Alaska Marine Highway Reform

September13,2018

AMHS Reform Team

• GovernorWalker,LieutenantGovernor,andAdministra5on• SoutheastConference• StatewideSteeringCommi=ee• Contractors•  Ellio=BayDesignGroup• McDowellGroup• KPFFEngineeringConsultants

Statewide Steering Committee

•  Chair:DennisWatson-Craig

•  DaveKensinger-Petersburg•  GregWakefield-Anchorage

•  ElizabethBolling-Ketchikan•  ShannonAdamson-Juneau

•  JoshHowes-Anchorage• WillWare-Juneau

•  SharonHildebrand-Fairbanks•  JohnWhiddon-Kodiak

•  DanKelly-Ketchikan• MichaelAnderson-Cordova

•  DennisBousson–Skagway•  Ex-officio–CommissionerLuiken

•  Staff:RobertVenables

Multi-Phase Project

! Mission,Goals,andGovernanceCompletedMay2017

! StrategicOpera5onalandBusinessPlanCompletedNovember2017

! Legisla5onHB412introducedApril2018

! InterimMeasuresIden5fiedImplemen5ngnow

• Fleet/TerminalStandardiza5onandCon5nuedOutreach

Phase 1

• Examinedmission,goals,andgovernance•  Statewidesummit•  Stakeholderinterviews• Casestudiesofotherferrysystems• Missionstatementrefinement• Analysisofalterna5vegovernancemodels

• Recommendedfurtherexplora5onofpubliccorpora5on

Purpose Deliversafe,reliable,andsustainablemarinetransportaDonforAlaskaresidents,visitors,andourcommercialcustomers.

Phase 2

• Createdlong-termopera5ngandbusinessstrategy• Revenueanalysis• Opera5onsanalysis• Opera5onsfinancialmodel•  Structureandbenefitsofpubliccorpora5on• Publicandstakeholderengagement

• AMHScarriedAlaskansfrom175communi5es•  FairbanksNorthStarBorough

•  3,316passengers,1,409vehicles•  Fairbanks,Ft.Wainwright,NorthPole,Eielson,Salcha,andmore

• BethelCensusArea•  218passengers,52vehicles•  Aniak,Kipnuk,Kwethluk,Sleetmute,andmore

Revenue and Traffic Analysis

• VisitorsusingAMHSalsotravelAlaska’sroadsystem•  51%visitAnchorage•  36%visitDenali•  26%visitSeward•  25%visitFairbanks•  23%visitHomer•  22%visitValdez

Revenue and Traffic Analysis

Public Corporation Analysis

• Maintainsexis5ngbenefits

• Addresseslimita5ons

• Addi5onalbenefits

"  Frequentturnoverinseniorleadership"  Indirectlabornego5a5ons"  Short-termplanninghorizon

"  Inter-departmentalcoordina5on"  Publicpurposeofsystem"  Accesstofederalfunding

"  Incorporateboardexper5se"  Operateinbusiness-likemanner"  Alignlaborandmanagementinterests"  Reducelaborcostsstrategically

Additional Findings

• AMHSwillalwaysrequirepublicfundstoprovidesafeandreliabletransporta5on•  Personnelandtravelaccountfor69%ofopera5ngbudget•  Bestopportunityforrevenuegrowthisthroughstabilizedfunding•  Transi5oningtoamodernandstandardizedfleetcreatescri5calcostsavings

• Userevenueandmarketanalysistoguideac5ons•  Bellinghamisanessen5alrevenuesource(44%oftotal)•  Non-residentsaccountfor42%ofrevenue

Phase 3

• Buildstructureandmomentum•  Legisla5onintroduced(HB412)•  Sustainingpublicsupport•  Iden5fyinterimmeasures

Interim Measures

• Ac5onsthatcanbetakennow• Worktowardasustainable,business-likeorganiza5on•  Alignwithlonger-termobjec5ves

• 1:StabilizeFunding•  Increaserevenuesandalignwithseasonality

• 2:FleetandTerminalStandardizaDon•  Financialandopera5onalefficiencies

• 3:RobustMarketandRevenueAnalysis•  AllowsAMHStodeployresourceseffec5vely

Interim Measures cont.

• 4:AddressLaborRelaDons• Nego5atedirectly;reducelaborcostsstrategically

• 5:BoardDevelopment• Phase2recommended7-memberboard•  5withneededbusiness/transporta5onexper5seAND1representa5veofunionemployees•  Seatedassoonaspossibletoassureasmoothtransi5ontothepubliccorpora5on

Interim Measures cont.

• 6:CorporaDonDevelopment• Advanceprepara5onneededforsmoothtransi5on

• 7:EmployeeCommunicaDons•  Improved,butfurtherface-to-facemee5ngsneeded

• 8:ExploreNewRevenueSources• Non-opera5ngrevenues,partnerships,concessions,andshoresidepoten5al

• 9:MaintainPublicSupport• Con5nueprojectmomentum

Project Sponsors Platinum Top Contributor: Ketchikan Gateway Borough LEGACYCONTRIBUTORS•  City&BoroughofJuneau•  CityofKetchikan•  CityofValdez•  FirstBank•  HainesBorough•  StateofAlaska

BENEFACTORS•  AlaskaCommi=ee•  CityandBoroughofSitka•  LyndenInc.

SILVERSPONSORS•  CityofKodiak•  KetchikanMarineIndustryCouncil•  MunicipalityofSkagway•  PrinceWilliamSoundEconomic

DevelopmentDistrict•  Vigor,KetchikanAlaska

BRONZESPONSORS•  CentralCouncilTlingitHaida

IndianTribesofAlaska•  CityandBoroughofWrangell•  CityofCordova•  CityofCraig•  CityofPelican•  CityofThorneBay•  CityofUnalaska•  CordovaChamber

BRONZESPONSORScont.•  GreaterSitkaChamber•  TheLandingHotelKetchikan•  HunaTotem•  HyderCommunityAssocia5on•  Inter-IslandFerryAuthority•  MadisonLumber&Hardware•  MarineEngineers•  MastersMatesandPilotsUnion•  PetersburgChamberof

Commerce

BRONZESPONSORScont.•  PetersburgEconomicDevelopmentCouncil•  SitkaEconomicDevelopmentAssocia5on•  SitkaTribesofAlaska•  SouthWestAlaskaMunicipalConference

(SWAMC)•  TravelJuneau•  WrangellConven5onandVisitorsBureau

Thank you!

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