Legislature(2019 - 2020)SENATE FINANCE 532
04/10/2019 01:00 PM Senate FINANCE
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| Audio | Topic |
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| Start | |
| Presentation: Alaska Marine Highway System | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 10, 2019
1:21 p.m.
1:21:18 PM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 1:21 p.m.
MEMBERS PRESENT
Senator Natasha von Imhof, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Peter Micciche
Senator Donny Olson
Senator Mike Shower
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
Senator Lyman Hoffman
ALSO PRESENT
Mary Siroky, Deputy Commissioner, Department of
Transportation and Public Facilities; Matt McLaren, Alaska
Marine Highway Business Enterprise and Development Manager,
Department of Transportation and Public Facilities.
SUMMARY
PRESENTATION: ALASKA MARINE HIGHWAY SYSTEM
^PRESENTATION: ALASKA MARINE HIGHWAY SYSTEM
1:21:56 PM
Co-Chair Stedman informed that the committee discussion
would include a discussion of that the AMHS would look like
if it operated from October 1 through June 1 of the next
fiscal year. He noted that the governor had proposed
cutting service during that time.
1:23:37 PM
MARY SIROKY, DEPUTY COMMISSIONER, DEPARTMENT OF
TRANSPORTATION AND PUBLIC FACILITIES, thanked the committee
for the opportunity to have in-depth conversations with
committee members over previous weeks.
MATT MCLAREN, ALASKA MARINE HIGHWAY BUSINESS ENTERPRISE AND
DEVELOPMENT MANAGER, DEPARTMENT OF TRANSPORTATION AND
PUBLIC FACILITIES, introduced himself.
1:24:05 PM
Mr. McLaren discussed the presentation, "Alaska Marine
Highway System (AMHS) Overview" (copy on file).
Mr. McLaren turned to Slide 2, "AMHS Ports of Call":
33 Alaskan Communities, Prince Rupert, & Bellingham
Mr. McLaren noted that the map on the page showed the ports
served by AMHS.
1:24:38 PM
Mr. McLaren displayed Slide 3, "AMHS Port and Vessel
Codes":
Communities
ANB = Metlakatla (Annette Bay)
AKU = Akutan
ANG = Angoon
BEL = Bellingham, WA
CBY = Cold Bay
CDV = Cordova
CHB = Chenega Bay
CHG = Chignik
FPS = False Pass
GUS = Gustavus
HNS = Haines
HNH = Hoonah
HOM = Homer
JNU = Juneau (Auke Bay)
KAE = Kake
KCV = King Cove
KOD = Kodiak
KTN = Ketchikan Communities
OLD = Old Harbor
ORI = Port Lions
OUZ = Ouzinkie
PEL = Pelican
PSG = Petersburg
SDP = Sand Point
SDV = Seldovia
SGY = Skagway
SIT = Sitka
TAT = Tatitlek
TKE = Tenakee
UNA = Unalaska/Dutch Harbor
VDZ = Valdez
WRG = Wrangell
WTR = Whittier
YAK = Yakutat
YPR = Prince Rupert, B
Ships
AUR M/V Aurora
CHE FVF Chenega
COL M/V Columbia
FWX FVF Fairweather
KEN M/V Kennicott
LEC M/V LeConte
LIT M/V Lituya
MAL M/V Malaspina
MAT M/V Matanuska
TUS M/V Tustumena
TAZ M/V Tazlina
M/V Motor Vessel
FVF Fast Vehicle Ferry
1:24:55 PM
Mr. McLaren referenced Slide 4, "Historical Revenue and
Operating Cost," which showed a graph entitled ' AMHS Fare
Box Recovery Rate 1987-2018.' The dark blue lines showed
system operating costs, and the salmon colored lines showed
the revenue generated. The wavy line showed the fare box
recovery rate, which was calculated by dividing the revenue
by the total operating cost. The high was in 1992, with a
fare box recovery rate of just over 60 percent.
1:26:09 PM
Co-Chair von Imhof observed that operating costs had stayed
consistent from 1987 up to 2005, at which time it
increased. She asked what caused the increase in costs.
Mr. McLaren stated there were a few factors. He relayed
that in 2005-2006 3 new vessels were added to the fleet,
contract negotiations had resulted in increased cost, and
some smaller coastal communities were added to the call.
1:27:12 PM
Co-Chair Stedman asked whether an agreement to move the
salary/benefit level up by 20 percent, as a result of fast
ferry work, had resulted in the cost increase.
Mr. McLaren thought the wage increases were for 6 and 7
percent. He offered to provide an exact number later.
1:27:54 PM
Senator Wilson asked for a list of vessel ages and port
acquisition dates.
Mr. McLaren agreed to provide the information.
1:28:36 PM
Mr. McLaren highlighted Slide 5, "Economic Impacts," which
showed two charts depicting the number of AMHS trips by the
top ten community of residence in 2014; and the top ten
destinations of AMHS summer visitors from 2011. He informed
that the data on the slide was provided by the McDowell
Group in January 2016.
1:29:48 PM
Senator Micciche wanted to make a connection between
bookings and economic impact. He asked about the use of two
different years.
Mr. McLaren offered to provide more detail later.
Ms. Siroky stated that the purpose of the slide was to give
an idea of where people were getting on and off the
vessels.
Co-Chair Stedman asked whether Anchorage was a port that
the Alaska Marine Highway System (AMHS) stopped in.
Ms. Siroky replied in the negative. She explained that
access to Anchorage would be via Whitter, Valdez, or Homer.
Co-Chair Stedman added Haines to Ms. Sirokys list.
1:30:58 PM
Senator Wielechowski asked how many active duty military
personnel used the AMHS to travel to and from the state.
Mr. McLaren relayed that in 2018, military travel in and
out of Bellingham, WA, equaled 907 vehicles and 1,194
passengers. He added that military travel in and out of
Prince Rupert consisted of 80 vehicles and 108 passengers.
Co-Chair Stedman asked whether the number included members
of the Coast Guard.
Mr. McLaren replied in the affirmative.
1:32:08 PM
Senator Wielechowski asked about the return journey for
military personnel and families.
Mr. McLaren stated that the breakdown of those traveling to
Bellingham was 438 vehicles and 568 passengers; travel to
Prince Rupert was 69 passengers and 47 vehicles.
Senator Wielechowski asked about the time of year that
military travel occurred.
Mr. McLaren offered to provide the information later.
Co-Chair Stedman added that it would be illuminating to see
how changes in the AMHS schedule would impact military
travel.
1:33:19 PM
Mr. McLaren addressed Slide 6, "FY 2020 Governor's 2/13
Budget":
Published summer schedule remains intact through the
end of August
September 1, 2019 through September 30, 2019, operate:
?Matanuska and Malaspina on their Bellingham and
SE Alaska runs
?Tazlina in Northern Lynn Canal
?Lituya from Ketchikan Annette Bay
?No service to Homer, Kodiak, Aleutian Chain,
Whittier, Cordova, Valdez, Chenega Bay, Tatitlek,
Yakutat, Prince Rupert, Angoon, Tenakee, Pelican,
Hoonah, and Gustavus
?Vessels in Layup: Chenega, Fairweather,
Kennicott, Columbia, Tustumena, Aurora, LeConte,
and Hubbard
October 1, 2019, through June 30, 2020:
?No Service
Vessels in Layup: All vessels
This schedule provides 84.8 weeks of service with
a potential fare box recovery rate of 40 percent.
UGF: $21,825.8
DGF*: $17,869.3 (Revenues)
Motor Fuel Tax Fund: $3,617.1
CIP Receipts: $1,893.7
*Includes DOT&PF Support Services
Expenditure Authorization: $45,205.9
Generated Revenue: $17,869.3
Net Deficit Amount: ($27,336.6)
1:35:12 PM
Senator Bishop asked about the expenditure authorization as
listed on the slide and asked about the cost of vessel
layup.
Mr. McLaren estimated that in the 9 months that the ships
would be laid up the cost would be $1.5 million, per month.
1:35:53 PM
Senator Wielechowski asked whether there were any
provisions in any of the collective bargaining agreements
that covered AMHS employees that required that employees
continue to get paid even if service had stopped.
Mr. McLaren stated there were some provisions for contracts
in the bid awards. He said that currently the bids had been
awarded through summer 2019. The bid cycle for the winter
had not started yet, but if ships were laid up then crews
would be needed to keep the vessels safe.
1:36:46 PM
Co-Chair Stedman asked about the standard timing for the
opening of the reservation system for the October through
winter timeframe.
Mr. McLaren stated that AMHS normally published the
schedule in July and August after a budget had been
approved.
Co-Chair Stedman asked whether reservations for October
sailings, and through the winter, were taken in July.
Mr. McLaren stated that the winter schedule (October
through April) was published in July and August for
booking.
1:37:53 PM
Senator Micciche asked whether there would be no state
funded way for people from Juneau to get vehicles to and
from Juneau to the road system; Juneau would be
disconnected for 9 months.
Mr. McLaren answered in the affirmative.
1:38:35 PM
Ms. Siroky thought it was important to recognize that the
scenario on Slide 6 was built in order to ensure that the
commitment had been met for travelers who had booked
sailings for summer 2019.
1:39:09 PM
Senator Wielechowski asked whether the ferry was used by
private businesses and if there could be an economic impact
as a result of the truncated sailing schedule.
Mr. McLaren affirmed that many businesses used the system,
and 4 percent of ferry traffic was commercial. Commercial
traffic included groceries and building supplies for
smaller communities.
Senator Wielechowski asked how businesses would ship good
and products from October through June if the ferries were
not operating.
Ms. Siroky stated that there were barge lines and freight
services that carried small amounts of goods and services
throughout Southeast Alaska.
Senator Wielechowski asked whether the other services were
comparable in cost and ran on the same timetables as the
AMHS.
Ms. Siroky said that she was not aware of the barge lines
scheduling. She recalled that the barge sailed weekly from
Belling ham. She expected that the cost of moving freight
and vehicles on with a commercial outfit would be more
expensive than the AMHS.
1:41:11 PM
Senator Bishop recalled that in years past there had been a
discussion about forward-funding for the system in order to
give certainty for the public.
1:41:42 PM
Co-Chair Stedman asked about the net deficit under the
governors proposed budget, which was approximately $27
million, and would need to be backfilled from the treasury.
He noted that the cost of mooring and tending ships laid up
in port was included in that deficit.
Mr. McLaren replied in the affirmative.
1:42:21 PM
Co-Chair von Imhof asked whether the $27 million net
deficit amount was listed in the governor's proposed
budget.
Mr. McLaren stated that the total budget of $45 million
included the cost. The department had been asked to provide
scenarios that honored the summer schedule. He said that
the department had looked at how much service could
continue to be provided, while making funds available to
keep the state assets safe through the winter.
Co-Chair von Imhof surmised that the governor was asking
the legislature to find the $27 million necessary to cover
the costs.
Mr. McLaren stated that the $27 million was the total cost
of the budget of $45 million, minus the revenue that could
be generated. The $27 million would essentially be the
state subsidy for the schedule on Slide 6.
1:44:34 PM
Senator Wielechowski had heard different data on how many
jobs would be lost through proposed budget cuts. He asked
how many AMHS jobs would be lost under the governors
proposal.
Ms. Siroky estimated that there would be 300 positions lost
if the proposed budget was implemented. She qualified that
the number did not include economic impacts to ports in
communities or to Vigor, the company in Ketchikan that
provided annual vessel maintenance.
1:45:51 PM
Co-Chair Stedman noted that Vigor operated the state
shipyard in Ketchikan and the AMHS was the anchor tenant.
1:46:20 PM
Mr. McLaren showed Slide 7, "Outsourcing Service":
Per the Collective Bargaining Agreements with the
vessel unions, service to the following ports could be
outsourced by the State with service to/from Sitka,
Juneau and Petersburg:
?Angoon
?Gustavus
?Kake
?Hoonah
?Tenakee
?Pelican
Mr. McLaren relayed that he had been asked to look at
possibilities for outsourcing service to certain
communities.
1:47:08 PM
Co-Chair Stedman noted that Angoon had no barge service or
airport. He stressed that all communities were not equal in
their ability to procure goods and services. He asked Mr.
McLaren to elaborate as to why the specific ports were
listed rather than all ports.
Ms. Siroky stated that the department had negotiated
outsourcing with the unions when the M/V LeConte was out of
service. The communities listed had been primarily served
by that vessel and the department had not approached the
issue with many other communities.
Co-Chair Stedman asked about other ports of call. He asked
if they would receive any service without the AMHS.
Ms. Siroky answered in the affirmative. It would not be
possible to outsource service to Haines, Skagway, Valdez,
or Kodiak.
Co-Chair Stedman asked if there was a termination date on
the arrangement, or if it would run in perpetuity.
Ms. Siroky did not know that there was an end date to the
specific outsourcing.
Mr. McLaren interjected that these were the ports listed in
the current collective bargaining agreements.
1:49:31 PM
Senator Bishop pointed out that there was no guarantee that
there would be an entity to outsource ferry service to.
1:49:50 PM
Senator Wielechowski asked whether there was any Public
Employees' Retirement System (PERS) liability that would be
incurred as a result of outsourcing.
Co-Chair Stedman explained that when entities were merged
or sold, it could trigger a pension liability. He relayed
the possibility that if the AMHS were shut down, the state
could incur a liability to the employees for vested
benefits that were not fully funded.
Ms. Siroky stated that there would be liability for
individuals vested in PERS. The state had a terminal leave
bank for individuals that were cashing out leave at the end
of state service. The department had not calculated the
potential costs.
Co-Chair Stedman asked whether the department would be
coming forward with a supplemental request in the future to
cover the liability.
Ms. Siroky did not know the answer to the question and
suggested that Department of Administration would best
answer questions about the liability.
1:51:54 PM
Senator Wielechowski asked whether it would be possible to
get an estimate of PERS withdrawal liability.
1:52:09 PM
Co-Chair Stedman asked about the potential termination
costs listed on Slide 6. He had found it would cost $77
million to cover the supplemental funds. He stated that
here were significant adjustments to make, relative to the
proposed budget, to keep the system viable.
1:54:08 PM
Senator Wielechowski asked whether the governors proposed
budget considered the expense of laying up vessels.
Mr. McLaren answered in the affirmative.
Senator Wielechowski asked for the amount.
Mr. McLaren repeated that it would cost $1.5 million per
year to store and maintain the vessels.
1:55:03 PM
Co-Chair Stedman wanted to look at scenarios to keep the
system going. He mentioned a study that would be complete
in late fall 2019 that would provide alternatives to the
system, but in the meantime, he wanted to focus on keeping
the AMHS viable.
1:55:45 PM
Mr. McLaren spoke to Slide 8, "Example Scenario 1 Potential
Outsourced Service Schedule":
?Sitka Angoon Hoonah Juneau
?One day per week, every other week
?Juneau Hoonah Angoon Sitka
?One day per week, every other week
?Juneau Gustavus Juneau
?One day per week, every other week
?Pelican and Tenakee
?One port call per month
1:56:43 PM
Mr. McLaren referenced Slide 9, "FY2020 AMHS Example
Scenario 1 - Add Oct-June Outsourcing Villages of SE
Panhandle":
Published summer schedule remains intact through the
end of August
September 1, 2019 through September 30, 2019, operate:
?Matanuska and Malaspina on their Bellingham and SE
Alaska runs
?Kennicott on the Bellingham Whittier Cross-gulf run
?Tustumena on the Homer-Kodiak/Aleutian Chain run
?Tazlina in Northern Lynn Canal
?Lituya from Ketchikan Annette Bay
?Outsourced Service to SE Villages three days, every
other week
Vessels in Layup: Chenega, Fairweather, Columbia,
LeConte, Aurora, Hubbard
October 1, 2019 through March 31, 2020, operate:
?Matanuska on the Bellingham run
?Tustumena on the Homer Kodiak Island and Cordova -
Valdez
?Tazlina in Northern Lynn Canal
?Lituya from Ketchikan Annette Bay
?Outsourced Service to SE Villages three days, every
other week
No service to Prince Rupert or Whittier
Vessels in Layup: Chenega, Fairweather, Kennicott,
Malaspina, LeConte, Columbia, Aurora, Hubbard
April 1, 2020, through June 30, 2020, operate:
?Matanuska and Malaspina on the Bellingham run
?Kennicott on the Juneau Whittier Cross-gulf run
?Tustumena on the Homer-Kodiak Island run with one
Aleutian Chain run
?Hubbard in Prince William Sound
?Tazlina in Northern Lynn Canal
?Lituya from Ketchikan Annette Bay
?Outsourced Service to SE Villages three days, every
other week
• No service to Prince Rupert
?Vessels in Layup: Chenega, Fairweather, LeConte,
Columbia, Aurora
This schedule provides 288.8 weeks of service,
including the outsourced service with a potential fare
box recovery rate of 50%.
Note: There will be gaps in service while the
vessels undergo their required annual COI
overhauls.
UGF: $41,605.9
DGF*: $47,358.9 (Revenues)
Motor Fuel Tax Fund: $3,617.1
CIP Receipts: $1,893.7
*Includes DOT&PF Support Services
Expenditure Authorization: $94,475.6
Generated Revenue: $47,358.9
Net Deficit Amount: ($47,116.7)
1:59:02 PM
Co-Chair Stedman queried the departments confidence in the
projected numbers on the slide.
Mr. McLaren stated he was confident with the numbers
reflected on the slide. He explained that the schedule had
been crafted to provide some service to all communities,
while simultaneously focusing on summer routes and ports
that generated the most revenue.
1:59:59 PM
Senator Bishop asked whether the numbers on Slide 9
included the funds to outsource.
Mr. McLaren affirmed that the numbers included the cost of
the outsource and the revenue off that service. He reminded
that the numbers were estimates.
Senator Bishop wondered about the Inner Island Ferry for
Prince of Whales Island.
Ms. Siroky affirmed that the Inner Island Ferry received a
subsidy of approximately $250,000 for its operation.
Co-Chair Stedman noted that the Inner Island Ferry had
regularly submitted their financials to OMB for review to
be sure that the state was getting a good return on
investment.
Co-Chair Stedman noted that there was a deficit of $47
million shown on Slide 9.
2:01:46 PM
Co-Chair von Imhof considered that the previous year, there
was $86 million UGF going to AMHS, and slide 9 showed $41
million UGF. She thought that even with cutting the UGF in
half, it would be helpful to have a table that reflected
ridership.
Mr. McLaren stated that upcoming slides would show
operating weeks and a side by side comparison.
Co-Chair Stedman wanted to know the increment going from
status quo to Scenario 1 and Scenario 2.
2:03:22 PM
Mr. McLaren reviewed Slide 10, " FY2020 AMHS Example
Scenario 2 Add Oct-June AMHS Operating to Villages of SE
Panhandle":
Published summer schedule remains intact through the
end of August
September 1, 2019 through September 30, 2019, operate:
?Matanuska and Malaspina on their Bellingham and SE
Alaska runs
?Kennicott on the Bellingham Whittier Cross-gulf run
?Tustumena on the Homer-Kodiak/Aleutian Chain run
?Tazlina in Northern Lynn Canal
?Lituya from Ketchikan Annette Bay
No service to Angoon, Tenakee, and Pelican due to
LeConte's required overhaul
Vessels in Layup: Chenega, Fairweather, Columbia,
Aurora, Hubbard
October 1, 2019 through March 31, 2020, operate:
?Matanuska on the Bellingham run
?Tustumena on the Homer Kodiak Island and Cordova -
Valdez
?Lituya from Ketchikan Annette Bay
?LeConte -Dayboat service to Northern Lynn Canal, SE
Panhandle, and Sitka
?No service to Prince Rupert or Whittier
?Vessels in Layup: Chenega, Fairweather, Kennicott,
Malaspina, Columbia, Aurora, Tazlina, Hubbard April 1,
2020, through June 30, 2020, operate:
?Matanuska and Malaspina on the Bellingham run
?Kennicott on the Juneau Whittier Cross-gulf run
?Tustumena on the Homer-Kodiak Island run with one
Aleutian Chain run
?Hubbard in Prince William Sound
?Tazlina in Northern Lynn Canal
?Lituya from Ketchikan Annette Bay
?LeConte -Dayboat service to SE Villages and Sitka
No service to Prince Rupert
?Vessels in Layup: Chenega, Fairweather, Columbia,
Aurora
This schedule provides 283.9 weeks of service with a
potential fare box recovery rate of 50%.
Note: There will be gaps in service while the
vessels undergo their required annual COI
overhauls.
UGF: $43,124.7
DGF*: $48,120.5 (Revenues)
Motor Fuel Tax Fund: $3,617.1
CIP Receipts: $1,893.7
*Includes DOT&PF Support Services
Expenditure Authorization: $96,756.0
Generated Revenue: $48,120.5
Net Deficit Amount: ($48,635.5)
2:04:43 PM
Mr. McLaren spoke to Slide 11, "Scenario Comparison,":
FY 2020Governor 2/13 Budget
July through August: Operate current published schedule
September: No service in SW Alaska, Prince William Sound,
Prince Rupert, and SE Alaska Villages
October through March: No Service
April through June: No Service
Service Weeks (incl. Outsourcing weeks): 84.8
Fare Box Recovery: 40 percent
Funding Sources: $21,825.8 UGF, $17,869.3 DGF, $3,617.1 Mtr
Fuel Tax, $1,893.7 CIP Rcpts, $45,205.9 Total
Net Deficit Amount ($27,336.6)
FY 2020 Example Scenario 1 - Add Oct-June - Outsourcing
Villages of SE Panhandle
July through August: Operate current published schedule
September: Some service to all ports
October through March: Some service to all ports except
Prince Rupert and Whittier
April through June: Some service to all ports except Prince
Rupert
Service Weeks (incl. Outsourcing weeks): 288.8
Fare Box Recovery: 50 percent
Funding Sources: $41,605.9 UGF, $47,358.9 DGF, $3,617.1 Mtr
Fuel Tax, $1,893.7 CIP Rcpts, $94,475.6 Total
Net Deficit Amount ($47,116.7)
FY 2020 Example Scenario 2 - Add Oct-June - AMHS Operating
to Villages of SE Panhandle
July through August: Operate current published schedule
September: No service to Angoon, Tenakee, and Pelican (Due
to LeContes required annual overhaul)
October through March: Some service to all ports except
Prince Rupert and Whittier
April through June: Some service to all ports except Prince
Rupert
Service Weeks (incl. Outsourcing weeks): 283.9
Fare Box Recovery: 50 percent
Funding Sources: $43,124.7 UGF, $48,120.5 DGF, $3,617.1 Mtr
Fuel Tax, $1,893.7 CIP Rcpts, $96,756.0 Total
Net Deficit Amount ($48,635.5)
2:07:14 PM
Co-Chair von Imhof observed that Scenario 1 had 5 more
service weeks at the cost of $2 million less UGF.
Mr. McLaren agreed. The difference of the two was that the
LeConte would be operating 7 days per week, the outsourcing
service would be operating 6 days per month.
Co-Chair von Imhof wanted to see how many service weeks
were currently in place, and the funding sources attached.
Mr. McLaren stated that the FY 19 budget included 345.9
service weeks at $86 million UGF.
2:08:41 PM
Mr. McLaren discussed Slide 12, "Example Scenario Route
Comparison Summer 2019 - Southeast," which showed two maps
of Southeast Alaska that had identical schedules:
Scenarios 1 and 2
Columbia (weekly round-trip)
Bellingham, Ketchikan, Wrangell, Petersburg, Sitka, Juneau,
Haines, Skagway
Malaspina (weekly round-trip)
Prince Rupert, Ketchikan, Wrangell, Petersburg, Kake,
Sitka, Juneau, Haines, Skagway
Kennicott (two-week round-trip)
Bellingham, Ketchikan, Juneau, Yakutat, Whittier, Chenega
Bay, Homer, Kodiak, Seldovia
Tazlina (dayboat 6 operating days per week)
Juneau, Haines, Skagway
LeConte (dayboat 7 operating days per week)
Juneau, Angoon, Tenakee, Hoonah, Gustavus, Pelican, Angoon
Lituya (dayboat 5 operating days per week)
Ketchikan, Annette Bay
2:09:21 PM
Mr. McLaren highlighted Slide 13, "Example Scenario Route
Comparison Summer 2019 -Southwest," which offered the
following scenarios:
Scenarios 1 and 2
Kennicott (two-week round trip)
Bellingham, Ketchikan, Juneau, Yakutat, Whittier,
Chenega Bay, Homer, Kodiak, Seldovia
Aurora (dayboat 7 operating days per week)
Whittier, Valdez, Cordova, Tatitlek
Tustumena (two-week round trip)
Homer, Seldovia, Kodiak, Port Lions, Ouzinkie, Old
Harbor, Chignik, Sand Point, King Cove, Cold Bay,
False Pass, Akutan, Dutch Harbor
2:09:33 PM
Mr. McLaren discussed Slide 14, "Example Scenario Route
Comparison Winter 2019/2020 -Southeast," which showed the
following scenarios:
Scenario 1
Malaspina (weekly round-trip)
Bellingham, Ketchikan, Wrangell, Petersburg, Kake,
Sitka, Juneau, Haines, Skagway
Tazlina (dayboat 4 operating days per week)
Juneau, Haines, Skagway, Hoonah, Gustavus
Lituya (dayboat 5 operating days per week)
Ketchikan, Annette Bay
Outsourced Service (6 trips per month)
Sitka, Angoon, Tenakee, Hoonah, Pelican, Gustavus,
Juneau
Scenario 2
Malaspina (weekly round-trip)
Bellingham, Ketchikan, Wrangell, Petersburg, Kake,
Sitka, Juneau, Haines, Skagway
LeConte (dayboat 7 operating days per week)
Juneau, Haines, Skagway, Hoonah, Gustavus, Pelican,
Angoon, Tenakee, Sitka
Lituya (dayboat 5 operating days per week)
Ketchikan, Annette Bay
Outsourced Service (6 trips per month)
Sitka, Angoon, Tenakee, Hoonah, Pelican, Gustavus,
Juneau
2:11:02 PM
Mr. McLaren turned to slide 15, "Example Scenario Route
Comparison Winter 2019/2020 - Southwest," and noted that
there was no difference between the two scenarios:
Scenarios 1 and 2
Tustumena (Cordova and Valdez twice per month)
Homer, Seldovia, Kodiak, Port Lions, Ouzinkie, Old
Harbor, Valdez, Cordova
2:11:43 PM
Co-Chair Stedman observed that the scenarios on Slide 15
showed service to Kodiak, Old Harbor, Cordova, and Valdez.
Mr. McLaren replied in the affirmative.
Co-Chair Stedman asked about the difference between the two
scenarios.
Mr. McLaren repeated that the scenarios were the same.
Co-Chair Stedman asked about out fisheries workers that
b=needed transportation further down the Aleutian Chain.
Mr. McLaren stated that the next slide would provide
further clarity. He noted that the system did not run to
that area in the winter months because the weather was
extreme and dangerous for sailing.
Co-Chair Stedman rebutted that the request was not being
made to run additional routes, only to salvage the service
that was already in place.
2:13:06 PM
Mr. McLaren moved to Slide 16, "Example Scenario Route
Comparison Summer 2020 -Southeast," which showed the
following run scenarios:
Scenario 1
Matanuska (weekly round-trip)
Bellingham, Ketchikan, Wrangell, Petersburg, Sitka,
Juneau, Haines, Skagway
Malaspina (weekly round-trip)
Bellingham, Ketchikan, Wrangell, Petersburg, Kake,
Sitka, Juneau, Haines, Skagway
Kennicott (twice per week)
Juneau, Yakutat, Whittier
Tazlina (dayboat 6 operating days per week)
Juneau, Haines, Skagway, Hoonah, Gustavus
Lituya (dayboat 5 operating days per week_
Ketchikan, Annette Bay
Outsourced Service (6 trips per month)
Sitka, Angoon, Tenakee, Hoonah, Pelican, Gustavus,
Juneau
Scenario 2
Matanuska (weekly round-trip)
Bellingham, Ketchikan, Wrangell, Petersburg, Sitka,
Juneau, Haines, Skagway
Malaspina (weekly round-trip)
Bellingham, Ketchikan, Wrangell, Petersburg, Sitka,
Juneau, Haines, Skagway
Kennicott (twice per week)
Juneau, Yakutat, Whittier, Chenega Bay
Tazlina (dayboat 6 operating days per week)
Juneau, Haines, Skagway,
LeConte (dayboat - 7 operating days per week)
Juneau, Hoonah, Gustavus, Tenakee, Angoon, Pelican,
Sitka, Kake
Lituya (dayboat 5 operating days per week)
Ketchikan, Annette Bay
Mr. McLaren noted that the chosen routes were high demand,
high income routes.
Co-Chair Stedman asked to keep in mind that the Prince
Rupert area had a rail system and had plans for a large
liquefied natural gas project in the future that would
create significant economic activity. He thought it would
be nice to have a port of call in Prince Rupert so that
workers and businesspeople could have access to the
economic development in that area. He thought access to
Prince Rupert and the rail would help to move fish from
Southeast Alaska. He did not want lose sight of the
economic activity coming to the area. He added that there
was a port there already that the state was struggling to
rebuild.
Ms. Siroky stated that all the scenarios all had the
dramatic change of not serving Prince Rupert. In the
departments attempt to bring forward a revenue maximizing
scenario, the choice had been made to drop service to
Prince Rupert. She said that money was saved in the Capital
Budget by dropping service to the area. She said that the
state had had some recent issues with operating in Prince
Rupert.
Co-Chair Stedman asked about the buying of American steel
and how it related to building out the port in the area. He
wanted to highlight the forthcoming economic activity in
the region and the possibility of that activity providing
jobs for Alaskans. He stressed that it would be unfortunate
for the state to miss out on the economic opportunity and
have the action of pinching pennies cost us dollars.
2:17:11 PM
Co-Chair Stedman pointed out that Angoon did not have barge
service or an airport. He thought that, depending on which
scenario was run, the community could be in a difficult
position. He stressed that the marine highway carried
hospital patients from that community to Sitka and Juneau;
limiting marine travel could negatively affect the cultural
practices of smaller communities.
2:17:56 PM
Mr. McLaren referenced slide 17, "Example Scenario Route
Comparison: Summer 2020 - Southwest," which showed the
Aleutian Chain run. The slide showed the example scenario
route comparison for both Scenarios 1 and 2. He said that
the Kennicott would come up from Juneau and then go to
Yakutat and Whittier and Chenega Bay. The Hubbard would
operate in Prince William Sound, Cordova, Valdez, and
Whitter. The Tustumena would operate between Homer and
Kodiak Island. The scenario also included an earlier
Aleutian Chain run to get fishing vessels and equipment to
those islands early in the fishing season. The scenarios
th
cut out on June 30 and a late run had been investigated to
get fishing vessels home later in the fishing season.
2:19:12 PM
Co-Chair Stedman noted that under both scenarios there was
some service out to the Aleutian Chain, Kodiak, and into
Prince William Sound, with modified services into
Southeast. He surmised that Prince Rupert would be without
service until the next budget cycle.
Mr. McLaren answered in the affirmative.
Co-Chair Stedman warned underestimating the popularity of
Alaskans wanting to go to Prince Rupert. He noted that
boarding in Prince Rupert required going through Canadian
customs, which could lead to drug smuggling intervention.
There were various angles and reasons why the people of
Southeast liked going through Prince Rupert.
2:20:23 PM
Senator Bishop asked whether the state had granted a
contract for the study.
Ms. Siroky stated that the department had announced an
"intent to award" and was in the 10-day protest period.
Senator Bishop asked how much the outsourced cost would be
to get from Angoon to Juneau.
Mr. McLaren responded that in the past the outsourced
providers had honored the systems current tariffs.
2:21:14 PM
Senator Wilson asked whether there were water taxis that
were traveling routes from Hoonah to Juneau.
Mr. McLaren did not know of one from Hoonah to Juneau. He
thought there was one from Haines to Skagway.
Ms. Siroky added that there were some businesses that moved
freight around but not a lot of passenger service.
Co-Chair Stedman stated that between Coffman Cove,
Wrangell, and Petersburg there had been two entities that
had tried to provide taxi service but had not been
successful. He thought there were life-safety issues to
consider.
Co-Chair Stedman reiterated that there was a significant
amount of funding in the capital budget that had been
redirected to other sources but could be moved in a future
budget if the marine highway were liquidated.
2:24:14 PM
Co-Chair von Imhof stated that because the ferry system was
so capital and operating budget intensive, and given the
inner play between the two budgets, any changes in the
funding of the system would require thoughtfully examining
the budgets considering every aspect of the system.
Co-Chair Stedman concluded that the legislature would make
an appropriation, and the administration would manage the
system. The legislature would not be selecting vessels of
routes but would be appropriating funds to be used by the
AMHS.
2:25:45 PM
Senator Olson asked whether there had been discussion about
air taxis picking up passenger traffic.
Ms. Siroky replied in the negative.
Co-Chair Stedman discussed housekeeping.
ADJOURNMENT
2:27:32 PM
The meeting was adjourned at 2:27 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 041019 2019 SFIN - AMHS - 04.10.19 - FINAL.pdf |
SFIN 4/10/2019 1:00:00 PM |
AMHS |
| 041919 AMHS-USCG Operating Vessel Crew.pdf |
SFIN 4/10/2019 1:00:00 PM |
AMHS |