Legislature(2011 - 2012)BARNES 124
02/08/2011 01:00 PM Senate TRANSPORTATION
| Audio | Topic |
|---|---|
| Start | |
| Presentation: Marine Transportation Advisory Board | |
| Update: 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 | ||
ALASKA STATE LEGISLATURE
JOINT MEETING
SENATE TRANSPORTATION STANDING COMMITTEE
HOUSE TRANSPORTATION STANDING COMMITTEE
February 8, 2011
1:02 p.m.
MEMBERS PRESENT
SENATE TRANSPORTATION
Senator Albert Kookesh, Chair
Senator Joe Thomas, Vice Chair
Senator Dennis Egan
Senator Charlie Huggins
Senator Linda Menard
HOUSE TRANSPORTATION
Representative Peggy Wilson, Chair
Representative Eric Feige
Representative Cathy Engstrom Munoz
Representative Max Gruenberg
Representative Pete Petersen
MEMBERS ABSENT
SENATE TRANSPORTATION
All members present
HOUSE TRANSPORTATION
Representative Lance Pruitt, Vice Chair
Representative Craig Johnson
COMMITTEE CALENDAR
PRESENTATION: MARINE TRANSPORTATION ADVISORY BOARD
- HEARD
UPDATE: ALASKA MARINE HIGHWAY SYSTEM
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
MIKE KORSMO, Chair
Marine Transportation Advisory Board (MTAB)
POSITION STATEMENT: Delivered a presentation on the Marine
Transportation Advisory Board.
CAPTAIN JOHN FALVE, General Manager
Alaska Marine Highway System (AMHS)
POSITION STATEMENT: Delivered an update on the Alaska Marine
Highway System.
ACTION NARRATIVE
1:02:11 PM
CHAIR PEGGY WILSON called the joint meeting of the Senate and
House Transportation Standing Committees to order at 1:02 p.m.
Present at the call to order were Senators Huggins, Egan,
Thomas, and Kookesh; and Representatives Feige, Peterson,
Gruenberg, and Wilson. Representative Munoz arrived shortly.
^Presentation: Marine Transportation Advisory Board
Presentation: Marine Transportation Advisory Board
1:03:47 PM
CHAIR PEGGY WILSON announced the first order of business would
be a presentation by the Marine Transportation Advisory Board.
1:04:03 PM
REPRESENTATIVE MUÑOZ joined the committee.
1:04:50 PM
MIKE KORSMO, Chair, Marine Transportation Advisory Board (MTAB),
said he is also a professional mariner. He related that this
board is a diverse group of Alaskans who take seriously their
responsibility to advise the Department of Transportation and
Public Facilities (DOTPF) and the governor on improvements to
the marine transportation system.
He explained that MTAB was established in 2003 by Administrative
Order and it works closely with Alaska Marine Highway System
staff on planning and scheduling. It also serves as a conduit
from the public to the administration.
1:06:45 PM
A year ago the MTAB recommended three short-term goals. The
first was to operate the Kennicott on a full schedule, May
through September. Because of this funding change there have
been some changes to how the Kennicott will operate in the next
few years. This will also provide more service for military
families getting to bases in the Interior.
The second goal was to operate the fast vehicle ferry (FVF)
Fairweather on a full schedule in the spring. This has been an
important service to Sitka and the northern panhandle. There
have been issues with the fast ferries and he would defer an
explanation to AMHS staff. MTAB understands the importance of
these ferries and last year requested setting money aside for
new engines. There are ongoing problems with this ferry;
however, having this ferry operate in the spring is still a
focus.
The third goal was to add money into the Vessel Replacement Fund
to move forward with the "Alaska-Class Ferry Project." Thanks to
the efforts of the Legislature there is currently between $50
million to $60 million in the fund. An additional $60 million is
still needed to build the first vessel. The administration has
requested the additional $60 million in federal funding, but
federal money may no longer be available to this project.
One of MTAB's most important goals is to keep the state moving
forward to build needed new, fuel efficient vessels. Every year
it costs more to maintain and update the older vessels in the
fleet. Fortunately, a significant portion of these maintenance
costs are paid through federal programs, but those can no longer
be relied on.
1:13:16 PM
At the Ketchikan meeting, the MTAB discussed methods of
designing and building new ferries. This resulted in a
resolution recommending the state pursue the construction
management general contractor procurement method modified to
suit the activity of shipbuilding, maximize the Alaska bidder
preference, and continue to look toward building the Alaska
class vessel as soon as prudently possible. Benefits of building
the vessel in-state are numerous and positive. By building the
infrastructure and training the labor force to take on such a
project the state would put itself in the position to develop a
much needed manufacturing base.
1:14:44 PM
CHAIR P. WILSON announced that Senator Menard and Representative
Gruenberg had joined the meeting.
MR. KORSMO further noted that AMHS has seen an increase in
ridership as a result of better scheduling. He said MTAB
believes that the current approach using the limited funds
available is the right one. It has proven that an increase in
marketing funding has a direct impact on ridership and revenue.
They continue to look for efficiencies in maintenance, labor,
and operational costs system-wide.
1:17:28 PM
He said that MTAB has also looked at connecting transportation
systems throughout the state, and how they can be improved to
take advantage of what the system has to offer. For example, for
the board meeting in Cordova in September, the board flew to
Anchorage and took the Alaska railroad to Whittier, and then
took the fast ferry Chenega to Cordova. After the meeting the
next day, everyone was able to catch their flights to Anchorage
or Juneau.
1:17:34 PM
Another long-term goal is to look at the impacts of the system
on coastal communities and their connection to urban
distribution hubs. Because of twice monthly Aleutian Island
service, seven communities can take advantage of Alaskan
businesses in Anchorage, Homer, and Kodiak instead of barging
from Seattle. Due to the impact of regular ferry service, and
particularly fast ferry service, residents of Cordova can do
most of their purchasing in Anchorage instead of having to rely
on expensive barge service out of Washington state. This has
also had a huge economic impact on lodges and recreational
activities in Prince William Sound.
MTAB is working with the AMHS staff on ways to make sure the
public can have input outside the normal meeting schedules. They
have launched a website to provide the public with the latest
information.
Last, MTAB is working with the new DOTPF commissioner in an
advisory role to help select a new deputy commissioner. Mr.
Korsmo then acknowledged the work that Deputy Commissioner Jim
Beedle did on the AMHS. He will be missed and difficult to
replace.
1:21:49 PM
Mr. Korsmo thanked the Legislature for its support and concluded
his remarks.
CHAIR P. WILSON asked for a copy of what maritime accidents
happened in 2010 where AMHS was able to respond.
1:23:11 PM
SENATOR HUGGINS asked for examples of the advisory board making
a difference.
MR. KORSMO replied the first is scheduling; MTAB was the conduit
for more stable scheduling. Basically it brings what the public
wants before the AMHS. It's been a good working relationship.
They are trying to expand service statewide.
REPRESENTATIVE MUÑOZ asked what the budget is for marketing and
suggested that there may be opportunities to work with DCCED and
the division of tourism.
MR. KORSMO agreed that was a good idea, and said that tourism
marketing is paying off.
REPRESENTATIVE MUÑOZ said she hopes not to lose the opportunity
to have staterooms on the fast ferries.
MR. KORSMO deferred to Captain Falvy.
1:28:24 PM
CATHIE ROEMMICH, past Chair of MTAB, provided information about
listening to the people.
1:29:15 PM
SENATOR EGAN emphasized that the Marine Highway is the highway
system in Southeast. He asked about the regulation from the
DOTPF about handicap access adopted January 3, 2010, and if the
Marine Highway is in compliance.
At ease from 1:30 p.m. to 1:31 p.m. to set up the PowerPoint.
^Update: Alaska Marine Highway System
Update: Alaska Marine Highway System
CHAIR P. WILSON announced the next order of business would be an
update on the Alaska Marine Highway System.
1:31:44 PM
CAPTAIN JOHN FALVE, general manager, Alaska Marine Highway
System, introduced Jesse McCarron, AMHS publications specialist.
The mission of the Alaska Marine Highway System is to provide
safe, reliable, and efficient transportation of people, goods,
and vehicles among Alaska communities, Canada, and the "Lower
48" while providing opportunities to develop and maintain a
reasonable standard of living and high quality of life,
including social, education, and health needs.
CAPTAIN FALVE said the overview would include achievements, and
challenges, and the Alaska Class Ferry.
1:34:04 PM
Achievements: AMHS is doing well. The benchmark is 1999 when
AMHS also served Prince of Wales. The chart reflects that 2007-
2010 passenger traffic has increased. In fact 2009 and 2010 are
all-time record highs, because the schedules were stable.
Similarly, vehicle traffic is a strong example of success. AMHS
is proud of this and is already ahead in 2010 going into 2011.
1:38:10 PM
Further, AMHS is managing with the budget it is given. Another
achievement is early scheduling in the past two years. This has
contributed to increased traffic. He thanked the administration
for help in getting the schedule out in a timely manner. This
has resulted in a great increase in tourism revenue.
CHAIR P. WILSON said she is very pleased with this change. She
asked if the increase in ridership is from the U.S. or other
countries.
CAPTAIN FALVE said it's a combination, but they are also moving
record numbers of Alaskans. Reasons include round-trip
discounting and targeted specials. Another achievement is on-
time departures and customer satisfaction. He displayed a chart
that shows a small downward trend in the last several years.
This is because the fast ferries are not as reliable as the
steel boats, especially during the winter months.
1:43:16 PM
Another achievement is vessel satellite communications. Now they
are installing these systems on the ships using federal funds.
Seven have been installed to date. Commissioning these systems
is a process that takes time. They are looking to have 24/7
communications with the ships. They need sufficient broadband
for each ship. With this the ships will have hands-on
reservation service. With respect to vessel tracking he said Mr.
McCarron has been tasked with this project. They are integrating
a tracking system on the website. It will also be used as a
marketing tool. They're also working with the 511 system and the
smart phone system so as to offer more to the public.
Putting laptops on the boats is another project that's under
way. This requires sufficient broadband and it isn't cheap.
They're still looking into this because technology is changing
but they are committed to providing customers with Internet
access.
1:49:36 PM
Fuel efficiency infrastructure is another achievement. They
found there are complex satellite-driven systems that track
different savings. Currently they are tracking this on five
ships. The current savings is 12 percent, which potentially
translates to a $4.5 million savings. Data collection continues.
1:52:32 PM
Use of the online reservation system has increased in the last
several years. Now the usage is over 30 percent. They estimate
it will climb to 40 percent. The current reservation system is
old and will be replaced soon.
Marketing is another achievement. About three years ago they
received an increased marketing budget. The AMHS is now on Face
book and UTube. They are branding the system aggressively, which
is creative marketing. They want customers to see this brand and
identify it with a unique experience. They are doing this right
down to the business cards they carry and the items sold in
their gift shops.
CHAIR P. WILSON noted that AMHS had 68 million hits in 2010.
CAPTAIN FALVE answered they are at an all-time high.
REPRESENTATIVE MUÑOZ asked if they've worked with Alaska Travel
Industry Association (ATIA).
CAPTAIN FALVE answered yes and with communities as well. They do
cooperative marketing but they want control over that. They are
currently marketing to the shoulder seasons. The Sea News Letter
is put out monthly talking about what's happening with the
Alaska Marine Highway System.
1:58:40 PM
New service has started to Gustavus and will run throughout the
winter. Another attractive route will be from Bellingham to
Whittier. This will help the military families who are
relocating to bases in the Interior. It will also bring more
tourists into the Interior. They believe this will provide
additional revenue, without taking passengers from other routes.
2:01:05 PM
CAPTAIN FALVE said the system also has challenges. The concept
of consistent schedules on a year-to-year basis continues to be
a problem, and they try to work with communities on scheduling.
There is uncertainty surrounding the fast ferries Chenega and
Fairweather. Also they are continuing to work on improving
vessel dependability.
In terms of revenue enhancement, the goal is to increase
passenger and vehicle traffic to all ports. To achieve this AMHS
must release schedules early, use travel agents, and continue to
work on Internet tools for marketing.
2:05:36 PM
CHAIR P. WILSON asked if travel agents will be able to work with
the system better.
CAPTAIN FALVE said yes, but we need to be smart about how they
can help the system.
CAPTAIN FALVE said that operating cost containment is another
challenge; 62 percent of the cost is in payroll. Costs are
determined in collective bargaining with the exception of health
care and the unfunded pension. They must maintain an effective
crew size in order to minimize costs. Fuel cost represents 21
percent of total operating costs.
2:10:17 PM
CHAIR P. WILSON noted that payroll used to be the biggest cost
then it went to fuel and now it's back to payroll.
CAPTAIN FALVE acknowledged that it does move around. Continuing,
he said insurance is another factor. They are looking at safety
more closely to control this cost. Rates have actually come down
when considering the combination of being self insured and
buying insurance.
2:12:40 PM
Fuel efficiency infrastructure is another challenge. Within the
next year eight ships will be equipped with the new fuel
tracking system. The cost of fuel fluctuates but if it's trucked
it is an Anchorage oil price information service (OPUS) and if
it's barged it's a Seattle OPUS.
Vessel retirement is another challenge. Four vessels were
constructed in the early 1960s and are nearing the end of their
useful lives. He noted the different routes that the Matanuska,
Malaspina, Taku, and Tustumena run. In the near term they
estimate the need for three Alaska Class Ferries replacing two
main line ferries. He said he is looking for a SOLAS (safety of
life at sea) waiver for the Malaspina and/or Columbia to operate
in and out of Prince Rupert, Canada.
Another challenge is mid-life engine replacement. The Columbia,
Malaspina, and the Aurora are past midlife and need new engines.
They each have two engines.
Another challenge is the mainframe reservation system. The new
system is more user-friendly, efficient, and compliments the
AMHS marketing efforts. Furthermore, they've rewritten the
customer policies and procedures book. Also, they've bid out for
a new project manager. The system should be complete by
September 2012.
2:23:26 PM
Funding recap:
Operating budget: Maintain current levels of service.
Approximate required general fund appropriation is $100 million.
Capital requirements include $22 million to $25 million
annually, which comes from federal highways, FTA, and state
matching funds.
2:24:49 PM
Alaska Class Ferry: The governor supports construction. Initial
state funds are $60 million. Without federal funds it is more
flexible. There is potential for 250 new jobs. Phase 1 has $3.4
million from AIDEA as part of the functional replacement. The
administration supports a competitive bidding process.
The preliminary design for the Alaska Class Ferry is complete
after a very public process. The functional design including the
details of ship systems is in process and about 10 percent
complete. This stage will take about 10-12 months and building
will take another three to four years. They are currently
working on the procurement process. The estimated cost at this
point is $120 million.
Staterooms: The new Alaska Class Ferry will have five quiet
rooms. These will have bunks and perhaps a toilet, and will be
handicap accessible. The intention is to stay within the 12 hour
envelope of a day boat even though the crew is on 24/7. He noted
that federal Americans with Disability Act (ADA) rules have
recently changed, and AMHS works very hard to stay in
compliance. Consultants help with this.
CHAIR P. WILSON thanked the presenters.
2:34:42 PM
There being no further business to come before the committee,
Chair P. Wilson adjourned the meeting at 2:34 p.m.
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