit would be completed March
2011.
Steve Silverstein, Vice President of Business Development,
discussed the passenger and freight revenue details of the
railroad. He stated that there were many companies and
ports throughout the state that had ties to the railroad.
He pointed out that the railroad's capacity to move freight
into the state was 8 percent of the overall capacity. He
stressed that most of the heavy weight moving was done
throughout the rail belt. Moving large capacities was their
specialty. The numbers for 2010 were down due to a lag in
oil production. He cited slide 18: "2011 Freight Revenue
Budget-Local Coal." He stated that the export coal market
was strong. Slide 19 illustrated the future expectations
for coal haul on the railroad. Slide 21 detailed petroleum
income related to the railroad. He noted that funds were
down in 2010.
10:29:01 AM
Co-Chair Stedman queried the petroleum shipment
expectations for 2011 through 2013. Mr. Silverstein
responded that he expected 2011 to be better than 2010,
because Flint Hills forecasted a positive year in 2010. He
remarked that there were mostly unknowns, particularly in
regard to the refinery in North Pole. He stressed that the
local petroleum was getting replaced with imported fuel
from Singapore. He remarked that there was a slight
increase in product produced at the smaller in state
refineries. He furthered that most of the petroleum was
delivered by ship to the Port of Anchorage and the Port of
Nikiski. He reiterated that the decline in business from
the petroleum trade was a concern for ARRC, because was the
number one source of revenue for the railroad.
Mr. Silverstein continued with slide 23: "Petroleum Revenue
vs. Other Freight and Passenger Revenue." He stated that
petroleum and passenger growth had been in decline over the
two years prior, but other freight business was growing
rapidly. He continued to slide 24: "2011 Freight Revenue
Budget - Gravel" and highlighted the benefits of gravel
shipping for the railroad.
10:32:17 AM
Co-Chair Stedman believed that gravel industry would be
increased given road infrastructure projects throughout the
state. Mr. Silverstein stated that the gravel that the
railroad moves was only competitive in a small geographic
area. He remarked that the airport provided the most
projects for the gravel that the railroad hauls. He stated
that the railroad competes with truckers in the gravel
business.
In response to a question from Senator Thomas, Mr.
Silverstein stated that the success of the railroad was
based on the success of the petroleum industry.
Senator Thomas queried the railroad's Flint Hills jet fuel
business. Mr. Silverstein replied that jet fuel was
approximately 90 percent of what the railroad hauls for
Flint Hills.
Mr. Silverstein presented Slide 25: "2011 Freight Revenue
Budget-ARMS Barge." He stated that the railroad's
interstate business was through the ARMS barge. He stressed
that business from the oil fields provided 70 percent of
the ARMS barge revenue.
In response to a question from Co-Chair Stedman, Mr.
Silverstein stated that while many of the ARMS goods are
oil related, the goods might not necessarily go directly to
an oil company.
Co-Chair Stedman requested more information about the ARMS
barge, and Mr. Silverstein agreed to provide that
information.
10:37:00 AM
Mr. Silverstein discussed slide 26: "2011 Freight Revenue
Budget-CN Barge." He stated that the Canadian National (CN)
Barge is a railcar shipment service, with Prince Rupert to
Whittier to Anchorage routes. He announced that the largest
portion of the CN barge business was methanol related
shipments. He specified that methanol was used for freeze
protection in the oil fields. He stated that the second
largest shipment on the CN barge was propane, which was
primarily used in Kenai during the winter.
Mr. Silverstein displayed slide 27: "2011 Revenue Budget-
ICOFC." He explained the Interline Container on Flat Car
(ICOFC), and stated that the barges had racks over the rail
cars. The racks can be used by a customer to haul
containers, then the containers are hauled in on the tracks
from Whittier to Anchorage and Fairbanks. He stated that
business had been down, because a customer chose to use
their own barge to haul goods. That lost business was made
up through in-state business in other areas.
Mr. Silverstein showed slide 28: "2011 Freight Revenue
Budget-Misc Local." He remarked that the miscellaneous
business was difficult to accurately predict.
Senator McGuire wondered why there was a 14 percent
passenger decrease from 2009 to 2010. Mr. Silverstein
replied that the decrease was because cruise ships had been
redeployed. He stated that the railroad hauled the cruise
ships' containers and also hauled passengers.
Senator McGuire wondered if the two new cruise ships
scheduled to dock in Anchorage would any effect on the
ARRC's marketing strategy. Mr. Silverstein replied that
there had always been marketing for every direction the
railroad traveled.
Mr. Silverstein displayed slide 29: "Passenger Revenue
History and 2011 Budget." He announced that 2011 to be a
good year for passenger business.
Mr. Silverstein discussed slide 30: "Passenger Count. 2006-
2010." He remarked that as the cruise line container
revenue dropped drastically, the passenger revenue did not
experience such a drop. The passenger revenue was
maintained, because of the marketing toward independent
travelers.
Co-Chair Hoffman wondered if there were any programs to
encourage Alaskans to travel on the railroad. Mr.
Silverstein stated that there were advertised specials for
Alaskans, with regular campaigns for 20 to 50 percent off
fares. He remarked that ARRC had partnered with hotels for
Alaskan resident discount packages.
10:42:49 AM
Mr. O'Leary discussed slide 31: "2011 Outlook-Operating
Budget." He stated that the ARRC's financial situation was
still fragile. He announced that there was planned revenue
growth, although the market uncertainty, expense, and
pressures still persisedt. Revenue grown was anticipated
for Flint Hills, export coal, passengers, and fuel. He
reiterated that the ARRC board approved an earnings budget
of $18.million, with $8.7 million net income from core
train operations, and he concluded that contingency plans
were in place if the revenue did not materialize.
Co-Chair Stedman queried the impact of the Federal
Transportation Administration's (FTA) potential changes to
the formula funds, specifically the debt service to the
bonds. Mr. O'Leary replied that he felt that FTA would not
apply changes to the formula funds regarding debt service,
because it would directly affect bond holders. He remarked
that the ARRC's ability to be in the formula program was a
key to making the debt service payments to the bonds. He
stated that they were watching the FTA closely, and hoped
there would not be a negative impact.
Senator Olson queried right of way resolutions regarding
the railroad. Mr. O'Leary requested a more specific
question.
Senator Olson explained that the railroad owns some land
that they are not opening for use, so he wondered if ARRC
was making any further allowances for land use. Mr. O'Leary
responded that the CEO might be able to answer the
question.
10:49:26 AM
Co-Chair Stedman stated that ARRC CEO could provide more
information at a later time.
Senator Olson wondered if the ARRC would contribute to the
road to Nome. Mr. O'Leary replied that there had been work
with DOT/PF, and there were discussions about the benefits
of a rail connection to Nome.
Co-Chair Stedman stated that the railroad was also involved
in the expansion of Port Mackenzie.
Senator Thomas wondered if a northern extension of the
railroad would be compatible with the transportation of
mining materials. Mr. O'Leary agreed to provide that
information.
ADJOURNMENT
The meeting was adjourned at 10:51 AM.
10:51:38 AM
| Document Name | Date/Time | Subjects |
|---|---|---|
| 020211 ARRC Report to State.pdf |
SFIN 2/2/2011 9:00:00 AM |
020211 DOT Economic Indicators |
| 020211 ARRC Capital Projects Summary.pdf |
SFIN 2/2/2011 9:00:00 AM |
DOT Economic Indicators |
| 020211 ARRC Briefing.pdf |
SFIN 2/2/2011 9:00:00 AM |
DOT Economic Indicators |
| 020211 DOT Aviation Economic Engine.pptx |
SFIN 2/2/2011 9:00:00 AM |
DOT Economic Indicators |
| 020211 ARRC Response February 11 2011.pdf |
SFIN 2/2/2011 9:00:00 AM |
Transportation Economic Indicators |