Budget cuts to impact ferry service; new vessels on track


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Construction of the Alaska Class ferry designed for day trips in the Lynn Canal is set to begin in mid-2014.

Rendering/Courtesy/Alaska DOT&PF

The Alaska Marine Highway System strategy to manage budget cuts while working to update its ferry fleet drove the discussion at the latest Marine Transportation Advisory Board meeting.

With a busy summer season absent the M/V Tustumena, which was out of service for repairs in Seward six months longer than expected, still fresh on everyone’s mind AMHS General Manager Capt. John Falvey laid out the plan to replace the “Rusty Tusty.” Falvey said the $10 million from the state’s Vessel Replacement Fund dedicated to designing a new ferry would still be enough to fully complete pre-construction work.

Until the design is completed and a shipyard is chosen to build the vessel its final cost will be unknown, but it will likely be “several hundred million dollars,” Falvey has said.

Department of Transportation and Public Facilities Deputy Commissioner Reuben Yost said the state is following federal procedures in the preliminary stages of the design to keep federal funding options open.

A major component design and cost estimate is about a year out, according to Falvey. Until then, AMHS officials will spend time examining each of the terminals the Tustumena serves, he said.

AMHS also has public participation meetings about the Tustumena replacement planned for Kodiak, Homer and Dutch Harbor in January.

In early November, AMHS contracted with marine engineering firm The Glosten Associates of Seattle as consultants on the project.

Falvey added that the route the Tustumena traditionally runs — from Southcentral out the Aleutian Islands — limits how its replacement will look.

“The new Tusty is probably going to have to be similar to the old Tusty,” Falvey told the 11-member coastal community board Nov. 13.

The new ferry won’t be any smaller than the Tustumena at 296 feet because much of the route is exposed to open ocean, Falvey said. Preferably, it would be closer to a 500-foot ferry, he said, but cost considerations combined with small docks at some of the Aleutian ports will limit it to about a 340-foot maximum.

At 382 feet, the M/V Kennicott was unable to dock at all of the ports in the Aleutians when it was used as a fill-in during the 11 months the Tustumena was out of service, Falvey said.

The Tustumena can carry 174 passengers and has space for 36 standard and 12 large vehicles on its car deck.

Falvey said new technology should allow for an unmanned engine room on the new ferry, saving on operating costs.

Board chair Bob Venables of Haines said replacing the 49-year-old ferry is the board’s top priority because of its importance to the transportation infrastructure of Western Alaska.

Kodiak mayor and board member Pat Branson said her community experienced about a 25 percent drop in tourist activity from reduced ferry service while the Tustumena was out of commission.

Before there is a new Tusty, the plan is to have two Alaska-class ferries built. Construction on the first of the 280-foot “day boats” — without crew accommodations or passenger cabins — is on schedule to begin in mid-2014 with delivery of the vessels in 2016, DOT’s Yost said.

“When we have the first boat isn’t as important to us as when we get the second boat,” he said.

Once both vessels are running their Lynn Canal routes between Skagway, Haines and Juneau, AMHS plans on retiring one of its mainline vessels. Despite adding one ship in sum, efficient engines and smaller crews — 44 crewmembers for both day boats versus 80-plus for one mainliner — will cut Lynn Canal operating expenses from $22 million to $15 million annually, Yost said.

Mainliners will supplement the day boat service on the four to five-hour trip with two runs per week in summer and one in winter he said.

Delivery of the second ferry is expected to come six to nine months after the first vessel is finished, but is also part of the final contract negotiations with Alaska Ship and Drydock Inc. in Ketchikan, which is the firm currently expected to build the ferries, according to Yost.

Alaska Ship and Drydock, or ASD, is a primary maintenance facility for the 11-ferry AMHS fleet.

He said the $118 million state-funded budget for both ferries is still seen as ample. No Federal Highway Administration funds were accepted for the project so the state could ensure it was done in Alaska.

Yost said AMHS and ASD officials were “fairly close” on their respective construction cost estimates. The state hired the Seattle-based naval architect firm Elliot Bay Design Group to put together a bid on the roughly 1,000-line item contract to better gauge the competitiveness of ASD’s guaranteed maximum price, he said. Those negotiations should start around mid-February.

As for the specifics of the ferries’ design, they will accommodate up to 300 passengers and about 50 vehicles each. The solariums, popular with ferry goers on other vessels, will be familiarly located towards the rear of the vessels. Yost said the areas open to passengers were kept as far aft as possible for a smoother ride in the sometimes rough waters of Lynn Canal.

The theaters found on other AMHS ferries were left out of the preliminary design released Sept. 30. Yost said they were replaced with lounge space based on public response to earlier concepts.

“We heard from folks that they don’t mind get drinks from vending machines but they want to have foods similar to what’s on the fast ferries in terms of hot soups,” he said.

Hot water will also be available to those who want to prepare their own meals, according to Yost.

Money-saving measures

The state ferry system has enacted a multi-prong approach to close a $3.5 million funding gap for fiscal year 2014, Falvey said.

AMHS absorbed the 2 percent cut while the rest of DOT’s divisions saw a combined operating budget increase of more than 13 percent. Its operating budget is funded completely by the state, while major vessel improvements are often done with federal dollars.

Service reductions are projected to account for $2.2 million in annual savings, making up for a bulk of the shortfall through fuel and labor cost savings. Next July, service between Ketchikan and Annette Bay on the M/V Lituya will be cut from 12 hours per day to nine hours.

Going forward, service between Sitka, Angoon and Juneau on the M/V Fairweather, one of the two fast-ferries in the system’s fleet, will begin in mid-May, according to an AMHS report. That service was set to begin in February, however the Fairweather will already be unavailable early this spring due to a scheduled engine replacement.

Summer service between Juneau and the system’s lone Canadian terminal at Prince Rupert, British Columbia, originally to start June 1, will commence July 1. Falvey said service was decreased on several routes with low ridership rather than cutting service to one or two communities altogether — something AMHS won’t do, he said.

Two of the system’s seasonal promotions are now things of the past — a $1.1 million savings for fiscal 2014. The 30 percent “mirror-image” roundtrip discount for travel from November to March as been eliminated. The summer “driver goes free” discount for mirror-image trips with a vehicle was also ended.

“We don’t like cutting the discounts out, but we don’t think we hurt ridership that much,” Falvey said.

Additionally, AMHS will no longer pay travel agent commissions for authorized military travel and in-state travel by Alaska residents. That change takes effect May 1. Because it will only be in place for the last two months of the fiscal year — May and June — the 2014 savings are estimated to be $96,000. With a full year it’s projected to save $448,000 in fiscal 2015.

Yost said commissions on military and resident travel were cut because those trips would have been booked whether or agencies marketed them. Prior, up to a 10 percent commission was paid on such trips, he said.

“We really wanted travel agencies to focus on riders we wouldn’t otherwise have,” Yost said.

Commissions for out-of-state travel and nonresident bookings won’t change, he confirmed.

The system is also no longer mailing schedules. Falvey said the hope is to save about $50,000 per year in postage costs. Doing away with paper schedules is part of a plan in the works to revamp the AMHS’ online reservation system, which will eventually include a mobile phone app, he said. Sailing schedules will still be available at all AMHS terminals.

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