HOUSE TRANSPORTATION STANDING COMMITTEE February 26, 1994 3:00 p.m. MEMBERS PRESENT Representative Richard Foster, Chair Representative Gary Davis, Vice-Chair Representative Bill Hudson Representative Al Vezey MEMBERS ABSENT Representative Curt Menard Representative Jerry Mackie Representative Eldon Mulder COMMITTEE CALENDAR Public Hearing, Ketchikan, Marine Highway/Transportation Issues WITNESS REGISTER MICHAEL P. DIXON, Regional Director Inland Boatmen's Union P.O. Box 240804 Douglas, Alaska 99824 586-8200 POSITION STATEMENT: Testified in transportation issues. CHERI DAVIS Box 5723 Ketchikan, Alaska 99907 225-6304 POSITION STATEMENT: Testified on transportation issues CAPTAIN ED WILLIAMS P.O. Box 6475 Ketchikan, Alaska 99907 225-2627 POSITION STATEMENT: Testified on transportation issues KENT MILLER Consulting Industrial Economist 500 Front Street Ketchikan, Alaska 99907 225-3992 POSITION STATEMENT: Testified on transportation issues GREGORY A. DRONKERT, Director Alaska Marine Highway System Department of Transportation and Public Facilities 1591 Glacier Avenue Juneau, Alaska 99801 465-8827 POSITION STATEMENT: Answered questions regarding the Alaska Marine Highway System MEREDITH MARSHALL P.O. Box 7418 Ketchikan, Alaska 99901 225-2134 POSITION STATEMENT: Testified on transportation issues LEIF JENKINSON Box 5342 Ketchikan, Alaska 99901 225-5839 POSITION STATEMENT: Testified on transportation issues PHYLLIS YETKA Box 958 Ward Cove, Alaska 99901 247-2449 POSITION STATEMENT: Testified on transportation issues WILLIAM SHERMAN 2433 3rd Avenue Ketchikan, Alaska 99901 225-5042 POSITION STATEMENT: Testified on transportation issues C. L. CHESHIRE, Manager Economic Development Center 512 Lower Pine Street Ketchikan, Alaska 99901 247-5499 POSITION STATEMENT: Testified on transportation issues BRUCE CHAPMAN P.O. Box 6693 Ketchikan, Alaska 99901 225-6745 POSITION STATEMENT: Testified on transportation issues JOHN PETERSON, President Ketchikan Chamber of Commerce 661 S. Pt. Higgins Ketchikan, Alaska 99901 247-2686 POSITION STATEMENT: Testified on transportation issues ERIK NELSON 1173 Black Bear Road Ketchikan, Alaska 99901 225-6371 POSITION STATEMENT: Testified on transportation issues ROLLO E. BRAY 2729 Tongass Avenue Ketchikan, Alaska 99901 225-3505 POSITION STATEMENT: Testified on transportation issues JUDITH JENKINSON Box 5342 Ketchikan, Alaska 99901 225-5839 POSITION STATEMENT: Testified on transportation issues HANK NEWHOUSE P.O. Box 9508 Ketchikan, Alaska 99901 225-1290 POSITION STATEMENT: Testified on transportation issues JOHN RITTERBACH, Purser Alaska Marine Highway System Department of Transportation and Public Facilities P.O. Box 9420 Ketchikan, Alaska 99901 225-9459 POSITION STATEMENT: Testified on transportation issues MAYOR JIM CARLTON 1043 Woodland Ketchikan, Alaska 99901 225-4261 POSITION STATEMENT: Testified on transportation issues ACTION NARRATIVE TAPE 94-6, SIDE A Number 028 CHAIR FOSTER called the meeting to order at 3:10 p.m. He thanked the committee members for attending, and thanked Representative Bill Williams for inviting the committee. He stated that hopefully the committee could give Ketchikan a hand in effecting some changes where they are needed. Chair Foster acknowledged the presence of Gregory Dronkert, Director, Alaska Marine Highway System (AMHS), Department of Transportation and Public Facilities (DOT/PF), whom the committee members had asked to accompany them on the trip as a representative of DOT/PF. He also acknowledged the presence of staffer Denise Behnke and Elizabeth Bellinghiri, Aide, House Transportation Committee. Number 050 CHAIR FOSTER made the point that the six year plan has been diverted, and that the statewide priority system seems to have forgotten the needs of small boroughs such as Ketchikan. Number 060 REPRESENTATIVE BILL WILLIAMS thanked the committee for traveling to the community, and thanked community members in attendance for their concern. Number 070 REPRESENTATIVE BILL HUDSON stated that he hoped the meeting would be constructive, and that he was happy to be back in Ketchikan. Number 080 REPRESENTATIVE GARY DAVIS stated that his area, Seward, has concerns similar to Ketchikan's, and that he was looking forward to hearing the concerns of the people of Ketchikan. Number 088 REPRESENTATIVE AL VEZEY stated that his area, North Pole, was slightly different than Ketchikan, and that they were hoping to eventually get the northern terminus for the AMHS located on the Cheena River. Number 097 CHAIR FOSTER asked that the testimony begin with Mike Dixon. Number 100 MIKE DIXON, Regional Director, Inland Boatmen's Union (IBU) of the Pacific, Alaska Region, was first to testify. He read the following statement into the record: "I would like to thank the House Transportation Committee for allowing us to address them in this open forum. IBU members are over 600 strong in the AMHS. We make up 80 percent of the work force. We all change in Alaskan ports and are all Alaskan workers. This union has done more than the government can do to support the proposition that all workers change in Alaska and live in Alaska. "As the salary of all workers makes up the greater part of the budget, we have a profound effect upon the system. We believe it is the job of the workers to look after their jobs. We don't look after anybody elses job so why should anyone look after ours? We feel that it is incumbent upon each worker as well as the leaders to do what they can to make sure the Alaskan ferries keep running with the best service possible. "We believe it would be irresponsible of the workers to say that it is somebody elses problem whether the ferries give the best possible performance. A force of 600 workers, how they feel about their jobs, how they interact with the system, can have a profound effect upon Southeast Alaska and all of Alaska. Although there is much concern with the present financial situation of Alaska, we urge the committee to keep the ferries running at their former level. Although Southeast Alaska is charged with the service, the AMHS is but a pipeline moving one half of its traffic directly from Prince Rupert and Bellingham to roads leading to Anchorage and Fairbanks. The AMHS is a pump sending hundreds of thousands of people, and tens of thousands of vehicles to the rest of Alaska. Don't shut off the supply that feeds the main arteries of Alaska. Don't let Alaska go into cardiac arrest by starving the pump. We can build many roads in Alaska, but if vehicles can't get to them they can't use them. "We are pleased to know that a new vessel is in the planning and that bids will soon be put out for construction of this vessel. We appreciate the work the House Transportation Committee has done to secure this new vessel. However, we realize that we are faced with an aging fleet. Some of our vessels are over 30 years old. By some standards, a passenger vessel is considered over the hill after 20 years. There may be a chance in the future to secure more federal funding as we did with the present vessel. Also we workers should consider what role we will take in securing new vessels. Possibly there are investments that we can make that will insure new vessels will be built in the future, for the fleet and for their future. "We would also like to thank the House Transportation Committee for its support in re-powering the Taku, the new terminal and ramps, the refurbishments on other vessels, and elevators being installed for the physically challenged. At the same time that the AMHS is urged to make as great a return on its money as possible, the AMHS has been obligated to sail only where it has been proven that no one can make a profit. If it so happens that the AMHS develops a profitable run, then it is often prohibited from operating there. The AMHS, during the peak season, has been run out of Glacier Bay, Tracy Arm, and Columbia Glacier. It is hard to operate a business where it is common knowledge that nobody can make it pay. "We know at this time that a corporation called the Maritime Group out of Seattle has an option to use the YPR terminal for ferry vessels. The idea, as we understand it, is that a foreign bottom ship might run between Seattle and Prince Rupert where vehicles will be picked up by the AMHS ships. Since the Seattle run comes closest to turning a profit, it is easy to see why someone would want to take it over. However, our understanding is that the Maritime Group would only operate in the summer, leaving the AMHS to pick up the unprofitable winter period of having no runs south of Prince Rupert. We urge the House Transportation Committee to help us keep this run which has the greatest change of turning a profit. We have developed this run for over 20 years and we should have a right to operate where a profit can be made. "Along the same lines, we have four gift shops aboard the vessels, yet we are allowed to sell only toothbrushes and postcards, because of fear of competing with shore-side private businesses. Again, we argue that the AMHS is a heart pumping almost half a million passengers and tens of thousands of vehicles to Southeast and the rest of Alaska. The pump has to be fed or it cannot pump dollars throughout Alaska. On the same line of thought, we support the policy of discounting travel to senior citizens, school groups, and physically challenged individuals. However, could not the AMHS be given a credit for the free or discounted service it delivers? Simply because the AMHS interfaces so greatly with the public in contrast to other agencies, is this alone reason to allow it to carry the fiscal shortfall? Shouldn't the cost of supporting school groups, senior citizens, and the physically challenged be shared among all government? We urge the committee to consider a credit to be given the AMHS above and beyond its operating appropriation. "We would like to thank the Transportation Committee for the chance to address them in this open forum. We want to affirm that the IBU is committed to making certain that the AMHS continues its high level of performance well into the future. Thank you." Number 252 CHAIR FOSTER thanked Mr. Dixon for his testimony, and asked if there were any questions. REPRESENTATIVE HUDSON questioned Mr. Dixon of the status of the IBU negotiations. MR. DIXON responded that they appeared to be close to having something for the members to vote on. Number 265 CHAIR FOSTER called Cheri Davis to testify next, and commented that she was a freshman legislator with him. Number 270 CHERI DAVIS thanked the committee for the opportunity to testify, and made the comment that she was there as a concerned citizen with regard to the ferry system and other transportation issues. She asserted that Tongass Avenue and the viaduct repairs were crucial projects needing major work. She also discussed the desirability of a bypass route, for emergencies, which could be accomplished by merely extending a city street. She concluded by commenting on the AMHS budget, which she stated was only "barebones", and that it was particularly critical to the AMHS as it is in a death spiral since it is not only a major transportation link, it is an economic benefit for the region. Number 300 REPRESENTATIVE DAVIS asked if the Third Avenue Bypass was part of a comprehensive plan. Number 310 MS. DAVIS responded affirmatively. Number 325 REPRESENTATIVE DAVIS asked Ms. Davis if there was any community concern about the implications work on Tongass Avenue could have regarding destroying the town's historical character. Number 332 MS. DAVIS responded that there was some community concern on that issue, and that a reasonable approach was desired, but that there was concern with the change in commissioners in that the current commissioner of DOT/PF had his own ideas. Number 345 REPRESENTATIVE HUDSON commented on Ms. Davis alluding to the "death spiral", saying that the Marine Highway fund has probably done more harm than good because it has given legislators who know nothing about the AMHS the impression that it was a fixed, stabilized amount. He asserted that the Marine Highway fund would need to be revisited, because there is no way that the AMHS can get the money to operate the system. CHAIR FOSTER asked if there were any other questions. Number 365 CAPTAIN ED WILLIAMS commented that he had moved into a new home on Second Avenue in 1937, and right after that they began clearing to put in Third Avenue. KENT MILLER introduced himself as the consulting industrial economist who prepared the first study of AMHS maintenance facilities in 1975, in which facility locations in Ketchikan and Seward were recommended. He read the following statement: "The Ketchikan Shipyard opened for business in 1987. During 1988, the shipyard's first full year of operation, gross revenues were approximately $7 million, of which over $3 million was paid in wages to an average of about 60 employees. Additional goods and services were purchased by vessels undergoing maintenance by their own crews while berthed at the shipyard. Still other goods and services were purchased by crew members, operators, outside repair specialists and consultants while their vessels were at the yard. Besides such revenues directly and indirectly from ship repair, most vessel owners using the shipyard saved the running costs and additional down time which would have been required to move their vessels to Washington State or southern British Columbia for service. Other vessel owners benefitted from the yard's availability for emergency repairs. "About half of the shipyard's 1988 revenues were earned from repairs to Alaska Marine Highway System vessels, with the remainder earned from privately owned fishing vessels, tugs and barges, work boats, and passenger vessels, as well as U.S. Coast Guard cutters, other government vessels and B.C. Ferries. "In 1988, the shipyard's performance exceeded forecasts prepared during its planning stages. This performance was achieved while the yard's facilities were substantially incomplete, and without productive use of the yard's undeveloped industrial land. "This track record of the Ketchikan Shipyard corroborates the community's expectations that the facility would serve as a significant new source of primary income in Ketchikan's economy, with widespread benefits to Alaska's maritime industries. "Hearing this testimony, you are entitled to ask first, `Can this be true?' This information is documented by the shipyard's operator and by the City of Ketchikan. The second question is `What went wrong?' From my perspective, the answer to this question is as follows: In 1979, the consulting group in which I participated projected development of a minimum maintenance facility at a cost of approximately $19 million and a fully developed facility for about $29 million. In 1980, $29 million was appropriated for the shipyard's development. Following this appropriation, DOT/PF staff and their consultants prepared a far more ambitious plan for a $40 million minimum competent facility and a $56 million optimum ultimate facility. No additional funding was obtained for the plan, and in 1984, after the initial $29 million was either spent or committed to ambitious civil construction and other improvements, the DOT/PF advised the City of Ketchikan that the project had run out of money and could not be completed. The City then proposed an alternative completion program, which was funded and partly completed in 1987. As a result of this minimum completion of the shipyard, some of its costly civil works, such as the caisson wall fronting Tongass Narrows, which consumed almost half the initial $29 million budget, became redundant as functional elements of a ship repair yard. Other completed facilities used project funds for purposes other than ship repair -- the South Berth was intended for onboard maintenance, painting, and lay-by for the shipyard - - it was expensively adapted as an auxiliary ferry terminal. "At this time, the City of Ketchikan, at the state's request, leased the shipyard from the state and subleased its dry dock and other facilities to the first operator. The city received the state's assurance at this time that the shipyard physical plant would be completed, but only a few improvements were ever made. "In proposing the development of a publicly owned privately operated shipyard, the Port of Portland's Swan Island facilities were used as a model. On this basis, it was planned that the public sector would furnish a complete ship repair yard with all of its essential buildings and fixed equipment. The operator was then expected to furnish mobile and portable equipment and tools. However, in 1987, the Ketchikan Shipyard was subleased to its operator as an incomplete shell, it lacked almost every essential operating equipment item except for $400 thousand in equipment furnished by the city. Moreover, many of its key facilities such as the main wharf and yard areas were left in an unusable state. "The first and second shipyard operators attempted to invest sufficient capital in the shipyard to fill the gap left by the state. They were incapable of doing so, partly because of the size of the required improvements and partly because of the difficulty in collateralizing fixed improvements to a publicly owned subleased property. "This brings us back to the present and to a third question, `Will the state fund a useful package of improvements to enable the shipyard to resume operations?' I believe the benefits of such additional investment in the yard are well demonstrated by its past operations, especially during 1988. "And finally a fourth question, `Can the state organize the shipyard in a manner which will ensure new investment actually benefits its ship repair capability and enables the yard to serve both the Marine Highway and other customers?' In 1987, city organization of the shipyard, as an enterprise department, was an attempt to accomplish this. Today, under AS 29.35.600, passed in 1992, the Port Authority Statute, the state is capable of organizing the shipyard under an independent operating authority. Such organization should be capable of concentrating on the future development and management of the yard on its intended function, which is ship repair, and the provision of badly needed industrial land to ship repair related business. "I am confident that if it is sensibly completed and organized, the Ketchikan Shipyard may still fulfill its great promise to the growth and development of Ketchikan and Alaska's maritime industries." Number 480 REPRESENTATIVE DAVIS thanked Mr. Miller for his historical perspective, and commented that the idea of "past promises" turns up in all sorts of areas, and that this is what the current legislature is having to deal with. Number 500 REPRESENTATIVE HUDSON asked Mr. Dronkert if there has been a determination of what is needed for completion. Number 510 MR. DRONKERT responded that in this year's budget, the figure given is $3.2 million, to bring the facility to the level that it was understood to have originally been intended to be at. Number 525 MEREDITH MARSHALL concurred with the above comments regarding the shipyard and the AMHS. She commented that she favored replacement where possible rather than repair of the viaduct, and that the Third Avenue extension is vital. TAPE 94-6, SIDE B Number 049 LEIF JENKINSON thanked the committee for the opportunity to speak, and stated that he had worked on the ferries for 13 years, and was elected last September (indiscernible). He stated that forums such as the present one were vital for people. He stated that he is an IBU member. He also made the comment the DOT/PF's Commissioner Campbell had made no assurances of maintenance of the existing fleet. He stated that there are, in his opinion, serious problems with the AMHS reservations system, and not due to the equipment, and that revenue was being lost, particularly in the summer. Mr. Jenkinson stated that he hoped the new commissioner and director would listen to the cries from the wilderness. He said the drug of choice on the ferries is Xantac, which is a prescription stomach medication, used because of the high stress on the job. He represented himself as standing ready to help anyone in repairing the relationship between the IBU and AMHS administration. He thanked the committee, adding that the people who work on the ferries believe in the ferries and want to do their best, contrary, he alleged, to the perception. Number 200 REPRESENTATIVE HUDSON stated that there is no legislative policy which precludes the AMHS from making a profit, and that, in fact, the legislature would love to see the ferries make a profit. Number 230 REPRESENTATIVE VEZEY stated that he does not hold bad precedents and doesn't believe what he reads in the papers. Number 235 MR. JENKINSON stated that he felt there should be as few problems as possible going to arbitration, but that the grievances they file don't get satisfactorily answered. He stated that he had over 20 grievances on his desk which added to at least six that were already there. He said some of the grievances might be considered minor, but things can't be solved anymore by phone calls, because he's not able to call personnel directly; rather, he has to deal with the state's labor relations analyst -- a third party. He alleged that the IBU's contract with the state is one of the most complicated in existence, and contains some very strange working conditions, which even he, after so much time in the system, can't understand. Number 300 REPRESENTATIVE WILLIAMS asked Mr. Jenkinson to explain Xantac and its use on the AMHS. Number 305 MR. JENKINSON explained that Xantac is a prescription medication which reduces stomach acid, and likened it to a prescription of Rolaids. He stated that he is on the medication. Number 315 REPRESENTATIVE HUDSON stated that one of the problems with the AMHS is that the system has been taken away from the managers of the system, particularly in labor relations and grievances, and contract negotiations. He asserted that the right place for contract negotiations, at least in preliminary procedures, is with the system itself, which has the best understanding of the system. He asserted that Mr. Dronkert would not be the one to initiate any change in grievance handling, since he works for the DOT/PF, and he appealed to the committee members, instead, to consider as legislators, making such a change. Number 340 REPRESENTATIVE DAVIS stated that the fat needs to be trimmed from the top, so that the worker's jobs are spared, while the excess of chiefs is whittled down. Number 365 PHYLLIS YETKA thanked the committee members for coming down, and for taking interest in the shipyard facility. She asserted that it would be a tremendous boost to the community's economy if the shipyard were operating. She echoed the previous comments on the essential nature of the AMHS to Ketchikan, and the importance of maintaining the system. She concluded by again thanking the committee. Number 383 CHAIR FOSTER made the point that communities need to establish a rapport with the various departmental commissioners, and constantly pressure the bureaucracy to perform. He stressed the uphill battle involved in trying to get understanding away from the Anchorage Bowl, as an example. Number 403 CAPTAIN ED WILLIAMS identified himself as being retired, in 1993, from the AMHS after 30 years and 30 days of service. He asserted that more service from Prince of Wales Island is needed. He also commented that the shipyard won't keep operating with just AMHS vessels; rather, it needs to be equipped to handle other vessels, and perhaps be outfitted with a small store for them to buy their basics, so that they can work on their own vessels. Number 440 REPRESENTATIVE HUDSON asked if there would be a conflict with private enterprise if the state would expand the shipyard facility in the manner which Captain Williams had suggested. Number 451 CAPTAIN WILLIAMS responded that he didn't think there were any existing businesses which would be affected by something like this. Number 457 REPRESENTATIVE HUDSON added that this would be something worth looking into. Number 468 REPRESENTATIVE HUDSON asked Captain Williams what he thought of the suggestions that the Aurora or LeConte be stretched. Number 471 CAPTAIN WILLIAMS responded that he didn't think the idea was a very good one, adding that the only one not messed with was the Taku and it's the best one to handle groups, in fact, the best one in the fleet. Number 482 REPRESENTATIVE DAVIS stated that he would like to see these ideas implemented, but wondered if it shouldn't first be attempted at the private level. He asserted that the first question asked should always be, "Can private enterprise handle it?" TAPE 94-7, SIDE A Number 015 REPRESENTATIVE HUDSON commented that Alaska Industrial Development and Export Association (AIDEA) has looked at the situation, and is considering whether to use some of their money to purchase or operate. He asked Mr. Dronkert if he had a copy of that report. Number 025 MR. DRONKERT responded that he had prepared the report for AIDEA as a contractor, and had incorporated the concept in the report. Number 033 WILLIAM SHERMAN concurred with the ideas of previous speakers, and asserted how critical it was that the money being used for maintenance be guarded. Number 041 C. L. CHESHIRE identified himself as the manager of the Economic Development Center. He distributed a 46 page handout entitled "Ketchikan Gateway Borough Economic Indicators," published May, 1993, by the University of Alaska - Southeast, Ketchikan campus, under a grant from the Ketchikan Overall Economic Development Program (copies may be obtained by calling 907-225-6171), and asserted that the shipyard is a critical element in the diversification of the Ketchikan economy. Number 138 REPRESENTATIVE DAVIS made the comment that there are attempts to close things down which are also getting in the way of diversification of the economy. Number 149 MR. CHESHIRE stated that, as long as we are separated by bodies of water, most industries will be dependant on waterborne freight and trafficking. And if that's a certainty, so too will marine maintenance be a certainty. Number 157 BRUCE CHAPMAN identified himself as a 21 year resident of Alaska and Ketchikan. He welcomed the committee and Mr. Dronkert, and stated that he had worked on the ferry system as a deck hand for 14 years. He wished to address the issue of cutting the operations budget for the AMHS, making the point that a cut in the DOT/PF budget would go directly to the AMHS. He added that he concurred with all of the previous testimony, and asserted that there is the need for a consistent schedule for Prince of Wales Islands. He commented that the idea of a "fast ferry" for Prince of Wales probably wouldn't work, in that it wouldn't be able to handle the vehicular or passenger traffic, or the weather. He concluded by stating that maintenance is an issue to be considered in budget cuts. Number 300 REPRESENTATIVE WILLIAMS commented that the legislature does understand the maintenance issue, and that he had mentioned the concern to the co-chair of the House Finance Committee. Number 325 MS. DAVIS stated that an "around the island" trip of the past, on the ferry, was a real morale booster. Number 331 JOHN PETERSON, President, Ketchikan Chamber of Commerce, stated that the Ketchikan Chamber of Commerce supports the effort to get the shipyard on its feet. He mentioned two difficult issues. The first was the fact that the facility was developed by state government, without the normal supply and demand relationship. He asserted that there needs to be a way to make the place function without unduly subsidizing it. He also expressed concern that cuts within the AMHS, especially in operations and maintenance, will start eroding the passenger base -- the "death spiral" referred to by previous speakers. He expressed enthusiasm with Mr. Dronkert's directorship, given Mr. Dronkert's rounded experience base. Mr. Peterson also discussed the Tongass Avenue issue. Number 500 REPRESENTATIVE HUDSON asked Mr. Peterson what the cost estimate was for the Third Avenue extension. Number 505 MR. PETERSON estimated it to be between $10-20 million, and that they were looking for federal highway dollars. Number 510 REPRESENTATIVE HUDSON asked what the cost estimate was for the Tongass Avenue project. Number 512 MR. PETERSON responded that the project was estimated at $70 million back when they were talking about totally replacing the viaduct. TAPE 94-7, SIDE B Number 020 ERIK NELSON stated that he was concerned about the Murphy Seaplane float facility which was promised in 1992, and wondered if it was still going to take place. Number 026 CHAIR FOSTER stated that he did not know, but that he would find out and contact Mr. Nelson either directly or through DOT/PF. Number 054 ROLLO E. BRAY stated that he was 68 years old, and had been in Ketchikan since the ferries started. He asserted that he was concerned about older/hostel people from "outside" getting ferry priorities over old timers like himself who were born and raised in Alaska and pay taxes here. Number 200 JUDITH JENKINSON stated that she wouldn't be able to testify any better than her husband had, but that, as a city council member, she had a different perspective. She thanked the committee members for their presence, and asserted that it may be time to start thinking about other ways to finance things in Alaska considering that the oil days may be behind us, and people still need services. She likened the marine highway to any other highway in the state of Alaska, and commented that the other highways aren't expected to pay their own way, so why should the marine highway be expected to do so? She asked the legislators to please think about this. She also alleged that the AMHS reservation system is a real problem. Number 475 HANK NEWHOUSE concurred with previous testifiers with regard to the shipyard, emphasizing that it is a key component in Ketchikan's economy. He also stated that people need a place where they can take care of their vessels. He predicted that Air Marine will probably be shut down any day by the Environmental Protection Agency (EPA), and that it may even end up as a Superfund site. He asserted that a cutting-edge facility is necessary to meet EPA's requirements. TAPE 94-8, SIDE A Number 013 MR. NEWHOUSE concluded by stressing the need for the Ketchikan Shipyard facility to be developed completely. Number 068 JOHN RITTERBACH introduced himself as a purser for the AMHS, and stated that he also has to take Xantac for his stomach problems. He concurred with previous testimony regarding the shipyard and AMHS funding. Number 176 MAYOR JIM CARLTON thanked the committee and staff for traveling to Ketchikan, and expressed appreciation that they had toured the shipyard. He asserted that Ketchikan is unique, and has been used by Governor Hickel, as an example, of a community he wishes many others were like. Mayor Carlton stated that he intended to do all he could to try and lift up morale and maintain a positive image. He added that Ty-Matt, Inc., is a top quality, A-1 outfit, with a very positive reputation in Southeast Alaska and Washington. He stated that he felt Commissioner Campbell wasn't much help, and that he needed help in communicating with the commissioner. Number 225 CHAIR FOSTER thanked the mayor for speaking. Number 239 MIKE DIXON commented that the ferries must be given back to the people, referencing trips to Misty Fjords. Number 278 LEIF JENKINSON restated and concurred with previous testimony. Number 380 CHAIR FOSTER asked Mr. Dronkert to comment on the day's testimony. Number 400 GREGORY DRONKERT, Director, Alaska Marine Highway System, Department of Transportation and Public Facilities, thanked Chair Foster and stated that he hadn't come to Ketchikan to push his agenda, rather, he appreciated the opportunity to get a feel for the concerns of those involved. He made the point that many of the issues and concerns were contradictory, but that some were complementary, and that he planned to focus on the ones which were complementary. He asserted that utilization of assets was one of the biggest issues. He cautioned that he would not make promises which he couldn't keep, but that he would promise to look at the issues and prioritize them. He pledged to do everything in his power to address the issues. He stated that, conceptually, the new management team was aware of the concerns of labor, and that the present input and communication was quite helpful. He concluded by expressing disappointment at not being at the negotiating table. Number 450 REPRESENTATIVE WILLIAMS expressed appreciation to Mr. Dronkert and the committee for attending. Number 485 CHAIR FOSTER thanked the community for its hospitality, and recalled being in Ketchikan for the first time six years ago, when he was stranded there because of bad flying. He remarked that the people were very friendly then also. Number 495 REPRESENTATIVE DAVIS stated that it was a pleasure to be in Ketchikan, and that he was happy to see so many people testify. He commented that Ketchikan has been well represented in Juneau, both by Cheri Davis, in the past, and Representative Williams during the current session. He added that, as a former mayor, he became well acquainted with Mayor Stanton. He concluded by stating that Ketchikan issues are not overlooked at the Capitol, and that the Ketchikan contingency visits to Juneau are valuable. Number 525 REPRESENTATIVE VEZEY made the observation that there weren't too many problems expressed in the meeting that couldn't be solved with money. One of the problems, as he saw it, was the generation of new sources of wealth, since there currently wasn't much money available. He asserted that the only way to generate new sources of revenue was through the development of resources. Number 543 REPRESENTATIVE HUDSON added that he wished to thank the people of Ketchikan who supported and helped place the Frank Initiative on the ballot. Number 549 CHERI DAVIS expressed appreciation to Chair Foster for allowing her to sit with the committee, and lauded him for his unfailing support of the AMHS, finding it especially noteworthy considering his origins in Nome, where there is no ferry service. She also commented on the restructuring taking place in the National Guard which seems to be centered around having more focus on Anchorage. She suggested that perhaps the Military and Veteran's Affairs Committee keep their ears open on this issue. Number 579 CHAIR FOSTER adjourned at 6:30 p.m.