Members of the Southeast Conference presented their progress on the Alaska Marine Highway Reform project at the organization’s annual meeting Wednesday.
Representatives from Elliott Bay Design Group and McDowell Group, firms hired to complete phases one and two of a plan to create a long-term plan for a sustainable ferry system, presented economic, governmental, operational and financial data and made recommendations for how the Southeast Conference and AMHS should proceed.
Phase two of the project was finished this month. Executive director Robert Venables said Southeast Conference has been working on this initiative for two years.
Alaska Department of Transportation Commissioner Marc Luiken endorsed their recommendation to move AMHS to a “forward funding” system.
“I believe it is essential both for long-term sustainability and short-term viability of the system,” Luiken said.
The ferry system is currently funded by state general funds, appropriated by the legislature and by sales revenue. Use of all funds must be approved by the legislature. The ferry system releases its summer schedule every January without knowledge of what its operating budget will be.
Luiken said the system worked well while appropriated funds were consistent from year to year, but AMHS has seen a reduction from $112.5 million in 2015 to $75 million in 2018.
“Forward funding would commit a certain amount of (general fund) funding not just for the coming year, but ideally for the next two or even four years,” Luiken said.
Another recommendation is to transform the ferry system into a public corporation. It is currently under the jurisdiction of the state DOT. The system would be managed by a seven-member board of directors appointed by the governor, but it’s “not a complete divorce from state agencies” due to a need to receive state and federal funding.
“We continue to believe the marine highway can be restructured as a public corporation,” said McDowell Group consultant Susan Bell. Bell said the public corporation model would allow for AMHS to be managed consistently.
She said that currently, “With change in administration is a change in the plan.”
A financial evaluation revealed standardizing the ferries would increase revenues. The work also found that the system’s most profitable stop in Bellingham “is essentially subsidizing service to everywhere else.” Non-Alaskan residents provide 42 percent of the system’s operating revenue. Labor is the largest expense, and modernization of the boats will cutback the workforce.
After taking an informal poll of the annual meeting attendees, Venables said it is the “will of Southeast to work toward a transition” for the ferry system. Southeast Conference is also looking for online feedback on phase two at http://www.amhsreform.com.