2018 Alaska General Contractors Annual Conference ALASKA MARINE HIGHWAY SYSTEM
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1 2018 Alaska General Contractors Annual Conference. ALASKA MARINE HIGHWAY SYSTEM
2 Alaska Ferry Transportation Act The first Alaska Legislature approved the Alaska Ferry Transportation Act in 1959, authorizing the new Department of Public Works to acquire ferry terminals and regulate ferry operators. In 1960, Alaska voters statewide approved a bond proposition to invest in a marine highway system, with additional ferries and docking facilities. Operations of the Alaska Marine Highway began in 1963 with four vessels.
3 The Fleet 1966 and 1970 The State expanded the fleet with three new vessels due to the passage of bonds New ships and increased capacity meant new ports of call Expansion included Alaska Peninsula and the Aleutian Chain The Alaska Marine Highway operates an extensive 3,500 mile route with a fleet of nine* vessels
4 Marine Transportation Advisory Board
5 Marine Transportation Advisory Board The Marine Transportation Advisory Board (MTAB) may issue reports and recommendations and shall, in cooperation with the department, prepare and submit to the Department of Transportation and Public Facilities (DOT&PF) and the Governor for review a strategic plan that includes the mission, core values, objectives, initiatives, and performance goals of the Alaska Marine Highway System (AMHS). The board may establish volunteer regional advisory committees. After the Commissioner of Transportation has considered one or more candidates for the position of Director or Deputy Commissioner of the Alaska Marine Highway System, the Commissioner shall confer with MTAB regarding that candidate or those candidates before making an appointment to the position.
6 Alaska Marine Highway Reform
7 AMHS: A System in Crisis Funding and schedule uncertainty State funding cut by 30 percent over five years Service level and revenue declines Short-term planning horizon 7
8 AMHS: A System in Decline Aging fleet Kennicott Columbia Tustumena Malaspina and Matanuska
9 AMHS: A System in Decline Frequent turnover in leadership positions 9
10 AMHS: A System in Decline Outdated labor and management relations 10
11 AMHS Reform Team Governor, Lieutenant Governor, and Administration Southeast Conference Statewide Steering Committee Contractors Elliott Bay Design Group McDowell Group KPFF Engineering Consultants 11
12 Statewide Steering Committee Chair: Dennis Watson - Craig Dave Kensinger - Petersburg Greg Wakefield - Anchorage Elizabeth Bolling - Ketchikan Shannon Adamson - Juneau Josh Howes - Anchorage Will Ware - Juneau Sharon Hildebrand - Fairbanks John Whiddon - Kodiak Dan Kelly - Ketchikan Michael Anderson - Cordova Dennis Bousson Skagway Ex-officio DOT Commissioner Staff: Robert Venables 12
13 Multi-Phase Project Mission, Goals, and Governance Completed May 2017 Strategic Operational and Business Plan Completed November 2017 Legislation HB 412 introduced April 2018 Interim Measures Identified Implementing now 13 Fleet/Terminal Standardization, and Continued Outreach
14 Phase 1 Examined mission, goals, and governance Statewide summit Stakeholder interviews Case studies of other ferry systems Mission statement refinement Analysis of alternative governance models Recommended further exploration of public corporation 14
15 Purpose Deliver safe, reliable, and sustainable marine transportation for Alaska residents, visitors, and our commercial customers. 15
16 Phase 2 Created long-term operating and business strategy Revenue analysis Operations analysis Operations financial model Structure and benefits of public corporation Public and stakeholder engagement 16
17 Revenue and Traffic Analysis AMHS carried Alaskans from 175 communities Fairbanks North Star Borough 3,316 passengers, 1,409 vehicles Fairbanks, Ft. Wainwright, North Pole, Eielson, Salcha, and more Bethel Census Area 218 passengers, 52 vehicles Aniak, Kipnuk, Kwethluk, Sleetmute, and more 17
18 Revenue and Traffic Analysis Visitors using AMHS also travel Alaska s road system 51% visit Anchorage 36% visit Denali 26% visit Seward 25% visit Fairbanks 23% visit Homer 22% visit Valdez 18
19 Public Corporation Analysis Maintains existing benefits Inter-departmental coordination Public purpose of system Access to federal funding Addresses limitations Frequent turnover in senior leadership Indirect labor negotiations Short-term planning horizon Additional benefits 10 Incorporate board expertise Operate in business-like manner Align labor and management interests Reduce labor costs strategically
20 Additional Findings AMHS will always require public funds to provide safe and reliable transportation Personnel and travel account for 69% of operating budget Best opportunity for revenue growth is through stabilized funding Transitioning to a modern and standardized fleet creates critical cost savings Use revenue and market analysis to guide actions Bellingham is an essential revenue source (44% of total) Non-residents account for 42% of revenue 20
21 Phase 3 Build structure and momentum Legislation introduced (HB 412) Sustaining public support Identify interim measures 21
22 Interim Measures Actions that can be taken now Work toward a sustainable, business-like organization Align with longer-term objectives 1: Stabilize Funding Increase revenues and align with seasonality 2: Fleet and Terminal Standardization Financial and operational efficiencies 3: Robust Market and Revenue Analysis Allows AMHS to deploy resources effectively 13
23 Interim Measures cont. 4: Address Labor Relations Negotiate directly; reduce labor costs strategically 5: Board Development Phase 2 recommended 7-member board 5 with needed business/transportation expertise AND 1 representative of union employees Seated as soon as possible to assure a smooth transition to the public corporation 14
24 Interim Measures cont. 6: Corporation Development Advance preparation needed for smooth transition 7: Employee Communications Improved, but further face-to-face meetings needed 8: Explore New Revenue Sources Non-operating revenues, partnerships, concessions, and shoreside potential 9: Maintain Public Support Continue project momentum 15
25 Project Sponsors Platinum Top Contributor: Ketchikan Gateway Borough 16 LEGACY CONTRIBUTORS City & Borough of Juneau City of Ketchikan City of Valdez First Bank Haines Borough State of Alaska BRONZE SPONSORS Central Council Tlingit Haida Indian Tribes of Alaska City and Borough of Wrangell City of Cordova City of Craig City of Pelican City of Thorne Bay City of Unalaska Cordova Chamber BENEFACTORS Alaska Committee City and Borough of Sitka Lynden Inc. BRONZE SPONSORS cont. Greater Sitka Chamber The Landing Hotel Ketchikan Huna Totem Hyder Community Association Inter-Island Ferry Authority Madison Lumber & Hardware Marine Engineers Masters Mates and Pilots Union Petersburg Chamber of Commerce SILVER SPONSORS City of Kodiak Ketchikan Marine Industry Council Municipality of Skagway Prince William Sound Economic Development District Vigor, Ketchikan Alaska BRONZE SPONSORS cont. Petersburg Economic Development Council Sitka Economic Development Association Sitka Tribes of Alaska SouthWest Alaska Municipal Conference (SWAMC) Travel Juneau Wrangell Convention and Visitors Bureau
26 Thank you! Help us build support Stay informed Financial Legislative outreach Public outreach Robert Venables, Executive Director Southeast Conference 17
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