Morning everybody. I'd like to go ahead and call the Senate Finance Committee to order
Monday February 2nd
With me today is senator keel senator Merrick senator Kauffman, senator kronk
Senator Hoffman senator Olson will be joining us here in a few minutes
We have one item on the agenda today
We're going to talk about the marine highway. We'll have an overview
And to present and have a discussion from the Department of Transportation and public facilities, we have the commissioner,
Mr. Henderson, Ryan Henderson if he can come forward, along with Don Pannon, the Director, Program Management and Administration.
And I guess we had the Deputy Commissioner, right?
Yes.
And we're going to be straightforward today with the Finance Committee.
Please answer their questions truthfully and directly
Don't concern yourself if we like the answer or not
We'll work through those those issues
I'd like to welcome the group here today to help us with this. This will probably be a follow-up meeting on this subject
When sometime in the relatively near future
After we get a little bit further into the budget
We have been joined by Senator Olson and
And our other co-chair, Senator Hoffman
With that if you can introduce yourself for the record
Who you're presented and then take us through your presentation and we'll do one slide at a time and take questions
Yes, thank you, Chair Steadman and thank, you to the Senate Finance Committee for having us here today
For the record, my name is Ryan Anderson, and I'm the commissioner of the Alaska Department of Transportation and Public Facilities.
For today, the focus for today is on the Rural Fairy Program,
which is a discretionary grant program that began with the Infrastructure Investment and Jobs Act
when that new surface transportation bill was issued.
Through the rural ferry program just to get everybody up to speed on all the past awards that we've received and and
And how we kind of progressed through that with progress and then talk about the
2026 program and where we're at with the financials on that if that's okay, sure
Okay, so we'll go to the first slide
And so this slide really just outlines the the program the authorization that was made available that made these funds available
It's Section 71103 of the Infrastructure Investment and Jobs Act.
One billion over five years is what it authorized, and it was about 200 million annually for
competitive grants.
We had to apply for these grants meeting the criteria is defined.
And as you can see, we included the Criteria here because Eligible Service was a criteria
It allowed Alaska to be very competitive in applying for these grant funds, particularly
this criteria that you serve not less than two rural areas located more than 50 miles
apart.
So this program has been, we've been very successful in securing funds through the program over
the years as we'll go through.
And you can see that, you know, the precise amount available for program awards annually,
The other unique thing about this program is it received five years of advanced appropriations.
So that means it was created and fully funded in the same bill.
So I think that's important as well as we go through this presentation.
For the record, Catherine Keith, Deputy Commissioner, Department of Transportation and Public Facilities.
We first saw the original Lotus of Funding opportunity in 2022.
This was the implementation of this program.
As you can see, we've had five different grants from the Rural Fairy Program.
In addition to this,
we also received an award for the Low NOAA Mission Fairy program
of 46 million in federal funds.
And that's for our high efficiency shuttle fairy.
Overall, $252 million available for this program.
And this year, that was awarded nationally.
Alaska received $239 million of it.
Our strategy here was to combine a focus
on new vessels modernization of the.
along with modernization of our existing fleet.
The Testamine Replacement Vessel was awarded 68 million.
We had a program for modernization
of several vessels that received 72 million,
we also had modernization
of docks ferry terminals for 45 million
and operating funds of 45,000,
with this program we are able to apply
Operating costs, the operating costs in this program are restricted to 50% of our net operating
costs on an annual basis.
So this period gave you this balance to kick us off and help us identify eligibility for
this Program for future years.
One thing to call out is that given the match requirements with this program, which is 20% of non-federal funds.
This initiated the department's efforts to establish the Alaska toll credit program.
While we had toll generating assets prior to 2022, we have not yet collected toll credits.
What toll credits allows us to do is use our federal funds as match.
from having to use general funds to match this federal program.
So we've continued to run this program every year since.
And in our statewide transportation improvement program,
we have over the next four years, over 80 million
in toll credits, which, again, means
that that's a savings on the general fund of that amount
each time we use toll credit.
Before you go to the Next slide, I guess,
I helped the committee a little bit on the toll credits,
especially the public, maybe give us a brief explanation how they work
and how much is actually said, if I heard you right, they haven't been paid yet to the state.
And are we talking about the 22 year FY 22 on this slide, or can you help us with that?
Yeah, Chair Stedman, I'd like to defer to Director Dom Pannon, who was pivotal in kicking
this program off.
Mr. Pronome, you've worked on this for several years.
We need a little more detail.
I guess where we're at.
For the record, Dom pannon I'll ask a DOT.
So the toll credit program is an allowance in federal law in Title 23 that allows the
state to get a credit for toll revenues that it reinvests back into a toll facility.
And because the plastic marine highway system is classified as a toll facility,
when we reinvest AMHS revenue back into our overhauls,
we get a conceptual credit that we can use to waive the match on other federal projects.
So we got a balance sheet of credits, and when get grants like these we're able to use that credit.
These grants with other formula federal funds instead of the state match
So we've saved the State approximately sixty six million dollars in match
to date and been able to
Capture these new federal programs
Okay, so this balance sheet which is a snapshot in time of a physical position
Can you give us an idea the amount on that balance she didn't in the
Application of those credits to other match projects
Absolutely
So to date the the credits have been applied to several projects the 66 million is is fully allocated
I believe there's
Roughly 37 million program to the tuss-amino replacement vessel where we're combining
Our federal highway ferryboat funds with the FTA awards that we've had
And using those match credits to fund the testimony replacement vessel. They've also been applied to I believe or are slated to be applied
to
several dock and terminal projects and goon and and cake I
Believe but we can provide the record of their use
Yes, that would be handy if you could give us
basically the balance sheet annually the
so we can see how many of the credits accumulated and then what they were
expensed on would be helpful. It is kind of an abstract,
fairly new concept we're using here that has helped the state quite a bit.
It was pretty creative or clever that the department noticed that and went
after those credits, but it'd be
helpful for the committee to watch the annual in and outflow of those
You have other questions on the senator teal you look like you have a question and thank you, mr
Minute it really is a an innovative way to move forward and I appreciate the department's work up just an ignorant
mechanical question
You call them conceptual credits. They're not a check from Uncle Sam
So do you got an 80 20 project?
It's cost a hundred million dollars and we use conceptual credit for our 20
We get 80 from Uncle Sam or we get a hundred from uncle Sam
Through the chair senator keel excellent questions, so you're correct
So if we have an 80 20 project where we've we got an award for 80 percent of the federal funds
And we use our tool credits to match the 20 percent
We can then use other funds. They don't have to be state funds to Match
So our strategy has been to use the ferryboat program
on the federal highway side to transfer those funds to FTA to then fill that 20% gap and the
toll credits allow us to do that and that amplifies the value of the ferryboat program funds
that we already receive.
And maybe when you get back to the committee you can, with the balance sheet,
have that refresh their memory as we move on through the year because it'll come up again in the future here.
Any other questions on slide number three?
We'll go in then to FY23, grant award year, slide four.
In 2023, the department had a very targeted strategy
in completing the Testa Mina replacement vessel funding.
And again, we applied for operating funds for 38 million.
The Testumina Replacement Vessel received 92 million,
so of the total nationwide ferryboat program awards
of 170, Alaska received 131 million
I don't have any questions on that.
Yes, go ahead, Senator Kauffman.
Thank you through the chair.
The diesel electric boats, when they were first being proposed,
there were folks that were concerned
that we were getting into kind of new green deal,
bleeding edge, not going to work,
be expensive propulsion systems.
And could you?
Just give me a characterization of that seems to be a core propulsion technology as it's
currently practiced in the marine industry for ships such as these or if it is indeed
something that is more linked to an environmental agenda that might be unstable funding going
forward.
Through the chair, Senator Kauffman, yeah, thank you with the rural ferryboat program and its low-no-emission ferry
Program we were able to apply for and receive that forty six million dollar award
So that particular program is targeted for electric but the process
with
researching and developing the planning, the design for the
Testimino Replacement Vessel, in addition to that program, led
the team to come to some conclusions about the amount of
savings in our operating budget that a more modern diesel hybrid
propulsion system would give us. So for example, diesel mechanical
vessels are significantly outdated when you look globally at
and what's being constructed.
So being able to be future-proofed to enable the system to adapt as we move forward, if
there's different fuel types, different global requirements as you do have a vessel in international
waters, these things did require us to take a look at our propulsion system, which is
what we're moving forward with now.
It's a hybrid system.
And that battery isn't so that we can go full electric,
but that does allow us to...
take full advantage of the peaks that come with waves
when the vessel is underway and other things
so that it is a significant operating savings to have that.
So there is the International Maritime Organization
has global requirements where the Alaska Marine Highway System
would be penalized if we don't show emissions reduction.
So, there's a financial incentive there
as well as operating saving.
for a hybrid system outside of environmental benefits.
For it seems to work for locomotives.
Thanks.
Yeah.
Senator Hoffman.
Thank you, Mr. Chairman.
Ms. Keith, when was the 2023 grant application submitted?
To the chair, Senator Hoffmann.
We have timelines here in a couple slides.
But what we have noticed is once the NOFO is released,
it's about 180 days before it is awarded.
So the 2023 applications, the noFO went out,
the notice of funding opportunity went on on May 18th.
So given a typical 60-day period to submit the applications
while we would have submitted that in June or July,
we can give you exact dates.
Can you help us with the Ketchcan to Metla Catla ferry and for those watching, that's
the shortest run.
I think we have in the system where if we were to have an electrical run ship, it might
be more applicable than going across the Gulf and have you run out of a, have a dead battery.
Can help with that?
Yeah, Chair Sedmond certainly with the southeast conference we had completed a fairly thorough
Preliminary design of the vessel the lono emission ferry vessel or the shuttle ferry and what that indicated was that
There are a couple routes where this could be successful to have a fully electric system one was on that route metla katla
To catch a can it just because of that shorter distance that
Electric ferry could go back and forth and then char get charged in ketchikan. That was one option
secondly was from
and in combination with the taslina that would allow us to
again have some savings and increased service in Northland Canal.
Any other questions on slide four?
Okay, we'll go to slide five.
And last, we have the 2024 awards and again you see the same targeted strategy to complete
the funding portfolio for the testimony and replacement vessel and operating funds as
well.
We did apply for and received funds to install Starlink to finally get Wi-Fi on board our
On these grants for 24
Is there any grant money that we're waiting for out of Washington?
These three years and maybe 25
Yeah, Chair Stedman at this point these are all fully available to the Department for obligation and money's that aren't available
Is any money is that are not available?
Not no not at. This time, okay
Senator keel. Thank you mr. Chairman
the 24
Amount for operations bumped up more than 50% from the two years prior can you talk to us about that?
Yeah through the chair
Senator Keel the operating program it does allow us to
Again, we have 50% of our overall operating net operating cost, but that is based on the
past three years average.
So as operating the cost had increased within AMHS, then that allows for a higher dollar
amount for that request.
It's just based upon that pure 50 percent of the prior years operating, net-operating
cost.
through the chair, Senator Keel.
It's based on actual prior years.
Thanks.
Slide number six, I guess.
For the record, Don Penone.
So with all the awards that Alaska's been very successful
in retrieving, we've received three operating grant awards
and seven total.
capital grant awards, the capital grants being just under 400 million and the operating
grants, being 150, just 100 and 50 million, those are federal dollars.
And so grant award to date that Alaska is captured with this program is $548 million.
We've got a list of notable projects, largest of course, which we just released the project
And again, this program also spurred the creation
of the toll credit program, which we've already discussed.
You're done with this slide?
Okay. Could you talk to us a little bit
about the broader concept, about this step,
and did this Program, that pretty much credit
to Senator Murkowski, did it supplant or add
The federal money coming into the state for their normal transportation program
Yeah, mr. Chairman
this money
once we got it
Did have the department refactor?
Which projects we were going to use which dollars for so in the past?
The department has received a formula allocation based on ferry miles ferry passengers and cars transported
through the Federal Highway Administration called the ferryboat program.
And this new program was on the federal transit administration,
caused us to refactor and add additional projects
and allowed us fund projects that we knew we needed to do,
and we're only looking for funds for.
Okay, if you could maybe get back to the committee in a little more detail
because what I'm curious about is the added value that this is brought to
Brought to the table for getting projects done around the state
including all our general highway projects and
Looking for the net gain of total capital dollars
That this is impacted versus just a transfer similar to when we did the
Bridge in ketchikan years ago where it was an additive on top of the normal allocation to to a DOT
Yeah, Chair Stedman, Ryan, for the record,
Ryan Anderson, yeah, absolutely.
I mean, this was dollars added to our overall program
as discretionary grants, competitive discretionary
grants.
And in addition to this, we were also successful
with the Maritime Administration,
with additional additive grants that
helped us with our dock infrastructure for ferries as well.
And then, so there's several programs
So, you know, it adds, so it doesn't, the ferry system doesn t necessarily burden on
the highway side, I think, is what you're saying, and then we can continue with that
focus on the ferries to get these good projects that are needed done.
So we could absolutely provide you that list, if it's okay, we would include these other
funding sources as well.
Yeah, would be helpful for us to understand the magnitude of the benefit of this program.
Thank you, Mr. Chairman. I was flipping back and forth and I I may have missed a slide. The last one was
grant year 24
It's now calendar 26. It is both state and federal fiscal 26 where can you tell us about 25?
For the record don't put on I think that's a good segue to our next our
Next slide here if I made mr. chairman just say before we go to any more questions on this slide
Okay, we'll go to the next slide and then maybe you could try to roll in senator keel's a answer to your presentation on this slide
Absolutely. Thank you, mr. Chairman. So
The current our current years calendar year 26, which was appropriated in fiscal year
Several years back the state used a large portion of covid funds to fund an additional six months of operating for the ferry system
which put us
which pushed us back to a calendar year,
which gave us more time between session
and the budget cycle that we would be on.
So since going to that budget,
we then received three consecutive years
of operating funds from this grant program,
which we've used every year in our budget.
And that was in 24, we used in fiscal year 24.
We used those in calendar, year 25.
So looking at calendar year 2026, which was appropriated last session,
we received $170.7 million in our operating budget.
Within that budget, there was $77.9 million of FED slated for
the department to receive a grant from the FTA Rural Fair Grant Program.
That represents 45.6% of our budget
And the UGF in our budget would be used to match those funds if we were successful in getting that grant.
Last fall, we did not, and last summer,
we didn't see a notice of funding opportunity, which we had seen in the three years prior.
And notice the funding opportunities was not released for this grant and has still not been released to this Grant.
So currently, right now we have a shortfall in
You can see the dotted line there. The 77 million is the federal funds. We have yet to receive for the current calendar year
So if you're short 77.9 million, how do you cash flow? I'll put with that
Thank you, mr. Chairman. So right now I we are looking at
several options and we're working with our
Congressional delegation and the Federal Transit Administration
on continuing to pursue a grant for the current operating cycle.
On top of that, we're looking at several other options.
But at this point right now, I think what we are, as far as cash flow,
we've got enough marine highway funds and unrestricted general funds
to continue operations into May.
At that point, we're going to be switching to our summer schedule.
So right now, our target is to have resolution by May, and at that
point we would be releasing our Summer Schedule.
We would have to know by then, if we need to make any changes accordingly for our budget.
But help me with what's going on in Washington, because it's a long ways away.
But what kind of risk are we facing that these funds don't move out of Washington?
And then you get tied up and rolled forward into the next major transportation bill.
And this is an extended, and they actually extinguish the money that they haven't put out.
Can you help us with that?
Yeah, Chair Stedman for the record, Ryan Anderson.
Yeah this has something that's been on our mind.
I mean, we've been working with the federal transfer, talking to the Federal Transit Administration.
We're going to make a trip to DC to have further discussions so that we make sure they
understand the implications and the importance of these funds for the Alaska Marine Highway
System.
What is going on in Washington, DC?
That's always a tough thing.
We work with our CODEL, our congressional delegation, to help us understand where we're
at on that front, and so I think you're gonna see in the next month a lot of focus on this
particular issue and and you know ways forward we're absolutely looking at you
know the system and what are the options here for scenarios if for some reason
we aren't successful in securing the funds the total amount of funds partial
amount the fund and so we'll be working through that here as well some things
we are looking and these are healthy things for us because we dig deep and
cost savings could be achieved.
The Matt Nuska, for example, that's a vessel, right?
It's the oldest vessel in the fleet.
It has been tied up and it serves as our hotel ship.
We're able to, with the Kennecott coming out of the capital
program and getting the re-power work done,
both the Kennnecot and Columbia now,
we'll be working independently,
right, we will be switching out for service between the two.
And so one of those vessels can be available as a hotel
So, disposing of the Matt Newskit this time is something that, you know, we're looking
at that we very much are interested in doing because it also apply that it
also factor in that cost savings here in the next few months that could
contribute and kind of extend the time that
we have to resolve this issue as well. So looking at all those types of options
to really, make sure we are doing what we can in this situation and get
Dealing with the Marine Highway, I think he has some interest in the subject also.
So help me understand the, you know, we were on an 18-month schedule and then there could
be a 12- month appropriation and it's their time-lapse concerns.
We should be aware of or, and the point of these questions and discussion is cash flowing
and ensuring that we have a transportation system
after we leave and wrap up this year's budget.
That will be in existence when we reconvene a year from now.
Yeah, Chair Steadman.
Yeah I'll let Director Pannon speak a bit to the calendar
and the fiscal year operating budgets.
I guess the one thing that I would say when that we're looking at closely because these
federal grants require match.
The timelines of the grants and that requirement, the timeline requirement for the match is
important in how we are looking these funds and when we can secure them.
The match has to be there and so even if we were to let's say get two years of grants
in a following year, you know, with the match situation that just might, it doesn't quite,
the calculations don't work out.
So with that, let me let Director Panone talk a little bit about them.
Mr. Panome, can you help us, and maybe for people back home, kind of cover the older
12-month, then we went to an 18- month look ahead, give us a low background on that before
you roll into your answer, otherwise it might get confusing for the public.
Frank, it's probably be confusing for some of the people at the table and in the room
Thank you, mr.. Chairman for the record Dom Penone, so
during the
Pandemic the state received
over a hundred and eight million dollars from the federal highway administration and
In that year one of The uses that the State chose to use that money for was to
give the AMHS an extra six-month appropriation and
then a
one-year appropriation
So we got 18 months of funding all at once
So typically in the past our our
Fiscal or budget cycle was from July till June. We got a July to December six month portion and then
a calendar year portion
So from then on we've received 12 months
appropriations of funding and continued to stay on the calendar year.
So that gives the system an additional six months of runway
between when session ends or when the budget passes
that we cannot adopt those changes, whatever they are in the
budget.
So we're on a calendar here at AMHS.
The rest of the state follows the fiscal year appropriations.
is for calendar year 26 and the money that we're requesting in the governor's budget is
for the calendar of year 27.
In the Governor's Budget, we are also requesting instead of the appropriation starting January
1st and ending at the end of December that simply we have a two year time span to use
the funds we get so that at end our funding we can roll to the next.
the next set of funding and if we have a surplus of funds we can carry those forward and
if have deficit we roll to the funding sooner and work with the legislature the
next session. So as the budgets proposed right now the calendar year 27 funding would be available
July 1st and I think the question is could we role to that funding early if
And the point for us is that once we get this grant,
we do have to pair it with UGF in our budget.
So at $70 million, we have
to come up with 20% of UGF.
And so the further we go in time,
the greater that whole becomes that we
have match the federal funds.
If we if we're rolling into the next year's budget that just creates a
Greater need in the following year for federal funds and whether or not we can match it within the same year
That creates the challenge for for doing that
And we'll have you back
when we work on the budget I think to
Lay this lay this out in in a calendar format
The concern is that these federal monies don't materialize in time and we fast-forward roughly
a year and were out of cash.
And we'll be at the very beginning of a budget cycle halfway through this year, fiscal year.
And won't have a supplemental available until four or five months later.
I'm dealing with the Marine Highway and the lack of throughput from Washington and some
of these funds and impact it has, plus our budgets are getting tighter and taking away
the flexibility that the committee has to backfill some of the holes and this particular
I think that's one of the things that we'd like you to work with OMB on and the committee
And we'll have you back
And oMB to go in more detail
Laying out the cash flow scenarios
So in the event that, we have problems
We're not faced with a shutdown of, the marine highway or reduction in service
Beyond, what we already have, which some will argue is below par to start with
Does that sound like a reasonable way forward, Mr. Commissioner?
Yes, sir.
Chair Studman, yeah, that sounds great.
Yeah, and that'll give OMB time to look at this.
I think the awareness or the concern of this particular issue surfaced before it did at OGB
and I thank the department also.
I feel a little more sensitive to it or a concern about it looking forward.
which we've done here this morning about these grants in the cash flow there but now we're
going to look from we want to concentrate from here which is January over the next 18 months
and make sure that calendar months and makes sure our transportation system could function
and if it can't and there's adverse risk then we have some discussion here on how to mitigate that
caught flat-footed and the citizens of the state aren't caught with no transportation or diminished transportation.
Senator Keel.
Thank you, Mr. Chairman.
Couldn't agree more.
Part of reason for going to the calendar of your funding was to get schedules out earlier.
Ticket sales and cardiac sales
And thus the amount of revenue coming in
So I understand the department has has not been able to do that in the last year or two
Be good to get back to that, but I understanding right now
We have a federal chaos problem
So, I just mr. Chairman agree completely that we need to together with OMB in The Department
Make sure we do everything at the state level we can
So that federal Chaos doesn't create
chaos
at the state level.
To that end, let me ask that you please also
loop in the Department of Laws.
We talk about shifting authority between fiscal years.
There was a squabble six, seven years ago
in another department about what could be done that way.
And we don't want any surprises here.
So please have those conversations early
so that we come up with backstops and solutions
that last and that work. Thank you.
So I was hoping we'd get into it in a little more detail today for the committee, but as
far as the next 12 to 18 months, we have time. It's only our third week. But we need to
work with the administration to get a clear view of what's coming at us and it may not
The department gets back from Washington with newer information.
But we definitely want to not ignore this and again work with the administration
because we can fund it and the governor can veto it or we could not fund
it, and you can't operate.
So we need to work jointly.
We also want stability within our workforce.
next winter and we have a shrinking schedule or we're tying up the whole
darn fleet. So we've got to come up with a process, a collective way, I think
would be the best. We have any other questions any, Senator Kauffman?
Thank you. Just a thought for the committee to be
A report on the earned value so if we spend a million what where we at as we're spending
Are we on trend where are we getting behind in terms of of the value for the money that
We've already you know have been recently spending on any project work you're talking
broadly around the state or on them, right? Well
Right now narrowly within within this I guess it's a it something to think about
You know
for all of our spending, what are we getting for what we're spending?
Mm-hmm.
Beauty's new, I had to behold her.
I guess if you use the Marine Highway, it's pretty sensitive
in the furob area that you never use it.
It's probably, you'd rather have more potholes fixed.
I think it comes from your viewpoint,
but we definitely need a transportation system,
and the department's been very creative in helping
with the marine highway with these grants.
And toll credits.
They don't get much credit for that.
That was, I think, a very good move so far.
So that credit goes to the department, Senator Kauffman.
Yes, we're just, you know,
staying out of the pot hole argument.
So I, think we,
we measure progress on pot holes for,
for pothole sake,
but then on the marine highway,
and in its realm,
how are we doing on those projects as far as money spent,
of work that's being done on ongoing efforts.
And we'll also have the opportunity,
when they come back, they can give us an update
on the Tuscamina bid process,
and also where we are on The Next Ferry.
That'll get into the cash flow discussion as we look forward.
We have other questions on this slide.
On to the next slide, slide number eight.
For the record, Don Penone.
So, this slide provides an outline of what we've felt was a predictable cycle of the notice of funding opportunities for these funds over the last three years, except for this last summer.
In July 11th of 2022, as we mentioned, we got that first notice of funding opportunity.
And within 199 days received the grant awards, in the subsequent year it was May.
We received notice awards in November 196 days later.
And then in 2024, it's April that the notice came out.
And in September, that we get the Notice of Award 152 days.
Quicker returns on that program and you know those are roughly the timelines we we could expect
But what we are tracking though is that in this program
There's still four hundred and ten million dollars left as the commissioner said at the beginning of this presentation
When the program was authorized it was also funded at that same time. So we're going to continue to work with
You know our partners when we go to Washington DC to advocate
For a return of the notice of funding opportunity, and could you give us kind of a rough?
Calendar schedule on that when you expect roughly to go and get back so we can
Plan our committee because we'll we would like to have you
Come back in much more detail on this timeline of cash flow and I think that meeting might be very pertinent to this that discussion
Mr. Chairman so the
Our timeline is near the end of February, February. There is an annual conference
around federal funding and with the other states as well. So
roughly the End of Feb is is our timeline for that?
Do I think that'll work for the committee. We're expecting
Spring revenue update around the 13th of March. I thank if I remember right somewhere in there
Middle of march and we won't really know where we are budget wise until then
I'm going to take a look at those final numbers.
So that will, I think, work for the committee
and give OMB and the department and ledge finance
a little time to work on the cash flow discussion
and how we're gonna lay that out.
We have other questions on slide number eight.
Senator Cropp.
Thank you, Mr. Chair.
I just got to, not particularly number 8, but what?
Does it says you know funding for the operation of this marine highway? What exactly does that entail?
What are we using that money for?
Yeah
For the record Ryan Anderson through the chair senator crock yet the one thing that was unique about these
Rural ferry program discretionary grants was that our operating costs are eligible and so that's something that you now we've
We leveraged and took advantage of a lot of grants, you know,
it's typically just capital where you can go build projects,
you don't like the Testimina or these upgrades to our vessels.
In this particular case, it can actually pay for the operations
of the vessels, the crews,
the fuel, those typical operating costs that we have on the system.
All of them.
Thank you, Mr. So, once all of this grant money is gone.
Will we continue to receive operating funds from the federal or are we going to have to figure out way how to fund that as a state?
Yeah, through the chair, Senator Cronk. Yeah this year the surface transportation
reauthorization is up for
Renewal and so this we understand is part of that discussion is will the rural ferry program?
Continue over the the next subsequent four years
And so that'll be a big part of what, you know,
when we're speaking to our counterparts
with the other states about the RIAF.
And we have been approached like states like Hawaii,
and I've been in contact with my counterparts
in those types of states that have fairies.
And folks are very interested.
Other states are of very interest in this program as well
because they have a lot of similar challenges as we do.
And, so, I think nationwide, there's support
for a program such as this.
the questions that are, you know, how could the rules be rewritten and then how competitive
can Alaska be?
That'll be the challenge.
So, we're working through all that, but that's, yeah, there's definitely on the list from
states.
Follow-up.
Yes.
Great.
Thank you, Mr. Chair.
So there is a possibility when this money is gone that we will have to figure out a way
to pay for operating costs as a state if the feds decide that it's not to continue these
You know, through the chair, Senator Cronk, yeah, I wouldn't want to even try to predict
what comes out of Washington, D.C. these days, so that is a bit possible.
I'll make a prediction, senator Cronke, that it's going to be very difficult for rural
Alaska to get the votes to backfill 80 to 100 million dollars in a tight budget year.
It creates significant transportation risk for coastal Alaska.
So that in lies the concern, the other concern from the coast is there was a desire that
substantially more of these funds go into capital to replace the old vessels, get our
operating costs down, to facilitate the ability to get operating money in the budget process
to run the Marine Highway.
Now, it looks like we're getting one ship, but we need more than one chip.
You know the bid comes in and as targeted at 300 some million or whatever 340 whatever they're looking at
But these ships are old and they need to be replaced
so there's
That's part of the earlier questioning we had or discussion of a concern on the cash flow
It's exactly what you've what? You've brought up
So senator or a
The commissioner, you have that.
Yeah, Chair Esteban, just one more thing.
I think what you said about newer ships and our operating costs is right on.
But also this idea of building longer roads and shorter ferry runs.
I that is something where, and it's been talked about for a long time,
to get to that point where you can reduce costs of the system as important as well.
So I just, there's, yeah, I mean,
there are a lot of factors that we want to think about.
Yeah, we'll take up the road discussion another day,
but it's very, very difficult to build roads.
So we have any more questions on slide eight
before he gets to the slide.
He's been looking for since 9 a.m.
I see no questions.
Mr. Commissioner, next slide, please.
This is my favorite slide.
Jared's done with that.
Yeah, no, thank you.
We appreciate the opportunity, and we'll be back, absolutely,
with more details.
And I just want to, in this, we take this very seriously.
I mean, you know, were the Department of Transportation
and public facilities,
we absolutely want a functioning transportation system.
And we recognize the value and the importance
of the Alaska Marine Highway System.
I'm for Southeast Alaska and Southwest Alaska, so we definitely want to you know
We'll be working this and this is on the top of our of
our mini lists
and the military for
Change stations and Fairbanks area they get a lot of throughput up the marine highway
facilitating the Military Base
So there is you kind of a broad
Effect, it's not just you. No the coastal communities
Any final questions before we have the department back here in several weeks to go into
More detail in the cash flow
Okay, thank you, and I'll go ahead and maybe pass the
Conversations this morning on to the OMB director when you have time the interest I think if we get the
Legislature and and administration together we can get a pretty clear layout of what we're dealing with so we could help
Facilitate any adverse impacts that
may be delivered to us out of Washington and or try to help what little we can from the legislative
side probably that money loose out Washington I recognize that's the area of the administration
not the legislature but we will do whatever the Administration want you know ask us to do to
help and facilitate that. Any other questions comments before we conclude today's meeting
We're going to be back here tomorrow morning, 9 AM.
We've got three pieces of legislation on the table.
Senate bill 34, repeal the 90 day session limit.
Senate Bill 20, CPR curriculum.
And Senate, bill 104 vehicles, boats, transfer on death title.
And that is not the melaspina that passed away.
That's who this will be, people.
I thought I'd lighten it up a little bit here in Malaspina, I think, has seen better
days.
Okay, we are adjourned.