JOINT SENATE & HOUSE TRANSPORTATION COMMITTEE MEETING February 25, 1999 1:30 p.m. SENATE MEMBERS PRESENT Senator Jerry Ward, Chairman Senator Drue Pearce, Vice Chair Senator Georgianna Lincoln HOUSE MEMBERS PRESENT Representative Beverly Masek, Chair Representative Bill Hudson Representative Jerry Sanders MEMBERS ABSENT Senator Rick Halford Senator Mike Miller Representative Andrew Halcro, Vice Chair Representative John Cowdery Representative Allen Kemplen Representative Albert Kookesh OTHER LEGISLATORS PRESENT Senator Robin Taylor COMMITTEE CALENDAR Overview and Discussion by Mr. Brian D'Isernia, President of Eastern Shipbuilding Group; Mr. Jack Gilbert, Naval Architect, Boston; and Mr. Bruce Gilbert, Haines. ACTION NARRATIVE TAPE 99-4, SIDE A CO-CHAIR WARD called the Joint Senate and House Transportation Committee meeting to order at 1:37 p.m. Present were Co-Chair Masek, Senator Pearce, Representative Sanders, and Co-Chair Ward. CO-CHAIR WARD announced the presence of Senator Robin Taylor. BRIAN D'ISERNIA, President of Eastern Shipbuilding Group (ESG), Inc., introduced John Gilbert, a naval architect with John Gilbert & Associates in Boston, who would be assisting Mr. D'Isernia in his presentation. MR. D'ISERNIA provided the following background information about ESG and information on the types of ships it manufactures. ESG is a medium-sized aluminum and steel construction shipyard located in Panama City, Florida, with about 400 employees. Since 1976, ESG has delivered about 200 vessels; approximately 18 were ferries, ranging from 60 to 300 feet in length, and ranging from high-speed aluminum gas-turbine powered craft, to diesel powered craft. In 1997, ESG delivered a 200' ferry, named the "Block Island," to a customer in New London, Connecticut. The "Block Island" was a third generation ferry, each generation having improved upon its predecessor. ESG was contacted by Senator Taylor and various mayors of Southeast Alaska communities who were interested in this particular ferry as a type that could meet the needs of Southeast's inter-island transportation system. MR. D'ISERNIA described the "Block Island" as 208' in length, 40' in width, and 14' in depth. It is United States Coast Guard (USCG) certified for lakes, bays, and sounds, which is the required certification for inter-island transportation in Southeast Alaska. It is USCG certified to carry 1000 passengers, and approximately 45 vehicles, and it is capable of carrying three extended-length tractor trailers in place of 20 cars or trucks. Maximum speed on sea trials was 18.2 knots, and its normal operating speed is 17 knots. The "Block Island" route is from Pt. Judith, Rhode Island, to Block Island, Rhode Island, a 13-mile run in an exposed area of the North Atlantic with 15-foot seas in the winter. This boat was designed as a winter boat; it contains a lower deck house to minimize windage for better control in small harbors. The two turbo-charged engines have a total horsepower of 4,000 and they meet California emission standards which are quite strict. The ship has a 250 horsepower bowthruster, and the rudder design allows the vessel to turn within its own length. He noted the ship was designed by John Gilbert, with input from the Block Island operators. Crew requirements were minimized by the ship's tonnage design, to save the operator money. Its fuel consumption is a relatively modest 140 gallons per hour, its minimum draft is 9+ feet, and the vessel was built with camber and sheer to allow water to run off the deck. He emphasized that this vessel has been designed, built, and tested, thereby eliminating the risk of dealing with variables inherent in a new design. Number 254 CHAIRMAN WARD asked if all 1000 passengers could sit inside of the ship. MR. D'ISERNIA said it is a combination of inside and outside. The inside seating capacity is approximately 350; the total USCG carrying approved capacity is 1000. He added excess passenger capacity in Southeast occurs during the summer months when people are more amendable to sitting outside. CHAIRMAN WARD announced the presence of Senator Lincoln and Representative Hudson. MR. D'ISERNIA gave a slide presentation that included photos of the "Block Island" and ESG's shipyard. He noted that he and Mr. Gilbert will be visiting several port facilities in Southeast. Number 329 SENATOR TAYLOR asked what distance the vessel requires to turn in. MR. GILBERT replied it turns in about 1-1/10 lengths. He explained the rudder design is similar to an air foil design. REPRESENTATIVE HUDSON asked if ESG manufactures the wheels on the shafts. MR. D'ISERNIA replied it does not, but the propellers are shipped to its machine shop for a certified fit. Number 447 SENATOR LINCOLN asked where the propellers are manufactured. MR. D'ISERNIA answered the shafts and propellers are manufactured in the United States by [indis.] Johnson, but the rudders are made in Germany. SENATOR LINCOLN asked if parts are easily attainable for the rudders. MR. D'ISERNIA replied it is advisable to keep two spare propellers and one spare rudder in stock to minimize downtime. SENATOR TAYLOR pointed out the Kennecott needed a part replaced on one of its two engines. The part arrived 10 days later from Europe and was replaced, except shortly thereafter, the same part on the other engine broke. MR. D'ISERNIA clarified that he was not advising that a spare rudder be available solely because it is manufactured in Germany, but also because replacing a rudder is a time-consuming job, requiring the vessel to be pulled out of the water. Number 490 JOHN GILBERT stated that, because rudders are always vulnerable to damage, his company always sets up with the original manufacturer a spare parts machine shop which would probably be located in Ketchikan. The machine pattern would be in that shop so that a new one could be built, if necessary. He noted he tries to keep parts made by foreign manufacturers to a minimum but has found these rudders to be quite durable. CHAIRMAN WARD asked if enclosing some of the passenger areas with plastic would affect the stability of the vessel. MR. D'ISERNIA replied it would not affect the stability, but might upset the wind heel calculations. CHAIRMAN WARD asked if 350 passengers would sit on the passenger deck, and 650 would sit on the top deck. MR. D'ISERNIA replied the vessel is certified, safe, and stable to carry 1000 passengers in the worst stability criteria mode, which would be on the top deck; therefore the vessel can hold that many. He repeated it can only seat 350 indoors. SENATOR LINCOLN asked what the width of the vessel is in the bow. MR. D'ISERNIA answered the vessel width is 40 feet; however, the width at the spot Senator Lincoln referred to is about 25 feet. SENATOR LINCOLN expressed concern that the 40-foot width would not accommodate the vehicular traffic in Alaska, such as motor homes and vans. SENATOR TAYLOR responded the busiest ferry in the state, which hauls more cars, passengers, and vans than any other, is 85 feet long and operates out of Ketchikan. TAPE 99-04, SIDE B SENATOR TAYLOR also noted the longest run contemplated for Southeast is three hours, and most runs would take 1+ hours. He asked what the useful life of the engines is. MR. D'ISERNIA replied about 35,000 hours, stating that the engines can be rebuilt many times. MR. D'ISERNIA stated the price of the vessel, as configured, cost less that $10 million. Delivery time is about 10 months, with succeeding vessels at two-month intervals. He repeated this vessel has a proven record, and he extended an invitation to legislators to ride the vessel. Number 500 JOHN GILBERT added the vessel was designed to meet USCG requirements for lakes, bays and sounds, however it is also capable of being designed for "ocean service" with a reduction of top-deck passengers. The American Disabilities Act requirements were partially met; the vessel contains a wheelchair lift and handicap accessible bathrooms. He described the water, fuel, and sewage tank capacities, and other mechanical features that meet USCG regulations. The original design was constrained by the State of Rhode Island's dock maximum width requirement of 40 feet, and a 9+ foot depth. CHAIRMAN WARD asked if the "Block Island" regularly encounters swells of up to 15 feet. MR. GILBERT replied it can actually encounter breaking waves of 15 feet. The area often has short, steep, heavy seas. CO-CHAIR MASEK asked about maintenance costs. MR. GILBERT said the standard package, which includes full-kit replacements for liner, piston, valve cages, etc., is $3500 per cylinder. The only other problem that occurs on occasion is a teething problem with the turbo chargers. CO-CHAIR MASEK asked what the most common maintenance problem is on this ship. MR. GILBERT said these particular engines use quite a bit of lubricating oil, but this engine is the most user-friendly for licensed engineers. CO-CHAIR MASEK asked for a comparison of the Rhode Island area weather and Southeast Alaska. MR. GILBERT replied the Rhode Island area can experience about two weeks of -9 degrees and 40 to 50 mile per hour winds. CO-CHAIR MASEK asked if the "Block Island" travels in open, unprotected waters. MR. GILBERT said it does, but that some of Southeast's passages are open. SENATOR TAYLOR added that a few of Southeast's passages are exposed, but Southeast Alaska does not experience as many days of severe cold as the Northeast does because of its maritime climate. SENATOR TAYLOR calculated a major rebuild at 35,000 hours would take place at 11+ years if the vessel operated nine hours per day, 365 days per year. CO-CHAIR WARD asked if the sleeves need to be replaced every four years. MR. GILBERT replied they need to be replaced on these engines about every four to five years, but on fishing boats they run for 8,000 hours each year. Number 391 SENATOR LINCOLN asked about the fuel consumption. MR. GILBERT replied when the vessel is running at 17 plus knots, and turns at 850 rpm, it burns 140 gallons per hour. SENATOR LINCOLN asked Mr. D'Isernia if he would be willing to hire Alaskans to assist in building an Alaska ferry. MR. D'ISERNIA said 2+ years ago ESG employed about 120 people; that number is 400 today. ESG has been looking for people to hire and would not be adverse to hiring qualified Alaskans. SENATOR LINCOLN asked Mr. D'Isernia if he would be willing to include such a provision in a contract. MR. D'ISERNIA said he would, and in addition, he has been exploring with a local shipyard owner the possibility of forming a partnership which would be advantageous for routine maintenance. Number 350 SENATOR TAYLOR confirmed that discussions have taken place with the owners of the Ketchikan shipyard, and that a shipyard is also located in Seward. He added that he has spoken to seven different companies about building a ferry, and that although the Ketchikan shipyard is limited in its manufacturing capacities, many possibilities for partnerships exist. SENATOR LINCOLN said she brought the topic up because Alaskans welded the oil pipeline, and it looks as though a lot of welding will need to be done on a steel ferry. Number 329 REPRESENTATIVE HUDSON indicated he would like Alaska's ship people to review any plans and suggest modifications. He said he would like to speak to the operators of the "Block Island" about how the ship functions. JOHN GILBERT said his firm has designed over 100 ferries for various areas of the United States, including Maine, the Great Lakes, Lake Champlain, Martha's Vineyard, all with differing requirements. Number 302 CO-CHAIR WARD introduced Bruce Gilbert from Haines, Alaska. BRUCE GILBERT, owner of a catamaran ferry, The Silver Eagle, informed committee members he had with him literature from the 15th International Fast Ferry Conference in Boston. He then referred to a two-page outline he provided to committee members, and made the following comments. In 1994, the phrase "fast ferry" was considered a dirty word; however, in 1995 people began to see the advantages. Fast ferries are vessels that travel at 25 knots or more. As a Haines resident for 34 years, he became engrossed with the problems with the Alaska ferries and decided that Haines needed a private, high speed ferry to Juneau. Determining the feasibility of a ferry route requires the consideration of three factors: the geography of the area; demographics; and economics. Southeast's geographical make-up and distance from Seattle is conducive to a good ferry route; its demographics are not. He stated he would like to see the Legislature establish a fact-finding committee of four to six people to study the feasibility of the use of fast ferries in Southeast. He suggested the fact-finding committee consist of a pilot, a former director of the Alaska Marine Highway, a former terminal manager, a shipyard owner-operator, and a naval architect. He emphasized the need to remove the politics of management of the Alaska Marine Highway System, to remove the union's ability to veto management's decisions, and to look at the use of fast ferries to provide the level of service that passengers want by establishing an advisory board of panhandlers to improve Southeast's ferry service. He stated, "With the impending budget crisis due to low oil prices where we have to either tap our permanent reserves or pay state income taxes, we must improve our ferry system. I believe we should do it soon and along the direction of fast ferries." He recounted the financial problems he had in trying to start a fast ferry business in Southeast. Number 167 SENATOR TAYLOR asked Mr. Gilbert why he lands his ferry in Echo Cove rather than Auke Bay. MR. GILBERT said for reasons of cost, as the increased distance is 25 miles. SENATOR TAYLOR noted the Alaska ferries travel an extra 50 miles on a round trip to Skagway because the Marine Highway will not locate a terminal at Echo Cove. He asked Mr. Gilbert how long he has operated from Echo Cove. MR. GILBERT said since 1995, and he added the state ferries on that route average 6+ miles per hour, which includes port time. CO-CHAIR WARD thanked Mr. Gilbert for providing committee members with literature from the International Fast Ferry Conference. He asked Mr. Gilbert to meet with Senator Taylor's staff about the fact-finding committee. CO-CHAIR MASEK also thanked participants for attending and providing the committee with information. SENATOR TAYLOR noted that Representative Hudson asked him to relay to committee members that the State could have purchased and had delivered ten of the 200-foot ferries for the same price it paid for the Kennecott. Had four or five of the smaller ferries been purchased, SENATOR TAYLOR asserted that interconnecting roads and terminals also could have been constructed. TAPE 99-5, SIDE A CO-CHAIR MASEK asked Mr. Tom Brigham and Mr. Bob Dahl if they would like to make any comments. BOB DAHL, General Manager of the Alaska Marine Highway, said he was delighted to speak with Mr. D'Isernia and Mr. Gilbert because their proposal dovetails well with the Southeast Plan. He noted when the Alaska Marine Highway System was first designed 35 years ago, it was to be a long haul system to carry passengers from Bellingham or Prince Rupert to Skagway. That system has advantages and disadvantages that remain to this day. One feature of the Southeast Plan is to adopt a point to point service for which a "Block Island" type ferry would be ideally suited. He repeated he was interested to hear the presentations before the committee today. Number 058 SENATOR TAYLOR showed a map of Southeast Alaska and the proposed ferry routes that would connect to logging roads within the Tongass National Forest. He discussed the new possibilities that could result from an interconnected system of smaller and faster ferries. CO-CHAIR WARD thanked all participants. He asked Mr. Brigham and Senator Taylor's staff to work with Bruce Gilbert regarding a fact- finding group. He adjourned the meeting at 3:20 p.m.