Legislature(2023 - 2024)BUTROVICH 205
02/02/2023 01:30 PM Senate TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Alaska Department of Transportation and Public Facilities Alaska Marine Highway System | |
| Presentation: Alaska Marine Highway Operations Board (amhob) | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
SENATE TRANSPORTATION STANDING COMMITTEE
February 2, 2023
1:31 p.m.
MEMBERS PRESENT
Senator James Kaufman, Chair
Senator David Wilson, Vice Chair
Senator Löki Tobin
Senator Jesse Kiehl
Senator Robert Myers
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Rebecca Himschoot
COMMITTEE CALENDAR
PRESENTATION: THE ALASKA DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES ALASKA MARINE HIGHWAY SYSTEM
-HEARD
PRESENTATION: THE ALASKA MARINE HIGHWAY OPERATIONS BOARD
(AMHOB).
-HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record.
WITNESS REGISTER
KATHERINE KEITH, Deputy Commissioner
Office of the Commissioner
Department of Transportation and Public Facilities
Anchorage, Alaska
POSITION STATEMENT: Informed the committee about challenges
facing the Alaska Marine Highway System.
MATT MCLAREN, Business Development Manager
Marine Highway System
Department of Transportation and Public Facilities (DOTPF)
Ketchikan, Alaska
POSITION STATEMENT: Answered questions about the budget during
the overview of the Alaska Marine Highway System.
SHIRLEY MARQUARDT, Chair
Alaska Marine Highway Operations Board
Department of Transportation and Public Facilities (DOTPF)
Anchorage, Alaska
POSITION STATEMENT: Provided an overview of the Alaska Marine
Highway Operations Board.
WANETTA AYERS, Vice Chair
Alaska Marine Highway Operations Board
Department of Transportation and Public Facilities (DOTPF)
Juneau, Alaska
POSITION STATEMENT: Provided an overview of the Alaska Marine
Highway Operations Board.
CAPTAIN KEITH HILLARD, Board Member
Alaska Marine Highway Operations Board
Department of Transportation and Public Facilities (DOTPF)
Juneau, Alaska
POSITION STATEMENT: Spoke as an Alaska Marine Highway Board
Member.
CAPTAIN ED PAGE, Board Member
Alaska Marine Highway Operations Board
Department of Transportation and Public Facilities (DOTPF)
Juneau, Alaska
POSITION STATEMENT: Spoke as an Alaska Marine Highway Board
Member.
ACTION NARRATIVE
1:31:27 PM
CHAIR JAMES KAUFMAN called the Senate Transportation Standing
Committee meeting to order at 1:31 p.m. Present at the call to
order were Senators Wilson, Kiehl, Tobin, Myers, and Chair
Kaufman.
^Presentation: Alaska Department of Transportation and Public
Facilities Alaska Marine Highway System
PRESENTATION: ALASKA DEPARTMENT OF TRANSPORTATION AND PUBLIC
FACILITIES ALASKA MARINE HIGHWAY SYSTEM
1:32:29 PM
CHAIR KAUFMAN announced an overview from the Alaska Department
of Transportation and Public Facilities (DOTPF) related to the
Alaska Marine Highway System. He noted that the Alaska Marine
Highway System (AMHS) provides critical transportation
infrastructure for a segment of Alaskans living with limited
access. The system is facing tremendous challenges, which will
be detailed in today's meeting.
1:34:11 PM
KATHERINE KEITH, Deputy Commissioner, Office of the
Commissioner, Department of Transportation and Public
Facilities, Anchorage, Alaska, informed the committee about
challenges faced by the Alaska Marine Highway System.
MS. KEITH spoke about organizational changes within AMHS. She
acknowledged Captain John Falvey and his recent retirement from
the general manager position. Succession planning is underway
for multiple programs.
MS. KEITH reviewed slide 2: Alaska Marine Highway Operations
Board (AMHOB). Board members would participate in the hearing
later this afternoon. She noted she held the one appointed seat
existed on the board. The board was tasked to work with the
department to seek improvements across AMHS.
1:37:34 PM
CHAIR KAUFMAN recalled a statute passed in 2021 leading to
creation of the board. He asked about the department's progress
with short and long-term plans since the legislation passed.
1:38:10 PM
MS. KEITH replied that the board began meeting bi-weekly in
February 2022 and met regularly in-person. She initially served
as the board liaison until she transitioned to board member. She
announced concurrent planning efforts within the department. The
long-range comprehensive planning effort included the expertise
of a consultant. She expressed satisfaction with the established
long-range plan. The board identified goals and the work ahead
is significant.
1:40:10 PM
MS. KEITH discussed slide 3: AMHOB Topics of Purview.
• Operation and management of AMHS
• Business to enhance revenue and reduce costs
• Personnel management
• Commercial service options
• Ship maintenance, construction, and repair
• Fleet strategy
• Reliability
• Regulatory Compliance
• Other service objectives
1:40:51 PM
MS. KEITH reviewed slide 4: Alaska Comprehensive Evaluation.
• Task 1. Preliminary Survey and Project Work Plan
• Task 2. Operational Resiliency and Efficiency
Analysis
• Task 3: Information Technology Analysis
• Task 4: Fleet Maintenance Evaluation
• Task 5: Financial Vitality and Resiliency Analysis
MS. KEITH continued with slide 5: 50+ Interviews, 100+ Documents
Reviewed. She explained that the department staff sought
recommendations from ship, terminal, and engineering staff for
short and long-term improvements. Every vessel except the
Tustumena was visited and over 50 interviews were conducted. She
stated that four reports resulted. These reports would soon be
available to AMHOB, the department and the committee.
1:42:50 PM
CHAIR KAUFMAN expressed interest in the reports.
SENATOR TOBIN asked about quick wins.
MS. KEITH replied that quick wins include the labeling of
materials on board the vessels and the development of process
guides. She mentioned ongoing newsletters as another example of
a quick win.
1:44:37 PM}
CAPTAIN TONY KARVELAS, Acting Alaska Marine Highway System
General Manager, Juneau, Alaska spoke about the Alaska Marine
Highway System. He provided some personal and professional
history. He expressed his belief that AMHS was important to
Alaska and its people. He noted the value of the marine highway
in helping underserved communities.
1:47:08 PM
CAPTAIN KARVELAS addressed slide 7: Aging Fleet. He spoke about
the aging vessels and offered some history. He stated that the
Tustumena needed to be replaced as it operated on the open ocean
and was 58 years old. He noted that the Malaspina was sold to
the Ward Cove Group for future use as a crew training platform.
1:49:31 PM
CHAIR KAUFMAN asked if the new vessels were suitably reflective
of the fleet.
CAPTAIN KARVELAS replied in the affirmative.
1:49:47 PM
CAPTAIN KARVELAS discussed slide 8: Fleet Status. He
communicated that the vessels were in various stages of repair,
upgrade, overhaul, and service.
1:50:51 PM
SENATOR KIEHL asked about the use of the Malaspina as a training
vessel. He wondered if the vessel would travel or remain in Ward
Cove for training purposes.
CAPTAIN KARVELAS replied that he was working with the vessel
owners to compose a service contract. He was unsure about the
cost. He mentioned the standard equipment on vessels, which
provides an optimal training environment. He spoke to the
various credentialing requirements for work on the vessels.
SENATOR KIEHL appreciated the training options. He reminded the
committee that the state owned the Malaspina only eight months
ago.
CAPTAIN KARVELAS responded that the ships were expensive to
retain and maintain. The older a ship is, the more money it
costs to maintain. Retaining the ship is far more expensive than
the cost of a contract with the new owner for training purposes.
1:54:05 PM
SENATOR KIEHL requested a detailed comparison of the costs.
CHAIR KAUFMAN announced that Representative Himschoot entered
the room.
CAPTAIN KARVELAS continued with slide 9: Statistical
Information: Passengers. He pointed out that AMHS rolled out of
a labor strike and into a pandemic. He spoke to the displayed
upward trend and the resiliency of AMHS.
CHAIR KAUFMAN agreed that the short-term rebound was apparent,
however, the overall trend was downward. He wondered about
Southeast ridership and whether AMHS and the legislature were
properly reacting with route structure and ship design.
1:56:21 PM
CAPTAIN KARVELAS replied that the commissioner's office was
engaged in the proposed strategies regarding the needs of AMHS.
He noted additional support from AMHOB and the commissioner's
office.
1:58:02 PM
CHAIR KAUFMAN revisited the deregulation of the airline industry
in 1978. He believed that Alaska must think similarly to allow
the communities in need to receive the highest value at the
lowest cost.
CHAIR KAUFMAN asked about the changes and outreach mentioned. He
asked about reliable mechanisms to pull people into the system-
design conversations.
MS. KEITH replied that online tools existed to access
information and opinions in the form of public comment. She
stated that the amount of feedback received was extensive. She
acknowledged the challenge of making changes with the
information collected.
2:00:36 PM
SENATOR TOBIN commented about her experience living in rural
Alaska. She wished to see correlating data related to price and
route changes that might further explain the graph.
2:01:28 PM
CHAIR KAUFMAN suspected that the availability of air travel
might contribute to the findings.
MS. KEITH replied that changes in AMHS staff led to an eagerness
to meet the community needs. She looked forward to the
infrastructure investments coming through the Federal Transit
Administration. She informed the committee that AMHOB would meet
tomorrow.
2:03:10 PM
MS. KEITH asserted that AMHS wished to increase the system's
transparency. She referred to slide 11: Charting the Course
Toward Thriving Communities, Reimagining AMHS. The slide
depicted three phases: stabilization, recovery and full steam
ahead. She explained that AMHS was in the stabilization phase.
She noted the elimination of dynamic pricing based on several
complaints. Travel policies related to cancelations were
adjusted. Crew, budget, and fleet provided different components
of the stabilization phase.
2:05:58 PM
MATT MCLAREN, Business Development Manager, Marine Highway
System, Department of Transportation and Public Facilities
(DOTPF), Ketchikan, Alaska spoke about the AMHS budget. He
reviewed slide 13: Charting the Course Towards Thriving
Communities. He spoke to the budgetary concerns.
MR. MCLAREN referred to slide 14: CY24 Governor's Proposed
Operating Budget. He declared that spending costs were $143.8
million. The Infrastructure Investment and Jobs Act (IIJA) funds
were accounted for. The state match portion required further
committee efforts.
CHAIR KAUFMAN cited $285 million in infrastructure funds.
Mr. MCLAREN concurred. He continued with slide 15, FY2022
Operating Expenditures. He pointed to $106.4 million in
operating expenditures and $31.3 million in revenues. He
commented on the gradual recovery following the pandemic. He
anticipated better numbers for FY23.
SENATOR KIEHL asked for a breakdown of ticket versus vehicle
sales.
MR. MCLAREN replied that vehicle sales provide the primary
portion of revenue. He would provide the committee an accurate
breakdown.
2:09:27 PM
MS. KEITH continued with slide 17: FTA Awards Vessels. She
highlighted the Federal Transit Authority's award of $285.6
million.
Vessel Modernization$72 million award
• Columbia modernization
• Matanuskamodernization
• Tazlinaincreased route options
• Kennicottimproved environmental
considerations
Vessel Replacement Tustumena Replacement Vessel$68.5
million award
• Includes design updates of propulsion
system, for safer, more efficient, public
transportation
Design of a New Alaska Mainliner--$8.5 million award
Supports the early steps for capital replacement of a
mainliner for continued service to SE Alaska.
Climate Responsive Ferry Vessel Options$46 million
award Increase service, efficiency, and sustainability
of Alaska Ferry System for rural port communities.
CHAIR KAUFMAN commented that the long-term planning process is
still in progress.
MS. KEITH replied in the affirmative. She noted that clear needs
for the system overrode the need for a long-term plan. The
Tustumena replacement vessel had been in process before the
funding opportunity became available. She spoke about the plan.
She stated that the intensive design process would provide more
information. She mentioned the low-emission ferry and its
design. She discussed various plans for the upcoming projects.
2:14:19 PM
CHAIR KAUFMAN stressed that long-term planning was crucial to
success.
2:15:17 PM
SENATOR WILSON asked about the timeframe for the design of a new
mainliner and why $8.5 million was awarded for the design.
MS. KEITH replied that $8.5 million for the design of a new
mainliner was an approximation. The design for the Tustumena
replacement was approximately $13 million.
SENATOR WILSON asked for additional information about the $8.5
million design cost.
MS. KEITH offered to provide additional details to the
committee.
2:17:03 PM
MS. KEITH spoke to slide 18, "FTA Awards: Docks.
Ferry Dock Infrastructure in Five Rural Alaska
Communities- $45.5 million award
Increase the sustainability of five current rural AMHS
port operations, project will upgrade dock
infrastructure in Juneau and Cordova, and replace
current docks in Pelican, Tatitlek, and Chenega.
• Prince William Sound Dock
Modifications$29.3 million award
• Prince William Sound Economic
Development District is primary,
DOTPFPF&PF assisted in partnerships
• Tatitlek $10.5m
• Chenega $12.6m
• Cordova $6.2 million
2:17:45 PM
MS. KEITH continued with slides 19-20 quickly. The health of the
fleet was monitored with a good handle on the asset management
system. She reported a backlog of $159 million in maintenance
needs. The federal funding would address many of the needs.
2:18:43 PM
SENATOR WILSON asked about crew training. He wondered if all the
ships operate at the same time.
MR. MCLAREN responded that the current schedule did not have all
ships running. He explained that the challenge was not the
budget, but rather, the crew availability. He spoke about the
benefits of adding the crew quarters to the new ships. He
pointed out that the governor's budget provided for operation of
all ships. Required overhauls excluded some vessels from the
fleet temporarily.
2:20:13 PM
SENATOR WILSON asked if a training opportunity might be
available when a ship was overhauled. He expressed concern about
paying for contracts rather than utilizing ships undergoing
overhaul.
CHAIR KAUFMAN expressed interest in the equipment utilization
factor. The committee wished to understand the utilization
target.
2:21:30 PM
SENATOR KIEHL asked about the graph on slide 20: Cost per Vessel
by Urgency.
MS. KEITH described the graph, explaining that the items in red
displayed high priority items. The green and yellow referred to
those items requiring correction.
SENATOR KIEHL appreciated the slide and its depiction of the
urgent and lower-priority investment rankings.
2:23:34 PM
MS. KEITH discussed Slide 22: Engineering Process Goals. She
stated that engineers strive to adhere to a comprehensive work
plan.
MS. KEITH reviewed Slide 23: Crew Heath Check. She spoke about
forecasting crew shortage. She wished to be strategic and would
provide additional information later.
2:25:39 PM
SENATOR KIEHL asked about staffing needs related to vessel
pilots.
SENATOR TOBIN requested a data point for all workplace injuries.
She wondered about a correlation between injuries and deferred
maintenance costs.
MS. KEITH agreed to provide the information to the committee.
She spoke about a robust safety program within AMHS. She
responded to Senator Kiehl about staffing stating the goal of
joining an Embark program for acceptance of interns and cadets.
2:28:00 PM
SENATOR WILSON commented about the Alaska Vocational Technical
Center (AVTEC) training program in Seward. He hoped the program
was utilized for marine pilot training.
MS. KEITH concluded with slide 26, The last FUNtier. She
highlighted the focus on specific training needs while
remembering the "fun" aspect of traveling with the Alaska Marine
Highway System.
2:29:39 PM
CHAIR KAUFMAN noted that the committee is requesting additional
information with the purpose of improving the system. He
appreciated the department's cooperative approach.
2:31:02 PM
At ease
^Presentation: Alaska Marine Highway Operations Board (AMHOB)
PRESENTATION: ALASKA MARINE HIGHWAY OPERATIONS BOARD (AMHOB)
2:32:22 PM
CHAIR KAUFMAN reconvened the meeting and announced the Alaska
Marine Highway Operations Board presentation.
2:32:52 PM
SHIRLEY MARQUARDT, Chair, Alaska Marine Highway Operations
Board, Department of Transportation and Public Facilities
(DOTPF), Anchorage, Alaska, introduced herself.
WANETTA AYERS, Vice Chair, Alaska Marine Highway Operations
Board, Department of Transportation and Public Facilities
(DOTPF), Juneau, Alaska, introduced herself.
MS. MARQUARDT informed the committee about the time commitment
required for board participation.
2:35:47 PM
MS. MARQUARDT spoke about the changes in the advisory board
following the passage of House Bill 63. She spoke about the
intermodal plan. She pointed out the slow-moving process and the
dark place the system was in. She hoped that the new funding
opportunities would allow the planners in the department to
streamline the processes. She added that she saw the first
design of the Tustumena in 2006 and it was not yet operational.
She saw the absence of a long-range plan as the reason for slow
progress. She pointed out the absence of a vessel replacement
framework. She mentioned that British Colombia built ships in
two years. She spoke about shifting management decisions based
on annual operating and maintenance budgets. The budgets provide
one year of certainty for scheduling routes, maintenance, and
personnel.
MS. MARQUARDT expressed concern about ongoing crisis management
with vessels, maintenance, engineering team, and crew
availability. She added the issue of significantly low
systemwide morale. With no vessel replacement plan in place,
critical crew, management, terminal operators and engineers are
looking elsewhere, and there are positions open in every
maritime industry in the country.
2:41:26 PM
MS. MARQUARDT relayed that AMHS requires experienced, strong,
and focused leadership to utilize the future long-range plan.
She spoke about matching funds from the state being critical to
the sustainability of the system. Timing is critical. She
highlighted the importance of system stabilization. The board
strongly encouraged matching funds for IIGA grants that fit in a
long-range plan for AMHS.
2:43:45 PM
MS. AYERS stated that she and Ms. Marquardt both served on
various bodies related to AMHS over the years. She saw AMHS as a
critical symbol of the state. She believed that AMHS provides a
critical intermodal transportation link. She noted that the
system was in a time of challenge and opportunity. She hoped to
address the challenges, however, the stabilization efforts are
paramount. She clarified that a long-term plan was necessary to
define the components of the system. She spoke about the
consistent measurements of success.
2:48:38 PM
CHAIR KAUFMAN reviewed House Bill 63 and the creation of the
board providing AMHS expertise. He spoke about the effective
language in the bill and wondered if the legislature might offer
further improvement.
MS. AYERS replied that the board was in the process of forming,
storming, and norming processes. She noted the period of
challenge and opportunity with a quick procession. She believed
that the bill's intentions were well-understood; however, the
legislature's level of resources and responsiveness presented
challenges. She mentioned the board meeting tomorrow in Juneau.
A legislative report would follow the meeting.
2:52:16 PM
SENATOR MYERS expressed concern about the initial decision to
establish a one-year plan before the establishing a long-term
plan.
MS. MARQUARDT replied that the long-range planning process was
new to the staff. The board shared his concerns. She pointed out
that the new board members required significant education and
preparation during the initial meetings last year. She credited
the board with initiating the process of long-range planning in
October of 2022. The plan will be incorporated into the upcoming
board report for the legislature. She spoke about the importance
of short-term needs limited by information the board of
volunteers receive. She spoke about the agency's practices and
their relation to board practices. She mentioned succession
planning for the general manager position. She noted that the
board must work in partnership with the department to formulate
recommendations for AMHS.
2:57:33 PM
SENATOR KIEHL asked about AMHOB operation costs, maintenance
needs, and inventories.
2:58:42 PM
MS. AYERS replied that the board made progress obtaining
information in advance. She revisited Senator Myers's question
and spoke about the board and department's parallel paths. She
hoped to think more strategically. She agreed that the board and
the department encountered friction regarding the availability
and timeliness of information sharing. She hoped that system
measurement and management would become the board's focus. She
spoke about recent board discussions related to Cascade Point.
3:01:47 PM
SENATOR KIEHL made a card game analogy.
SENATOR TOBIN wondered about House Bill 63 and the board's
recommendations. She asked if the report would include those
recommendations.
MS. MARQUARDT replied yes. She noted the gravity of
responsibility placed on each board member because of the
passage of House Bill 63. She responded to Senator Kiehl about
the board's request for more information from AMHS in Ketchikan.
The Ketchikan team arrived at various long-range plans but did
not have the authority to proceed.
3:04:13 PM
CHAIR KAUFMAN clarified that the department's short-term plan
addressed the long-term vision and goals. He mentioned the
bill's allowance for corrective action reports. He added the
bill's requirement for core competencies and the creation of a
self-improving board. Competency gaps must be stated in reports.
3:06:08 PM
At ease
3:06:48 PM
CHAIR KAUFMAN reconvened the meeting.
CAPTAIN KEITH HILLARD, Board Member, Alaska Marine Highway
Operations Board, Department of Transportation and Public
Facilities (DOTPF), Juneau, Alaska, spoke as an AMHOB member and
Juneau resident. He spoke about the system's history and recent
congressional efforts. He stated that AMHS desperately needed
two new mainliners. Vessels must be interchangeable. He spoke
about various vessels and stressed the need for additional ferry
boats. He read about the disruption to marine travel and the
essential economic and medical needs of the various communities.
3:08:33 PM
CAPTAIN HILLARD stressed that the system needed new vessels. He
highlighted the key challenges for the regions.
CHAIR KAUFMAN responded that the committee thoroughly understood
the issue of need.
3:10:03 PM
CAPTAIN HILLARD spoke about the lack of crew and problems moving
forward. He spoke about the short and long-term planning
efforts. He encouraged assessing the short-term plan first.
3:10:55 PM
CAPTAIN ED PAGE, Board Member, Alaska Marine Highway Operations
Board, Department of Transportation and Public Facilities
(DOTPF), Juneau, Alaska testified about AMHOB. He expressed
concern about AMHS and was happy to serve on the board. He
talked about his time serving around the world and viewing
various methods of operation.
3:13:26 PM
CHAIR KAUFMAN thanked Captain Page.
CAPTAIN HILLARD commented on the budget request of $25 million
for upgrades, crew quarters, and a galley for the Tazlina.
3:14:40 PM
There being no further business to come before the committee,
Chair Kaufman adjourned the Senate Transportation Standing
Committee meeting at 3:14 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| 2.2 DOTPF AMHS Overview.pdf |
STRA 2/2/2023 1:30:00 PM |
|
| DOTPF Follow Up to Committee - Answers to Questions.pdf |
STRA 2/2/2023 1:30:00 PM |
Follow Up |
| DOTPF Follow Up to Committee - Combined Supporting Docs.pdf |
STRA 2/2/2023 1:30:00 PM |
Follow Up |