Legislature(1997 - 1998)
02/18/1997 01:40 PM Senate TRA
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SENATE TRANSPORTATION COMMITTEE
February 18, 1997
1:40 p.m.
MEMBERS PRESENT
Senator Jerry Ward, Chairman
Senator Gary Wilken, Vice Chairman
Senator Lyda Green
MEMBERS ABSENT
Senator Rick Halford
Senator Georgianna Lincoln
COMMITTEE CALENDAR
Presentation of Findings: Senate Task Force of the Alaska Marine
Highway System
SENATE BILL NO. 21
"An Act relating to ferries and ferry terminals, establishing the
Alaska Marine Highway Authority, and relating to maintenance of
state marine vessels; and providing for an effective date."
- HEARD AND HELD
SENATE JOINT RESOLUTION NO. 12
Relating to reconstruction and paving of the Alaska Highway.
- HEARD AND HELD
PREVIOUS SENATE ACTION
No previous Senate action to record.
WITNESS REGISTER
Senator Taylor, Chairman
Task Force on the AMHS
State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Presented findings of AMHS Senate Task Force.
John Hunnewell, Chief Engineer
Matanuska
Alaska Marine Highway System
Seattle, Washington
POSITION STATEMENT: Discussed concerns with the AMHS management.
Tom Moore, Second Mate
Taku
Alaska Marine Highway System
PO Box 9317
Ketchikan, Alaska 99901
POSITION STATEMENT: Discussed concerns with the AMHS management.
Leif Jenkinson, Deckhand
Alaska Marine Highway System
Patrolman, Inland Boatman's Union
PO Box 6300
Ketchikan, Alaska 99901
POSITION STATEMENT: Stated that the IBU was neutral on SB 21, but
discussed concerns with the AMHS.
Ed Marksheffel, Chief Purser
Taku
Alaska Marine Highway System
PO Box 9324
Ketchikan, Alaska 99901
POSITION STATEMENT: Discussed zoning scheduling problems.
Lew Williams, Retired Journalist
755 Grant
Ketchikan, Alaska 99901
POSITION STATEMENT: Discussed the need for new AMHS management.
Stephanie Rainwater, Second Steward
Alaska Marine Highway System
926 Jackson
Ketchikan, Alaska 99901
POSITION STATEMENT: Discussed the IBU Labor Management Advisory
Board recommendations and rejections.
Andrea Barkley
Alaska Marine Highway System
PO Box 1037
Ward Cove, Alaska 99928
POSITION STATEMENT: Discussed the closure of the bars.
John Ritterbach, Senior Assistant Purser
Alaska Marine Highway System
PO Box 9420
Ketchikan, Alaska 99901
POSITION STATEMENT: Discussed problems with the AMHS.
Will Petrich, Relief Mate
Alaska Marine Highway System
280 Bunchberry Lane
Ketchikan, Alaska 99901
POSITION STATEMENT: Discussed the reservations system.
Eric Gucker, Steward
Alaska Marine Highway System
PO Box 8073
Ketchikan, Alaska 99901
POSITION STATEMENT: Discussed concerns with the current AMHS.
Bob Pickrell
8339 Snug Harbor Lane
Ketchikan, Alaska 99901
POSITION STATEMENT: Discussed the Hickel Administration's attempts
with the Marine Highway Authority.
Mayor Jack Shay
Ketchikan Gateway Borough
344 Front Street
Ketchikan, Alaska 99901
POSITION STATEMENT: Discussed the AMHS.
Stan Hjort
Petersburg Transportation Committee
PO Box 828
Petersburg, Alaska 99833
POSITION STATEMENT: Agreed with previous testimony.
Senator Randy Phillips
State Capitol
Juneau, Alaska 99801-1182
POSITION STATEMENT: Discussed SJR 12.
John Cormie, Deputy Minister
Community and Transportation Services
Yukon Government
Canada
POSITION STATEMENT: Reviewed the history of the Shakwak agreement.
Robin Walsh, Director
Transportation Engineering
Yukon Government
Canada
POSITION STATEMENT: Answered questions.
ACTION NARRATIVE
TAPE 97-4, SIDE A
SB 21 ALASKA MARINE HIGHWAY AUTHORITY
Number 001
CHAIRMAN WARD called the Senate Transportation Committee meeting to
order at 1:40 p.m. and introduced SB 21 as the first order of
business before the committee and invited Senator Taylor to come
forward and report the findings of the Senate Task Force on the
Alaska Marine Highway System.
SENATOR TAYLOR , Chairman of the Senate Task Force on the Alaska
Marine Highway (AMHS), informed the committee that the task force
held hearings in Ketchikan, Seward, and Sitka. He noted that the
report includes testimony, letters, and other documents forwarded
to the task force. Senator Taylor read the report into the record:
Based upon the written and oral testimony, the Senate Task Force on
the Alaska Marine Highway System, has identified several key
management policies and decisions the Task Force feels are
representative of the type of policies that bring the current
management of the AMHS into question.
Current management practices have resulted in a growing lack of
confidence in the Alaska Marine Highway System on the part of
elected officials and the general public they represent.
It is the recommendation of the Senate Task Force on the Alaska
Marine Highway System that the Twentieth Alaska State Legislature
consider moving AMHS management from DOT/PF to a semi-autonomous
Marine Highway Authority.
The key issues examined by the Task Force include:
*Arbitrary and repeated changes in the days crew rotate on the
fleet. The decisions are estimated to have cost the system
more than $250,000 in unnecessary overtime and other expenses.
*Scheduling and passenger fare policies that discourage
ridership, despite constant recommendations from the
communities served by the system and from the crews and line
officers who are responsible for the actual operation of the
fleet.
*A reservations system that has been an abject failure and
what appear to be a wasted attempt to computerize vessel
maintenance.
*The decision to close the cocktail bars and eliminate a
revenue source. This came despite recommendations from the
employee/management committee which would have led to the same
cost savings without elimination of the revenue generating
positions and the passenger service connected with operation
of the bars.
*Continued additions to the staff at the Juneau Central
Office, despite a strong and critical public perception that
AMHS management is already top heavy.
As a side note, Senator Taylor stated that the bar closure also
impacts the revenue of food and other beverages. When the bars are
open more food, snacks, and other items are sold. Further Senator
Taylor informed the committee that in comparison to now in 1977,
one more vessel was running with more trips per boat per year and
several more employees on the system. In 1977, AMHS operated with
17 people and Bill Hudson. Currently, there are about 155 full-
time employees in Juneau. Senator Taylor believed that the AMHS is
in trouble. By moving the AMHS management to a more professional
group of managers with some tenure within the system, with
continuity and historic perspective, the AMHS management should
stabilize.
Number 125
JOHN HUNNEWELL , Chief Engineer of the Matanuska, reiterated the
growth of the shoreside management of the AMHS. Mr. Hunnewell
cited the lack of maritime background in the senior management as
a major concern. He did not understand why input from the senior
officers from the vessels seem to be ignored. For example, the
marine engineering department solicits crew input which is then
ignored and then there is a problem. Mr. Hunnewell pointed out
that most projects can utilize federal funds, but if the input is
ignored and future problems arise - state funds must be used for
the upgrade or improvement.
SENATOR WILKEN inquired as to what a Chief Engineer does on AMHS.
JOHN HUNNEWELL clarified that he was the engineer out of the engine
department and is responsible for all the mechanical equipment
aboard the vessel. The Chief Engineer is the second most senior
officer and he reports to the Master directly.
SENATOR GREEN asked if anyone testifying would be in harms way.
CHAIRMAN WARD replied, no.
Number 200
TOM MOORE , Second Mate on the Taku, addressed the changes in the
days crew rotate. It costs the state $25,000 per ship per day
every day that the crew rotation is changed. These changes reflect
that the management has no consideration for passengers and crew.
Such changes in the crew rotation result in overtime pay for the
crew working and regular pay for the crew that is being short
changed in their work day. This change in crew rotation also
effects the credibility of the state. Mr. Moore stated that the
AMHS has lacked stability in the last few years. Since Director
Ayers left the AMHS, the system has been in "a death spiral." The
system directly reflects upper management, the commissioner and
director. He said that the department heads' hands are tied most
of the time. Mr. Moore echoed comments regarding the increase in
shoreside management staff over the years. Since the zone system
has been implemented there has been a decrease in travelling paying
customers and services, while costs have increased. It is an
inconvenience for passengers to have to change ships as well as the
schedule which stops in major towns in Southeast Alaska after
business hours. Local economies are effected by such scheduling.
The closure of the bars on the ferries was a slap in the face to
the public. The IBU was told by the director that the bars could
remain open if a cost effective alternative was presented, however
the bars were closed. Mr. Moore cited other examples of problems
with the system such as the ferries following each other around
Southeast Alaska and the lack of service to Petersburg. Further,
elder hostel groups are given a reduced rate for passage, state
rooms, and food while Alaskans are not given such. Mr. Moore
believed that those in Southeast Alaska have valid grounds for a
lawsuit against the Administration, DOT/PF, and AMHS for the
misappropriation of public funds and fraud. These people are doing
the exact opposite of the purpose of their positions: to serve the
people and make transportation easier for people travelling in
Alaska. Mr. Moore indicated that the Malaspina - Goldbelt
connection should be reviewed in depth.
Number 309
LEIF JENKINSON informed the committee that he was a 13 year
Deckhand with the AMHS and three and one-half years as Patrolman
with the IBU. The IBU remains neutral on SB 21. However, Mr.
Jenkinson pointed out that the present problems with the AMHS are
so long standing and severe that extraordinary efforts would be
required to solve them. This does not seem possible under the
present organization. Further, the IBU believes that the Marine
Highway Authority would not create another layer of bureaucracy.
Mr. Jenkinson informed the committee that Commissioner Perkins had
stated that it would be counter productive for the AMHS to compete
for funds with other statewide transportation needs. Currently,
AMHS cannot compete because those who make the ultimate decisions
are all road and airport engineers and builders. Perhaps, an
authority would create equity for marine transportation. Mr.
Jenkinson acknowledged that there are good people working for the
AMHS in Juneau, however they must not be making the decisions. The
IBU believes that the AMHS fleet could run at or beyond capacity
for a full year, bringing in a much higher percentage of its
operating cost while providing better service.
ED MARKSHEFFEL , Chief Purser aboard the Taku, addressed zoning
scheduling which has been a problem for the Taku. Mr. Marksheffel
said that his traffic reports would support that assertion. For
example, one day last June only 38 people and 12 vehicles came into
Juneau by the ferry; this is the busy season. The proposed
authority may solve the scheduling problems. In response to
Chairman Ward, Mr. Marksheffel said that he had been with the
system for 30 years.
SENATOR TAYLOR asked Mr. Marksheffel if he had any information
regarding the cost of crew shift change days. ED MARKSHEFFEL said
that he had forwarded that information to Mr. Moore, but offered to
forward it to the committee.
Number 373
LEW WILLIAMS , Retired Journalist, informed the committee that he
was one of the founders of the Southeast Conference in the 1950s
which promoted a bond issue to begin the ferries. Mr. Williams
said that he had listened to the crew's complaints over the years.
Mr. Williams noted that he had written a letter to Mr. Hayden and
had spoken with him regarding some of the complaints. Mr. Williams
emphasized the need for better management which SB 21 offers.
Mr. Williams informed the committee that he had served on the Board
of Governors for the Alaska Bar Association, the Alaska Judicial
Council, and currently serves on the Board of Regents for the
University of Alaska. All those organizations are operated by
boards and the board members have overlapping terms which allows
continuity. Usually, the president or executive director is hired
based on experience. Those organizations, albeit not perfect, are
better organized than the AMHS. Mr. Williams pointed out that the
need for better management is critical due to the upcoming
negotiations in 1999, for many of the labor contracts. During that
time, there will be another election which may result in much
change in the AMHS management who will be facing these employee
negotiations. Mr. Williams believed that the Advisory Committee of
Mayors with whom Mr. Hayden serves does not provide any continuity.
In conclusion, Mr. Williams said that he would forward a copy of
his letter to Mr. Hayden and his responses.
SENATOR TAYLOR noted that the crew rotation costs were in the
report and he requested that if Mr. Marksheffel and Mr. Moore had
any supplemental information to forward it to the committee.
Number 433
STEPHANIE RAINWATER , Second Steward, informed the committee that
she has been an employee of the AMHS since 1987. The IBU Labor
Management Advisory Board was formed in the summer of 1996 in order
to open lines of communication between the AMHS administration and
ferry employees. The intent was to work together to find solutions
to the revenue problem. The ensuing meetings of the advisory board
discussed the procurement cost savings of the purchase of food,
paper products, janitorial supplies, laundry service, soda pop and
candy. The suggestions would result in a savings of $100,000 in
food in the first year alone. Increasing the hours of the
cafeteria and the gift ship were suggested. A shadow training
program for upper management was suggested in order to eliminate
overstocking of the storeroom. Ms. Rainwater reviewed other
suggestions from the advisory board which would have resulted in no
cost to the state for implementation and offered an immediate
increase in revenue. All the cost savings measures were found to
be unacceptable and that positions must be cut. Reluctantly, the
labor committee worked out a job sharing concept, but the proposal
was rejected and the bars were closed.
Ms. Rainwater pointed out that the management crew meeting on the
Columbia in November of 1996 revealed the depth of the deception.
At that meeting, Mr. Hayden stated to the crew that the bar closure
was a nonnegotiable item long before the labor management meetings.
Further, Mr. Hayden stated that the suggestions for job elimination
would be used to offset the coming year's budget cuts. Why would
labor ever cooperate with this management after this? Ms.
Rainwater recommended that a major restructuring of the
administration and management of the AMHS is necessary this
legislative session. Ms. Rainwater submitted a resolution of
support, 9709, for SB 21 from the Ketchikan Indian Corporation.
She urged support and passage of SB 21. In response to Senator
Ward, Ms. Rainwater agreed to forward the resolution.
ANDREA BARKLEY , employee of the AMHS, said that she would be
addressing the closure of the bars. She was a bartender for the
AMHS for 18 years until the closure of the bars. The closure of
the bars was never about the loss of revenue which the following
points will indicate. First, the employee position savings did not
occur because that employee was placed elsewhere on the same ship
and crew. No employee cost was saved, only revenue was lost.
Further, Mr. Hayden told the IBU that if solutions resulting in the
same cost saving could be presented the decision to close the bars
would be reconsidered. Second, the IBU held extensive labor
management meetings which offered many suggestions to increase bar
revenue. All suggestions were ignored. The Matanuska implemented
the suggestions without management direction and experienced an
increase in revenue in the bar. The Juneau office was not
interested in this. Third, the state announced that the Columbia
bar did make money and would remain open. However as soon as the
bars on the other vessels were closed, the hours on the Columbia
bar were decreased to six hours a day. What businessman worried
about losing money, would close down the only profitable business
venture for half the hours? Alaskans and visitors want the
cocktail services on the AMHS open. Ms. Barkley informed the
committee of the 658 comment cards requesting that the bars reopen.
Only nine comment cards have been received in support of the
closure of the bars. The AMHS management is refusing a mandate of
the people. If SB 21 does not pass this legislative session, the
AMHS will not survive. Ms. Barkley urged support of SB 21 and
thanked the task force for their work.
Number 532
JOHN RITTERBACH , Senior Assistant Purser on the Matanuska, did not
foresee a future for the AMHS under the present administration. He
supported SB 21 and stressed the need to act now. The management
of AMHS is inept with little or no maritime experience. Leaders
with experience are needed. In order to grow and prosper in times
of economic shortage, more must be done with less; more reasons for
the public to use AMHS should be offered not increased prices with
reduced service. Mr. Ritterbach emphasized that more revenue could
be generated with reduced appropriations by providing the public
with a reliable service at a reasonable price. In comparison to
the AMHS, the Canadian system has lower prices with better onboard
services and a user-friendly schedule. Mr. Ritterbach said that
price, poor scheduling and lack of service have resulted in the
lack of revenue. Management is top heavy. For example, during the
winter reduction the number of employees at the Juneau central
office almost equal the number of employees working on all three
ships in use. About 60 percent of ship employees lose their jobs
in the winter months. It takes an new employee hired in the IBU
about six years to become a year round full-time employee, however
the employees of the Juneau central office are year round full-time
employees from the beginning. He believed the Juneau central
office staff should be reduced by 30 percent or more. Mr.
Ritterbach recommended that people look at the nice offices and
terminals that support the shabby ships. Mr. Ritterbach discussed
the Malaspina and its lack of maintenance that has resulted in its
current situation. The Malaspina could be used and produce revenue
while SOLAS upgrades are being made. In closing, Mr. Ritterbach
urged the support of SB 21 in order to abide by the AMHS motto, "A
proud tradition."
WILL PETRICH , Relief Second and Third Mate, said that the
reservations system has been a failure.
TAPE 97-4, SIDE B
An inhouse reservation system is by its very nature, limiting. No
public carriers rely on an inhouse reservation system. The $1.5
million on this inept inhouse reservations system could be used to
keep the vessels running. This is merely another example of cause
and effect of the lack of professional maritime competence of the
administration. Mr. Petrich believed the only solution at this
time is a ferry authority. He mentioned that issues of
reservations, scheduling, and yard layup are intertwined. The
issue is the present dysfunction of the management of the AMHS;
there is no accountability in the present administration. Mr.
Petrich believed that the present AMHS administration is unwilling
and incapable of change and therefore, he urged support of SB 21.
Number 566
ERIC GUCKER informed the committee that he was a third generation
Alaskan and Steward on the AMHS for over nine years. He said that
the reservations system is a problem. As far as Mr. Gucker knew,
every other transportation business in Southeast Alaska has
increased revenues. It makes no sense that the AMHS is
experiencing a loss in revenues. With regard to the computers,
less efficiency and increases in the Juneau staff have resulted.
Mr. Gucker discussed the ill communication between the employees
and management as well as the lack of administrative support.
There should be a positive forum for the exchange of ideas. As a
steward, Mr. Gucker pointed out that many beer bottles and liquor
bottles are gathered from staterooms at every port. This
exemplifies the loss of revenue from the closure of the bars.
Further, other staff is left to deal with the drinking instead of
a bartender with experience regulating problem drinkers. He
mentioned that scheduling is a problem and has resulted in the
Prince of Wales ferry concept.
Mr. Gucker emphasized that the AMHS brings in approximately 65
percent of its operating revenue. No hard link road in Alaska
brings in any money for its operation. There have been numerous
studies that all report that the administration of the AMHS is top
heavy. He identified the bureaucratic nature of the AMHS as the
main problem. Mr. Gucker supported any effort to bring management
and workers together.
BOB PICKRELL informed the committee that his first involvement wit
the AMHS was during the first Hickel Administration when he was
contracted to do a survey. He was on Governor Hickel's MHS Task
Force in 1991 whose primary mission was to gain support for the
Marine Highway Authority. Mr. Pickrell forewarned the committee
that the biggest opposition would come from the bureaucrats, the
commissioners. Mr. Pickrell was in support of SB 21. The present
system will not take care of the problems. Mr. Pickrell emphasized
that the AMHS is a highway which should be subsidized as any other
highway in the state.
Number 489
MAYOR JACK SHAY , Mayor of the Ketchikan Gateway Borough, reviewed
the proposals and resolutions of the Ketchikan Gateway Borough over
the past years. Most recently, the Ketchikan Borough Assembly will
be considering SB 21. Mayor Shay had no doubt that the measure
before the borough would pass. Mayor Shay pointed out that when
the Wickersham was running, it was operated under a separate
authority. That system worked well and could be analogous to this
situation.
CHAIRMAN WARD requested that Mayor Shay forward the resolution that
would be before the Ketchikan Borough Assembly.
STAN HJORT , Petersburg Transportation Committee, informed the
committee that he had been a marine engineer for the AMHS for 15
years and an unlicensed oiler the 12 years prior. All the
employees that spoke today have identified the problems. Mr. Hjort
proposed that a certain amount of crude oil be swapped for finished
diesel oil at a reduced price for any state diesel vehicle.
SENATOR TAYLOR said that Mr. Hjort's proposal would be reviewed.
CHAIRMAN WARD said that he intended to hold SB 21 and take
testimony from the Administration at the next hearing of the bill.
A fiscal note has not been received. He noted Commissioner Perkins
and Director Haydens presence.
SJR 12 CONSTRUCTION OF ALASKA HIGHWAY
Number 425
CHAIRMAN WARD introduced SJR 12 as the next order of business
before the committee.
SENATOR RANDY PHILLIPS thanked the committee for SJR 12 which
requests $94 million for the completion of the
reconstruction/repavement to the Shakwak project. Senator Phillips
pointed out that the Shakwak project is highlighted in the blue on
the map in the committee packet.
JOHN CORMIE , Deputy Minister for Community and Transportation
Services with the Yukon Government, referred the committee to the
1977 agreement signed by Canada and the U.S. which resulted in the
Shakwak agreement. That agreement provided for the reconstruction
of the Haines Road from Haines, Alaska to Haines Junction, Yukon
and the Alaska Highway from Haines Junction north to the border
near Beaver Creek. The provision of that agreement was that the
right-of-way and the materials for construction would be provided
by the federal government of Canada while the construction funds
would come from the U.S. Over the past 20 years, much of the work
has been done; however, the center portion has not been completed.
Mr. Cormie said that the U.S. government would be encouraged to
provide the funding for the completion if the project is to be
continued. There are safety benefits with this construction
project. Mr. Cormie noted that tourists are the main source of
traffic and Alaska and the Yukon jointly market tourism.
Therefore, any improvement to that highway would be an asset to the
Yukon as well as Alaska. Mr. Cormie also mentioned that Alaska
does utilize this highway for commercial traffic as well.
CHAIRMAN WARD asked how many bridges were part of this section.
ROBIN WALSH , Director of Transportation Engineering, said that
there are five major bridges in this section. The White River
bridge is under construction and will be completed next year. The
remaining four bridges are a future phase of the project. The main
intent is to get the road surface reconstructed to a modern
standard.
SENATOR RANDY PHILLIPS commented that the intent is to pass SJR 12
before the annual legislative exchange.
CHAIRMAN WARD thanked everyone for their testimony and announced
that SJR 12 would be held until the next committee meeting when it
would be forward to the next committee of referral.
There being no further business before the committee, the meeting
was adjourned at 2:55 p.m.
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