SB 27 FERRY SYSTEM HEADQUARTERS IN KETCHIKAN  Number 463 CHAIRMAN WARD announced that SB 27 was the final order of business before the committee. JOE AMBROSE , Staff to Senator Taylor, read the following sponsor statement into the record: Ten years ago, Acres International, a Canadian firm contracted to study the Alaska Marine Highway System, reported what it termed "an extraordinary degree of mistrust between ship and shore that has its root in the overall relationship between management and staff". Acres stated flatly that "ship systems and operations cannot function in isolation from the shore, both are interdependent. There must therefore be an effective dialogue between the two, outside union contract negotiations. Planning forums for the ship to understand management's prerogatives, and the shore to respond to ongoing needs of each vessel are essential". In the decade since the Acres Report, little has happened to end the isolation between ship and shore and many believe the situation described 10 years ago is worse today. SB 27 has been called a "jobs grab" bill, intended to help Ketchikan's ailing economy. Such charges are untrue. Senate Bill 27 is intended to end the isolation between the fleet and the administration. Locating some or all of the administrative offices on state-owned property adjacent to the Ketchikan terminal would end that isolation and put the administration within walking distance of the fleet. It is apparent the administration of the Marine Highway feels threatened by even consideration of this move. At the end of November, in reaction to media reports that a bill would be introduced addressing this issue, the Marine Highway director prepared a request for proposals. That RFP called for an economic analysis of relocating the AMHS administrative office to Ketchikan. The RFP had an ambitious timeline. It was released on December 2, 1996 with a proposal deadline three days later, on December 5. The RFP originally called for completion of this $25,000 study by January 15. That deadline has now been extended and a draft report is due by March 15. The system director told the Finance Sub-Committee on the DOT/PF budget that he had received an initial draft, which has been returned to the contractor for further review. AMHS has declined to provide the Senate Transportation Committee with a copy of that draft. The relocation of some or all of the administrative offices to Ketchikan is not a new idea nor was it prompted by concerns over the Ketchikan economy. It was prompted by a valid concern over the continued isolation of the Marine Highway administration from the very fleet they are hired to manage. In response to Senator Lincoln, CHAIRMAN WARD confirmed that SB 27 would not be passing out of committee today. SENATOR LINCOLN inquired as to Senator Taylor's response regarding the lack of vacant office space in Ketchikan and the need to construct a building for this purpose. How much would such a building cost? SENATOR TAYLOR believed that there is available office space, but those offices are about a mile from the terminal. Senator Taylor emphasized the need to have the offices on the site of the terminal which will require a new building. Senator Taylor informed the committee that the Ketchikan Borough may be willing to provide some, if not all of the finances and lease the building to the state. In response to Senator Lincoln, Senator Taylor indicated that the employees would be given the opportunity to transfer. He believed that it would be the state's responsibility to pay for the moving costs, if the employee decided to transfer. However, Senator Taylor pointed out that it would be an insignificant one time expenditure. Senator Taylor believed that Mr. Hayden could inform the committee to the cost of the move. CHAIRMAN WARD interjected that SB 27 was being held so that the Administration could provide the committee with a report that is not quite final. Mr. Hayden would not be testifying today, but he could provide that at the next hearing on SB 27. SENATOR LINCOLN asked if some of the offices would remain in Juneau, and if so which positions and what would the additional travel costs be. Senator Lincoln also inquired of the cost of travel for face to face discussions between the government and the AMHS if located in Ketchikan. CAPTAIN JAN SANDE , Master on the Aurora, concurred with Mr. Ambrose's comments regarding the Acres' report. Captain Sande discussed the great communication between the crew and the administration in the 1960s when the offices were located in downtown Juneau. When the sailings moved to Auke Bay, the communication was lost and the problem has increased every year. Captain Sande believed the move to Ketchikan was important and he supported SB 27. SENATOR LINCOLN asked how the communication would improve by moving the offices to Ketchikan. CAPTAIN JAN SANDE believed that person to person communication has an aspect not found through communication on the phone or through writing. The proximity of a building on the property allows better communication. TAPE 97-7, SIDE B Captain Sande indicated that personal contact is imperative, there is not time for all the written communication. Number 580 CAPTAIN ERV HAGERUP , Columbia, echoed Captain Sande's sentiments regarding the lack of communication between the ship and the shore. The ships and shoreside should be in proximity to have a dialogue. Currently, the ships are ignorant about the goings on with the fleet and often rumors are heard from the Stewards Department. Captain Hagerup recalled that during his 30 years, there have only been three masters meetings with the office. What other agency has the main people in the field only meet once every 10 years? In conclusion, Captain Hagerup emphasized the need to address the problems with communication regardless of where the office is located. In response to Senator Taylor, Captain Hagerup informed the committee that he had been with the AMHS for about 31 years. In response to Chairman Ward, Captain Hagerup reiterated that not much communication is received from the office. Captain Hagerup noted that he did have good communication with the port captain to whom he called to determine which rumors were valid. Better communication is necessary. CHAIRMAN WARD asked if anyone else wished to testify. ROBERT GLENN , 15 year AMHS employee and union representative on the Executive Board, agreed with Captain Sande's, Captain Hagerup's and Mr. Ambrose's testimony. Mr. Glenn believed it logical to have at least some of Juneau's Central Office (JCO) personnel in Ketchikan due to the other facilities located there. Mr. Glenn agreed with Mr. Ambrose's comments regarding the Acres report and hoped the committee would address the concerns presented in that report. Mr. Glenn said that he had given Senator Taylor a brief report. Communication is a problem. Mr. Glenn said that dispatching would be an appropriate area to move to Ketchikan in order to better communication regarding grievances. Mr. Glenn emphasized the need to downsize the support services of JCO no matter its location. The JCO positions should be reviewed and determinations regarding the importance, efficiency and money made from the positions should be done. The managers on the AMHS have done just that on the ship for years. Mr. Glenn noted the growth of the JCO. Mr. Glenn stressed the importance to know from where the money to move the facility to Ketchikan would come. Taking money from the operating budget for that purpose would be unacceptable. Mr. Glenn discussed a scenario in which the ferries' schedule is not amenable, services decrease and the prices rise which result in less riders. Mr. Glenn also pointed out that JCO does not participate in the winter reduction that the ferry crew experiences each year. CHAIRMAN WARD noted that Senator Taylor had shared the report with the committee. With regard to the money being taken from the operations budget, Senator Taylor has shared that concern with the committee as well. Chairman Ward asked if anyone else wished to testify. Hearing none, Chairman Ward held SB 27 at the request of the Administration. JOE AMBROSE requested that the initial draft of the report be submitted to the committee by Mr. Hayden in order to track the changes requested by DOT. CHAIRMAN WARD stated that Mr. Hayden agreed to provide that initial report. There being no further business before the committee, the meeting was adjourned at 2:45 p.m.