Legislature(2023 - 2024)BUTROVICH 205
03/16/2023 01:30 PM Senate TRANSPORTATION
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| Audio | Topic |
|---|---|
| Start | |
| Overview: Alaska Railroad Corporation | |
| 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
March 16, 2023
1:30 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
COMMITTEE CALENDAR
PRESENTATION: ALASKA RAILROAD CORPORATION OVERVIEW
- HEARD
PREVIOUS COMMITTEE ACTION
No previous action to record
WITNESS REGISTER
BILL O'LEARY, President & CEO
Alaska Railroad Corporation
Anchorage, Alaska
POSITION STATEMENT: Provided the Alaska Railroad Corporation
Overview.
BRIAN LINDAMOOD, Vice President of Engineering
Alaska Railroad Corporation
Anchorage, Alaska
POSITION STATEMENT: Responded to questions pertaining to the
Alaska Railroad Corporation Overview.
CLARK HOPP, Chief Operating Officer
Alaska Railroad Corporation
Anchorage, Alaska
POSITION STATEMENT: Responded to questions pertaining to the
Alaska Railroad Corporation Overview.
ACTION NARRATIVE
1:30:29 PM
CHAIR JAMES KAUFMAN called the Senate Transportation Standing
Committee meeting to order at 1:30 p.m. Present at the call to
order were Senators Myers, Wilson, and Chair Kaufman. Senators
Kiehl and Tobin arrived thereafter.
^OVERVIEW: ALASKA RAILROAD CORPORATION
OVERVIEW: ALASKA RAILROAD CORPORATION
1:31:25 PM
CHAIR KAUFMAN announced an overview of the Alaska Railroad
Corporation.
BILL O'LEARY, President & CEO, Alaska Railroad Corporation,
Anchorage, Alaska, presented The Alaska Railroad Corporation
Overview. He recognized the senior members of the Alaska
Railroad Corporation who were available to contribute to the
presentation online. He expressed appreciation for the guidance
offered prior to the hearing. The guidance allowed him to
prepare a targeted overview for the committee.
CHAIR KAUFMAN announced that Senator Kiehl joined the committee
meeting.
1:32:41 PM
MR. O'LEARY began the presentation with slide 2, "Purpose of
presentation." He explained that the presentation was divided
into two categories: background and challenges.
1:33:36 PM
MR. O'LEARY moved to slide 3, "Safety." He explained that safety
was a core value of the Alaska Railroad Corporation. He pointed
to the pictures on the left side of the slide depicting social
media posts with people engaging in dangerous railroad track
practices. He noted that the picture on the right depicts an
avalanche crossing the railroad tracks. He stated that Alaska
provides a beautiful and dangerous environment.
1:35:28 PM
MR. O'LEARY moved to slide 5, "Quick Facts." He explained that
the state purchased the railroad from the federal government in
1985. The federal government completed the construction of the
railroad in 1923. The state established the railroad as a unique
state-owned corporation. He clarified that the corporation
operated independently. The corporation is charged with self-
sustaining practices and must profit each year to maintain the
massive infrastructure. He acknowledged that the corporation
looks like a private enterprise, while in reality it is
government-owned. He stated that the corporation's mission is
focused on service to Alaska's economic development.
MR. O'LEARY stressed that state general funds are not used to
support the railroad. The corporation is self-sustaining through
federal contributions and revenues earned. He added that the
railroad employees are corporation employees versus state
employees. The corporation debts are not owned by the state. He
explained that corporation profits are redirected to
infrastructure improvements.
Senator Tobin joined the hearing.
1:38:22 PM
MR. O'LEARY continued to provide background information about
the Alaska Railroad Corporation. He stated that the governor
appoints the seven-person board of directors. He remarked that
the corporation employes approximately 600 employees year round,
increasing in the summer season. He moved to slide 6,
"Challenges." He noted that challenges are the focus of the
remainder of the presentation.
1:39:01 PM
MR. O'LEARY moved to slide 7, "Hierarchy of Goals."
Hierarchy of Goals
• Mission Statement Through excellent customer
service and sound business management practices,
provide safe, efficient and economical
transportation and real estate services that support
and grow economic development opportunities for the
State of Alaska.
• 2018-2023 Strategic Plan
• 2023 Strategic Goals
• Department Goals
• Individual Goals
1:41:22 PM
SENATOR MYERS asked about real estate services. He interpreted
the statute to identify railroad operations as an essential
government function. He did not interpret the statute to include
real estate as an essential government function.
MR. O'LEARY replied that real estate is a core function of the
Alaska Railroad Corporation. He stated that the mission involves
real estate because the corporation serves as a steward of 36
thousand acres of land. He argued that real estate services
encompass a core component of the Alaska Railroad Corporation.
1:42:28 PM
MR. O'LEARY moved to slide 8, "2018-2023 Strategic Plan
2018-2023 Strategic Plan
1. Expand Business by Growing and Diversifying Revenue
2. Improve Profitability by Optimizing Cost Structure
3. Balance Capital Program to Optimize Safety, Revenue
and Efficiency
4. Build a Proactive Culture of Safety and Engagement
5. Enhance Economic Development, Stewardship and
Stakeholder Relations
1:44:22 PM
MR. O'LEARY stated that items 1 and 2 of the strategic plan
relate to slide 9, "Financial."
Expand Business by Growing and Diversifying Revenue
Improve Profitability by Optimizing Cost Structure
1:44:41 PM
MR. O'LEARY moved to slide 10, "Net Income and Revenue Sources."
He explained that the corporation manages accounting with net
income similar to private enterprise accounting. He pointed out
that the corporation utilizes the calendar versus the fiscal
year. He spoke to the graph on the left depicting the
corporation's net income over the last 11 years. He pointed to
the fiscal strength displayed since the pandemic. He highlighted
the unaudited net income of approximately $40 million in 2022.
MR. O'LEARY turned to the graph on the right of slide 10, "2022
Revenue Sources Unaudited," and highlighted freight revenue as
the greatest category of revenue. He noted that passenger and
real estate activity follow in revenue earnings. He added that
grant revenue contributes to federal formula funds. He stated
that the majority of grant funds contribute to capital projects.
1:47:21 PM
SENATOR WILSON asked about federal Infrastructure Investment and
Jobs Act (IIJA) funds. He wondered about additional federal
funds to further support the Alaska Railroad Corporation.
MR. O'LEARY replied that the corporation is actively pursuing
multiple grants. He explained that federal funds are received
through a formula. The corporation is also eligible for
competitive grants.
1:49:01 PM
SENATOR WILSON commented that other entities and communities
work with a variety of stakeholders to create a collaborative
approach to grant writing. He wondered if the railroad
corporation sought such collaboration with local municipalities
who might benefit from expansion.
MR. O'LEARY replied yes. He stated that the railroad submitted a
collaborative application with the Fairbanks North Star Borough
and the Matanuska-Susitna Borough to extend rail alignment to
Port MacKenzie. He spoke about a recent joint application
submitted with the Municipality of Anchorage for a project in
the Port of Alaska. The project will shift some corporation
intermodal facilities to the Port of Alaska.
1:50:39 PM
MR. O'LEARY moved to slide 11, "Passenger Operations." He
explained that the gold color represents passengers in cruise
and contract railcars. He added that the blue bars represent
Alaska Railroad Corporation Ridership. The impacts of the Covid-
19 pandemic were notable in 2020 and 2021. He highlighted the
strong recovery in 2022.
1:51:42 PM
MR. O'LEARY moved to slide 12, "What's Next - Passenger
Service." He highlighted upcoming plans for passenger service.
He added that the Alaska Railroad Corporation sought to improve
and increase service.
1:52:10 PM
MR. O'LEARY moved to slide 13, "Freight Operations." He
characterized the graph as because of the significant
decline in railroad activity over the past 10 years. He noted
that the refinery in Fairbanks was the largest freight customer
in past years. He pointed to the upswing in freight operations
in 2022. The corporation predicts another good year as
development on the North Slope continues.
1:54:03 PM
MR. O'LEARY moved to slide 14, "What's Next - Freight Service."
• Unaudited 2022 freight revenue was 42.1 percent over
2021
• LNG Opportunities
square4 Reapplied for FRA approval
square4 High oil prices could be catalyst
square4 Need anchor tenant
1:54:59 PM
SENATOR MYERS asked about the liquefied natural gas (LNG)
shortage in the Anchorage Area. He wondered why the corporation
viewed LNG as a growth potential.
MR. O'LEARY replied that recent LNG developments on the North
Slope may impact the growth potential. He spoke about "groups
out there" who propose northbound LNG transport. He opined that
the arrangement could provide the Interior with lower cost and
environmentally friendly fuel.
1:56:15 PM
MR. O'LEARY continued to describe the bullets on slide 14.
• Interline barge service
square4 Seattle to Whittier-extra barges above schedule
square4 Willow and Pikka development could cause higher growth
in supply demand
• Military opportunities
square4 F-35 Eielson construction mostly done
square4 Moving contaminated soils currently
• Natural Resources
square4 Gravel haul could grow from federal infrastructure
bill projects over next few years
square4 Future prospect: Ambler mine may use rail to move
concentrates to Port of Alaska
1:57:22 PM
SENATOR WILSON asked about railcars that arrive full of cargo
from the Lower 48. He wondered how ARRC inspects the railcars
arriving by barge from other railroads.
MR. O'LEARY responded that the cars arriving from the Lower 48
are termed backhaul. He explained that the corporation attempts
to coordinate backhaul for reuse or return.
SENATOR WILSON asked if the cars return empty. He wondered who
covers the cost of the transport.
MR. O'LEARY responded that the Alaska Railroad Corporation does
not own backhaul cars. The cars travel north from the Lower 48
on the railroad's barge. He added that ARRC performs safety
inspections on backhaul cars.
1:58:36 PM
MR. O'LEARY moved to slide 15, "Real Estate Revenue." He stated
that the vast majority of real estate revenue is driven by
leases and permits. He explained that governmental entities, the
private sector and others lease land from the corporation. He
added that real estate revenue provides a key piece of the
financial puzzle. Real estate revenue provides a consistent
source of income for the railroad. Land use is a preferred
method for economic development.
MR. O'LEARY displayed slide 16, "What's Next - Real Estate."
• Recent Land Trades/Sales
square4 2021 Eklutna land trade supports residential &
industrial developments
• Ship Creek Development
square4 Residential & industrial opportunities
square4 The Edge Development
square4 49th State Brewing
• Wetlands Mitigation Bank
• South-end Land and Facilities
square4 Seward Passenger Dock Replacement
square4 Seward Freight Dock Expansion and Transportation
Corridor upgrades
square4 Whittier Terminal Master Plan
2:00:15 PM
SENATOR TOBIN asked about the Downtown Edge housing development.
She wondered whether the corporation planned to build additional
housing developments in Anchorage.
MR. O'LEARY replied that Downtown Edge is one of the first new
housing developments built in downtown Anchorage in several
years. The development was built on leased ARRC property and the
housing units are selling well. He remarked that the corporation
intends to develop its land holdings.
2:01:57 PM
MR. O'LEARY transitioned to the third item on the strategic plan
relating to capital investments. The intention is to balance the
Capital Program to optimize safety, revenue, and efficiency.
MR. O'LEARY moved to slide 18, "ARRC Capital Budget Process - an
Overview."
ARRC Capital Budget Process an Overview
• The Capital Projects Evaluation Working Group is
charged with evaluating and prioritizing all of the
capital requests for the company annually
square4 The 6-member team is comprised of department
representatives from Facilities/Energy
Management, Grant and Asset Management, Passenger
Operations, Engineering Services, Signal and
Telecommunications and Financial Planning and
Analysis
• For 2023, the team evaluated $221.4 million in
capital requests, scored and categorized them, and
then reconvened to address the challenge of what to
recommend for the funding and in what amount given
preliminary estimate of total federal and internal
capital available
• The project list developed was submitted to the CFO
and to senior staff for their comments and
recommendations, modified/approved by the CEO and
presented to the ARRC Board of Directors.
2:04:32 PM
MR. O'LEARY moved to slide 19, "Robust 5-year Capital Investment
Plan."
• Supports railroad facilities, infrastructure,
community developments and interactions
• Will use internal forces, along with contractors and
suppliers
• Nearly $74 million for 2023; half-billion dollars
invested over five years
square4 May add funding sources as competitive federal
grants, partnerships and other financial
opportunities become available for large projects
square4 May add debt financing for needs such as
replacing vehicles, equipment and railcars
square4 Numbers in table do not include Seward
investments (previously approved)
2:05:55 PM
MR. O'LEARY moved to slide 20, "Major Focus on Bridge."
• 175 bridges and large culverts (10+ feet diameter)
• 10-year Program: Replace or rehab 70 bridges
square4 Nearly $11 million budget for 2023
square4 Accomplished by internal forces and contractors
• Funding: FTA grants, CARES Act and Alaska Railroad
Corporation (ARRC)
2:06:28 PM
CHAIR KAUFMAN asked whether the corporation utilizes drones for
bridge inspections.
MR. O'LEARY replied that ARRC has a drone program that hasn't
reached its full potential. He predicted that drones will be
used for emergency events.
CHAIR KAUFMAN offered to provide a connection to the University
of Alaska Fairbanks drone program managers.
2:07:51 PM
SENATOR WILSON asked about employment at ARRC following the
Covid-19 pandemic.
2:08:10 PM
MR. O'LEARY replied that the railroad made the decision to
retain employees through the pandemic. He remarked that the
decision provided advantages for the corporation's workforce. He
expressed difficulty hiring seasonal staff and ARRC is working
to establish incentives such as hiring bonuses.
SENATOR WILSON asked whether ARRC was considering the use of
autonomous trains.
MR. O'LEARY denied support of autonomous trains in the complex
Alaskan environment.
SENATOR WILSON stated he asked because of the increased
popularity in unmanned vehicles. He understood that rural areas
provide testing and training advantages.
MR. O'LEARY agreed that the interest in unmanned vehicles
exists; however, the unique geographical situation in Alaska
makes the new technology less appealing.
CHAIR KAUFMAN stated that autonomous train technology is
primarily utilized on light rail trains.
2:11:08 PM
SENATOR MYERS pointed to the railroad's employment contracts. He
asked whether ARRC offers a defined benefit or a defined
contribution retirement plan.
MR. O'LEARY replied that ARRC offers a defined benefit plan with
two tiers and a 401K program.
2:12:17 PM
MR. O'LEARY skipped to slide 22, "ARRC Whittier Terminal Master
Planning."
ARRC Whittier Terminal Master Planning
• Update/re-develop terminal master plan to prepare
for future and ensure state of good repair
• Purpose
A) Identify terminal rehab projects
B) Configure upland and yard track to support
maintenance and ops
C) Determine efficiency, reliability, resiliency and
sustainability improvements terminal-wide
• Funding: $1.17 million: 80 percent by MARAD (US DOT-
Maritime administration and 20 percent by ARRC
2:13:20 PM
MR. O'LEARY moved to slide 23, "ARRC Invests in Seward
Infrastructure
• Seward Master Plan completed in 2017 to guide
development
• ARRC pursuing Master Plan recommendations, including
passenger pier and terminal replacement, freight dock
expansion, upland development, transportation corridor
improvements, real estate parcel leasing, etc.
2:14:09 PM
MR. O'LEARY moved to slide 24, "ARRC Invests in Seward
Infrastructure."
ARRC Invests in Seward Infrastructure
• Alaska Railroad investments include near-term, large
scale capital projects in Seward with positive
economic impacts statewide
• Freight Terminal projects
square4 Estimated $25 million investment; 80 percent
funded by Maritime Administration (MARAD) grant
square4 Widen and lengthen freight dock by 2027
square4 Improve upland transportation corridor by linking
Port and Airport avenues
• Passenger Terminal Project
square4 Estimated $150 million investment
square4 Replace passenger dock by 2026
square4 Replace terminal building
2:14:50 PM
MR. O'LEARY moved to slide 25, "ARRC Seward Passenger Dock
Project."
ARRC Seward Passenger Dock Project
• ARRC project to rebuild pier and passenger terminal
building
• Tight timeframe to be ready for 2025 cruise season
• $150 million estimate: $115 million for dock, $35
million for building
• Funding sources: ARRC revenue bonds (no recourse to
state) plus ARRC capital
square4 Royal Caribbean Group Strategic partner; anchor
tenant with long-term commitment
square4 Updated design for generational project
square4 Replacing existing assets and future planning
square4 Bonds require legislative authorization
• $90 million additional needed in 2023
• $60 million bond authority in 2022
2:18:59 PM
MR. O'LEARY moved to slide 26, "Freight Dock and Uplands
Connectivity.
Freight Dock Expansion
• Dock History: 620 by 200 foot dock built in 2002; A
section was widened in 2007
• Freight Dock Expansion Project Scope: Extend to 1000
feet and widen to 300 feet along entire length
• Purpose: A)accommodate cargo growth; B)promote
region's key industries; C) serve rural communities
2017 Seward Terminal Master Plan: recommends freight
dock expansion and transportation corridor
connectivity
2:19:30 PM
MR. O'LEARY moved to slide 27, "Rail Extensions and
Realignments."
Rail Extensions and Realignments
• Rail Extensions
• Receive guidance from state and federal policy
makers regarding rail extension initiatives
• ARRC supports extending or building new
railroad lines in Alaska and believes this
falls under its mission to foster state and
community economic development
• Provide planning, technical, engineering and
operational expertise should funding be
identified
• Expect to generate sufficient revenues to pay
the operating expenses of any rail extensions
• Rail Realignments
• Supports realigning main line track out of Alaska
communities that have grown up along the route
• Enhances safety and efficiency, as well as
local quality of life by eliminating
numerous dangerous at-grade crossings as
well as reduce the running time on our
interior train routes
• Ongoing efforts to integrate our
recommendations with community and DOT&PF
planning efforts
• Ready with plans when federal funding
becomes available
2:20:47 PM
SENATOR MYERS recalled conversations over the last two decades
related to the Fairbanks rail realignment project. He understood
that the project entailed pulling the rail out of Fort
Wainwright, Badger Road and portions of the North Pole area. He
heard that the project preparation ceased in 2010. He asked the
reasons for the change of plans.
2:21:32 PM
MR. O'LEARY remembered that insufficient funding was the reason
for the cancellation. He spoke about rail realignment in
Fairbanks and discussions about removing the railyard from
downtown Fairbanks. The railyard project is also massive and
lacks sufficient funding.
2:22:26 PM
SENATOR MYERS understood that relocating the railyard would be a
massive burden. He wondered about realigning portions of the
track to allow the train traveling to North Pole to travel west
initially. He understood the issue to be less about insufficient
funding and more about ARRC's reluctance to relinquish the land
required for the rail realignment plans.
MR. O'LEARY offered to ask his fellow board members.
2:23:37 PM
BRIAN LINDAMOOD, Vice President, Engineering - Alaska Railroad
Corporation, Anchorage, Alaska, stated that he was unfamiliar
with the effect of legislation leading to the transfer of ARRC
land.
2:24:18 PM
SENATOR MYERS requested a follow-up response from ARRC about the
Fairbanks rail realignment plans.
2:24:30 PM
MR. O'LEARY moved to slide 28, "Capital Potential Outside of 5-
Year Plan."
Northern Rail Extension (NRE)
• 80+ miles North Pole to Delta Junction
• 4-phase project
square4 Phase 1: completed in 2014: Bridge over Tanana
River, road and levee near Salcha
square4 Phase 2: 13 miles of rail, from Moose Creek/
Eielson AFB to Tanana River Crossing
square4 Phase 3: 30 miles of rail from Tanana River
Crossing to Donnelly Training Area
square4 Phase 4: 38 miles of rail, Donnelly to Delta
Junction
• NRE Cost and Funding
square4 The original cost estimate was about $1 billion.
Estimate now $1.7 billion
square4 DOD was the main funding source for initial
planning, environmental and Phase 1. Public-
private partnership explored as future funding
option
MR. O'LEARY moved to slide 29, "Capital Potential Outside of 5-
year plan."
Port MacKenzie Rail Extension (PMRE)
• 32 miles Houston to Port MacKenzie
• Phased project
square4 Environmental work complete
square4 Mat-Su Borough is project sponsor
square4 Much of the foundational infrastructure (track
bed and bridges) are complete
• Cost and Funding:
square4 314 million total budget (original)
square4 $184 million in state grants so far;
square4 Estimated $190 million more needed to finish
(with inflation)
2:27:42 PM
CHAIR KAUFMAN asked about a future bridge or port required for
the Port MacKenzie Rail Extension.
MR. O'LEARY replied that the well-funded extension project
generated commercial interest. With reduced funding, the
commercial interest also decreased. He commented that ARRC must
generate a business case to justify providing the service,
should the capital funding be identified.
MR. O'LEARY transitioned to the fourth item on the strategic
plan which is safety. The intention is to build a proactive
culture of safety and engagement. Safety is a key element to
running a successful railroad.
2:29:35 PM
MR. O'LEARY moved to slide 31, "2023 Safety Goals and
Initiatives."
• Improved Overall Safety Performance
square4 Achieve a FRA Casualty Rate no greater than 4.2
square4 Achieve a Lost Time Incident Rate no greater than
2.5
square4 FRA Trespasser Fatalities: 0
square4 Passenger Casualties (train handling): 0
square4 FRA Reportable Derailments: 0
• Continued Implementation of Incident Free Culture
(IFC)
square4 Train the Trainer Course
square4 Manager Refresher Course
square4 Monthly IFC Workshop
• Quarterly Incident Review
• Safety Operational Monitoring Program (targeted)
• Operational Deep Dive (UAF Coal Facility)
2:30:16 PM
MR. O'LEARY moved to slide 32, "Reportable Injuries 10 Year
History." He pointed to the graph depicting casualty rates as
prescribed by the ARRC regulator. The graph detailed ten years
of recorded injuries. He stated that the trend was improving.
The railroad corporation strives for continual improvement.
2:31:09 PM
SENATOR TOBIN asked about the graph. She understood him to say
that the graph shows a rate of 8 incidents per 200 hours.
MR. O'LEARY corrected that the graph depicts 200 thousand hours
with the number of incidents divided by the number of person-
hours worked. The formula creates the casualty rate.
SENATOR TOBIN clarified that the chart depicts 8 incidents per
200 thousand hours over a prescribed time period.
CHAIR KAUFMAN asked whether reportable cases were those
requiring first aid.
MR. O'LEARY responded that ARRC follows specific criteria as
defined by the regulator.
2:32:09 PM
SENATOR TOBIN asked how many person hours are typical in a year
with ARRC.
MR. O'LEARY deferred the question to the corporation's chief
operating officer.
2:32:38 PM
CLARK HOPP, Chief Operating Officer, Alaska Railroad
Corporation, Anchorage, Alaska, responded that 200 thousand man
hours roughly equates to 100 employees working an entire season.
He reported a reportable injury rate of four over the last few
years, equating to four reportable injuries for every hundred
railroad employees. He agreed with Senator Kaufman that a
reportable injury is one that requires first aid. He added that
a small laceration requiring a band-aid is a reportable injury.
He stated that the railroad also tracks lost-time incidents,
meaning that if a person twists an ankle and is off work for a
few days, that is reported as a lost-time injury. The lost-time
injury rate is typically half of the casualty rate.
2:34:26 PM
MR. O'LEARY moved to slide 33, "Derailment Concerns."
• What do we haul
square4 Commodities: petroleum, coal and gravel
square4 Interline services: ARMS, CNR, ICOFC
square4 TOFC/COFC
square4 Other freight including hazardous materials
• What happened in Ohio
square4 Overheated wheel bearing caused derailment
(preliminary findings)
square4 Chemical spill
• Current safety measures and response
• Future regulations
2:38:29 PM
CHAIR KAUFMAN pointed out the short span of the Alaska railroad.
He assumed that the shorter distance allowed for optimal
inspection. He asked if ARRC's inspection schedule was compared
to other railroads in the Lower 48.
MR. O'LEARY replied that the distance between detectors is
better than average for ARRC. He stated that power issues are
significant for ARRC, so the use of solar power and generators
provide optimal solutions. He stated that the detector study
offered robust data to benefit the program.
2:40:16 PM
CHAIR KAUFMAN remarked that a recent Department of
Transportation and Public Facilities (DOTPF) presentation
revealed the use of data for greater predictability. He opined
that implementing an initiative-taking bridge inspection regimen
would reduce the cost of bridge replacement. He encouraged the
leveraging effect of drone technology to fully map the underside
of the bridges. He wondered if ARRC used predictive analysis for
infrastructure inspections.
MR. O'LEARY relayed that ARRC follows a prescribed inspection
schedule for all railroad equipment. He explained that the
corporation was striving to inspect efficiently. He stated that
ARRC was subject to transit asset management system requirements
by virtue of federal funding. The federal funding requirements
are tied to the prescribed inspection schedule, which serves as
a benefit to ARRC. He added that the inspection data allow for
better predictions and better outcomes.
2:42:40 PM
MR. HOPP provided two examples of predictive analysis. He spoke
about the recent installation of a bearing acoustic monitoring
system to address the danger of hot bearings. He added that the
standard hot bearing detection involves detectors along the
wayside that measure heat on the train as it travels by. The
detection of higher heat leads to alarms prompting a visual
inspection of the bearing. With bearing acoustic monitoring, the
system is "listening" for signs of bearing failure. He expressed
pride in ARRC's use of predictive technology.
MR. HOPP continued with a second example. He remarked that ARRC
is the only short-line railroad with its own geometry car. That
is a boxcar with the ability to predict track flaws or
deviations before the track falls out of class. He furthered
that track structures must remain in a certain class.
2:45:13 PM
SENATOR KIEHL recalled that the last earthquake revealed
evidence of old buried railroad ties and tracks in the soil. He
wondered if the legacy problems require a rebuild to modern
standards.
MR. HOPP replied that ARRC was down for six days after the
earthquake in 2018. He agreed that the event revealed old bad
practices which have since been addressed. He added that
outdated processes are revealed via these predictive
assessments, often before becoming problematic.
2:47:13 PM
MR. O'LEARY transitioned to the fifth item on the strategic plan
which is engagement. The intention is to enhance economic
development, stewardship and stakeholder relations.
MR. O'LEARY moved to slide 35, "Public Engagement."
• Strive to be a good neighbor to our railbelt
communities
square4 Attend local Council and Assembly meetings
square4 Meetings with Mayors
square4 School partnership program
square4 Community Open Houses
square4 Customer Events
square4 Participate in Transportation Fairs
square4 Charitable Donations
square4 Economic Development Projects
• ARRC Board of Director's External Issues Review
Committee
In 1985, the State of Alaska bought the Alaska
Railroad for $22 million, becoming the railroad's
official owner and remaining so to this day
2:49:05 PM
CHAIR KAUFMAN expressed two concerns related to the railroad.
The first concern involves constituent requests for an increased
railroad presence. The second concern relates to interface
management. He asked how a public or private entity establishes
an interface with ARRC. He wondered how an entity might
establish proactive engagement with the railroad corporation. He
reported that constituents approach him as a legislator and
chair of the Senate Transportation Standing Committee asking how
to interface more proactively with the railroad corporation.
MR. O'LEARY suggested initiative-taking engagement. He agreed
that issues simmered over the years and open discussion was
lacking. He encouraged entities with issues to approach senior
ARRC management for an appropriate process or answer.
2:51:58 PM
SENATOR WILSON wondered if the 850 active permit holders might
prefer an improved dispute process. An improved dispute process
might involve public interaction or third-party involvement. He
revealed that his constituents also report seeking better
communication with ARRC.
2:53:17 PM
MR. O'LEARY replied that open communication is the best way to
resolve issues. He acknowledged that the railroad is also guilty
of mistakes. He advocated for open discussions. He remarked that
the creation of a review committee addresses communication
needs. He stated that if a person or entity remains unsatisfied
following a discussion with the appropriate ARRC personnel, then
a board discussion is the next step.
2:54:57 PM
CHAIR KAUFMAN referenced his experience with quality management
and the concept of "voice of the customer." He recalled
committee members discussing the importance of the customer's
voice in an organization. He wondered how a concerned person or
entity might penetrate the tough exterior of ARRC to air
concerns. He looked forward to further conversations with ARRC
about these concerns.
2:55:52 PM
MR. O'LEARY moved to slide 36, "Railroad Corridor Management."
• Real estate holdings consist of ~36,000 acres
square4 14,000 acres (38%) row
square4 8,000 additional acres (22%) operations
square4 14,000+ acres (40%) available for lease
• Permits
square4 850 active permits, 500 in ROW
square4 Types utilities (gas, electric, water, sewer),
cell towers, public and private roads and
crossings, trails, land use permits, track use
and transloading agreements
square4 ROW 2022 permit revenue = $3.8 million
• Application Process
square4 Easy online permitting quiz
square4 Real Estate and Engineering Right of Way
departments provide assistance
• Fee Structure
square4 Application
• Cost-based and varies for type of permit
square4 Land use
• Fair market value
2:57:35 PM
MR. O'LEARY moved to slide 38, "Looking Back and Looking
Forward."
• Addressing challenges, the Railroad will continue moving
forward
• The railroad is a critical piece of transportation
infrastructure in a state woefully lacking in such
infrastructure
• Almost all large development projects in Alaska will need
the railroad
• Alaska has long needed a strong Alaska Railroad and
that's still true
2:58:26 PM
MR. O'LEARY moved to slide 39, "ARRC Centennial - 2023." He
declared that the Alaska Railroad is 100 years old and
celebrating its centennial on July 15, 2023. He expressed
excitement about the celebration of an important institution for
Alaskans.
2:59:09 PM
SENATOR WILSON expressed appreciation for the presentation.
2:59:27 PM
CHAIR KAUFMAN stressed his advocacy for long-term strategic
plans. He hoped to utilize the guidance for all agencies as they
develop and execute plans.
3:00:26 PM
There being no further business to come before the committee,
Chair Kaufman adjourned the Senate Transportation Standing
Committee meeting at 3:00 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Alaska Railroad Corporation Presentation.pdf |
STRA 3/16/2023 1:30:00 PM |
STRA Railroad Presentation |
| Backup ARRC 2018-2023 Strategic Plan.pdf |
STRA 3/16/2023 1:30:00 PM |
STRA Railroad Presentation |
| Backup ARRC 2023 Five-Year Capital Plan.PDF |
STRA 3/16/2023 1:30:00 PM |
STRA Railroad Presentation |
| Backup ARRC 2022 Strategic Goals and Initiatives Status.pdf |
STRA 3/16/2023 1:30:00 PM |
STRA Railroad Presentation |
| Backup ARRC 2023 Corporate Strategic Goals.pdf |
STRA 3/16/2023 1:30:00 PM |
STRA Railroad Presentation |
| ARRC Follow Up Answers to Qs.pdf |
STRA 3/16/2023 1:30:00 PM |
Follow Up |
| ARRC Follow Up Backup 2013 North Pole Rail Project.pdf |
STRA 3/16/2023 1:30:00 PM |
Follow Up |