Legislature(2007 - 2008)BUTROVICH 205
02/20/2007 01:30 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| Overview: Alaska State Railroad | |
| 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 20, 2007
1:42 p.m.
MEMBERS PRESENT
Senator Albert Kookesh, Chair
Senator John Cowdery, Vice Chair
Senator Donny Olson
Senator Bill Wielechowski
Senator Gary Wilken
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
Overview: Alaska State Railroad
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
Pat Gambell, President and Chief Executive Officer
Alaska Railroad Corporation
PO Box 107500
Anchorage, AK 99510-7500
POSITION STATEMENT: Presented overview
Bill O'Leary, Chief Financial Officer
Alaska Railroad Corporation
PO Box 107500
Anchorage, AK 99510-7500
POSITION STATEMENT: Participated in overview
ACTION NARRATIVE
CHAIR ALBERT KOOKESH called the Senate Transportation Standing
Committee meeting to order at 1:42:08 PM. Present at the call to
order were Senators Wielechowski, Cowdery, Wilken, Olson, and
Chair Kookesh.
^OVERVIEW: ALASKA STATE RAILROAD
CHAIR KOOKESH announced the committee would hear an overview of
the Alaska Railroad.
PAT GAMBELL, President and Chief Executive Officer for the
Alaska Railroad Corporation (ARC), introduced himself and Bill
O'Leary, Chief Financial Officer for the ARC. He said he would
be giving a briefing on the ARC's economic development and the
transportation systems, using a PowerPoint packet given to the
committee.
He referred to different pages for a written history of the
Alaskan Railroad, and an explanation of how the ARC operates as
a semi-private, independent organization. The board of directors
operates as a management board, and employee retirement pensions
are paid through the ARC's earnings, which are kept within the
corporation itself. The ARC is the last remaining railroad in
the US that offers year-round passenger and freight service.
1:46:19 PM
SENATOR COWDERY asked if any federal funds are received by the
ARC.
BILL O'LEARY said that in 2007 the ARC will receive $45 million
in federal funds.
MR. GAMBELL said that the ARC's yearly operating budget is $36
million, before upgrades and investments.
SENATOR COWDERY asked if the ARC has retirement issues similar
to the State's.
MR. GAMBELL said no. He talked about the ARC's board members,
and said that they are compensated $400 for each full day of
work, which is the same fee that was instated in 1985.
He said the ARC emphasizes a balance between passenger and
freight traffic, which means a lower margin of profit. There is
also a large interface with railroad docks in Whittier, Seward,
Anchorage, and Seattle.
1:51:03 PM
SENATOR COWDERY asked if the percentage of ARC revenue
originating from real estate holdings has changed in recent
years.
MR. GAMBELL said the percentage has remained the same.
1:51:49 PM
MR. GAMBELL referenced a page to explain the operational tempo
of the ARC, and said that it has received awards for passenger
service.
He said that the freight operation uses flat cars, trailers, and
containers atop flat cars.
SENATOR COWDERY asked if a profit is made from coal shipping.
MR. GAMBELL said that there is a slight profit.
SENATOR COWDERY asked for the per-ton cost.
MR. GAMBELL said he would rather not say for the record.
He explained that the real estate section of ARC revenue has
been growing, including dock development and facilities
organization. The ARC has just completed a five-year progress
plan, and in 2007 will be creating new five-year plan. The
previous plan outlined work on equipment, bridges, and improved
technology and facilities. The safety record was also poor but
has since been improved.
1:59:30 PM
SENATOR COWDERY asked if the ARC owns its passenger coaches.
MR. GAMBELL said that it does.
SENATOR OLSON asked if previous ARC issues were due to
incompetence.
MR. GAMBELL said that the problems were a leftover issue from
days when the railroad was under federal administration.
2:01:36 PM
SENATOR OLSON said that as a business, the ARC would have been
considered incompetent.
MR. GAMBELL agreed that accountability is necessary. He then
showed a chart detailing the 2002 assessment findings.
He explained that the ARC uses a balanced plan of operation,
funding all needs across the operation, with a particular
emphasis on safety. In 2006 the legislature granted the ARC
approval to sell tax-free bonds for main-line railroad funding;
$165 million worth of bonds were purchased, and the first
increment was sold and the rebuilding program executed with the
profits in 2006.
He explained that the ARC pension fund totaled $66 million in
2006. Currently the funding exceeds its liability by $9.5
million.
SENATOR WIELECHOWSKI asked if there is a federal pension plan
for the ARC.
MR. O'LEARY said that there is no federal pension plan.
SENATOR WIELECHOWSKI asked where the ARC stands in the
collective bargaining process.
MR. GAMBELL said that the ARC negotiates with five unions.
SENATOR WIELECHOWSKI said that his constituents were concerned
about the negotiating process.
MR. GAMBELL said that the ARC's track laborers are currently in
negotiation, and they are happy with their wages but the union
leadership is frustrated.
SENATOR COWDERY asked from where the ARC's wooden ties are
procured.
MR. GAMBELL replied that the ties came from the lower 48.
SENATOR COWDERY remarked that many countries use curved all-
concrete ties and asked if they are used in Alaska.
MR. GAMBELL said that two manufacturers in the lower 48 make
such ties, and that concrete ties, with a 100-year lifetime, are
used on the turns on ARC tracks. Wooden ties are recycled every
35-40 years.
2:12:20 PM
SENATOR COWDERY asked if wooden tie attachments are different
from concrete tie attachments.
MR. GAMBELL replied they are.
2:13:16 PM
MR. GAMBELL said that ARC post-retirement medical funding is
historically unfunded, and so since 2006 significant money has
been put aside for such.
He said that 2006 was historically the best year for the ARC's
safety record, and it keeps improving.
SENATOR WIELECHOWSKI asked if there have been any occupational
health problems reported.
MR. GAMBELL said that such problems have not been reported,
though that doesn't necessarily mean they don't happen. The ARC
is pro-active about hearing protection and smoke inhalation
prevention.
He said that the ARC is investing in a collision avoidance
system utilizing satellite and GPS information, to track
vehicles and switch positions and automatically avoid
collisions. Operation is expected to begin in 2009.
2:18:57 PM
SENATOR WILKEN asked how much the system will have cost by 2009.
MR. GAMBELL said it will be around $20 million.
SENATOR OLSON asked if collisions are a problem for the
railroad.
MR. GAMBELL said that many such accidents have happened in the
lower 48, and explained how they can have serious consequences.
Alaska has had several close calls in recent years.
2:22:27 PM
SENATOR WILKEN asked how many gallons of fuel are hauled per day
from North Pole to Anchorage by the railroad.
MR. GAMBELL said 700 million gallons are hauled per year, or
around 1.6 million per day, on one train a day in the winter. Up
to a billion gallons a year can be transported.
SENATOR WILKEN said that there is a big liability connected with
fuel transport.
MR. GAMBEL said that he agreed, and the collision-avoidance
system is important for preventing accidents.
2:25:05 PM
MR. GAMBELL said that the ARC 2006 season was the best on record
for passenger service revenue. There was a new first-class
carriage service that year, and the ARC is developing a
partnership with Princess Cruises.
He explained that the ARC mission statement encourages
partnership in community and economic growth.
SENATOR WIELECHOWSKI asked for the number of yearly moose kills
on the rail system.
MR. GAMBELL said that 37 moose have been killed so far this
year, far less than on state roads.
SENATOR WIELECHOWSKI asked if the ARC is doing anything to
reduce the number.
MR. GAMBELL said that brush and snow clearing are the most
effective techniques.
2:28:43 PM
SENATOR WIELECHOWSKI asked if the ARC has problems with ATVs and
snowmachines on the tracks.
MR. GAMBELL said that it does, and the main problem is bridge
use. Emergency braking by trains to avoid ATVs on the tracks can
cause derailment and other problems.
2:30:47 PM
MR. GAMBELL explained that Diesel Multiple Units (DMU) are new
engines being used by the ARC in a partnership with the Forest
Service.
2:32:26 PM
MR. GAMBELL said that the ARC is interested in starting commuter
service, and has ordered a car for wintertime use between the
Anchorage airport and depot, with the possibility of ski-train
service to Girdwood.
2:33:45 PM
SENATOR WIELECHOWSKI said that he thinks commuter trains are a
great idea, and said that public opinion should be solicited.
SENATOR COWDERY asked if the Anchorage airport facility is
profitable.
MR. GAMBELL said that the depot is not a money-making venture.
The ARC does do business with smaller leaseholders like
restaurants.
2:37:49 PM
SENATOR COWDERY asked if ARC bridges are sufficient to carry
heavy loads like pipes for a gas pipeline.
MR. GAMBELL said that existing bridges are sufficient but that
they are being upgraded anyway.
He explained a slide showing the results of a study on ARC
economic impact which showed support of 3,000 jobs and $150
million in payroll across the state beside the ARC's own
workers. The ARC is also increasing its capital investment
program, which is already at $350 million. He then showed some
slides of ARC projects in progress and development, but said
that all of them are not fully funded yet.
2:41:54 PM
MR. GAMBELL said that the ARC works with the federal government
on conveyance transfer, between trucks and trains and barges. He
said that the ARC is in talks with Anchorage and Mat-Su
governments about a ferry system.
He then showed a slide explaining day-to-day issues faced by the
railroad, and explained that the right of imminent domain is a
policy upheld by the railroad, but it is very contentious and
rarely used.
2:45:09 PM
MR. GAMBELL said that the railroad is eligible for
classification as a historical district, but such designation
would mean that every action made on the railroad would have to
be approved by the state Historical Preservation Office.
He said that the Transportation Security Administration visited
the ARC and gave it high marks for security.
2:47:20 PM
SENATOR WIELECHOWSKI asked for the ARC's current status on
pesticides.
MR. GAMBELL explained that the process for a pesticide permit is
a very involved process, including public input and scientific
studies, and must be renewed yearly.
2:48:50 PM
SENATOR WILKEN asked if the ARC participates in the Alaska Land
Mobile Radio Program.
MR. GAMBELL said that it does.
2:49:57 PM
CHAIR KOOKESH asked for the ARC's status in relation to future
federal funding.
MR. GAMBELL said that in 2001 the ARC got entitlement to federal
formula funds, and that they decided to transfer to the
equivalent amount of earmarked formula funds. He said that such
earmark days are over, but the ARC is still eligible for
Department of Defense fund appropriations.
2:51:46 PM
CHAIR KOOKESH asked how train cars manufactured in Colorado are
delivered to Alaska.
MR. GAMBELL said that the cars are shipped to Seattle by train,
and then barged to Whittier where they are put back on the train
for further shipping.
CHAIR KOOKESH, seeing no further business to come before the
committee, adjourned the meeting at 2:52:47 PM.
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