I call this meeting of the House Finance Department of Transportation and
Public Facilities Subcommittee to order at 1233 on Tuesday, February 10th.
2026, I'd like to remind everyone to silence their cell phones present today.
Our representatives, Carrick, Representative Eisheid,
Representative Mina, representative McCabe,
Representative G Nelson, representatives St.
Today, the Department of Transportation Commissioner Ryan Anderson and Program Management Administration Director Dom Pagnone will give us an overview of the department's FY27 budget request.
For those watching remotely,
the PowerPoint presentation can be found under today's meeting documents on basis,
which is the legislature's online headquarters at www.aklg.gov.
Commissioner and Director Pignon, please come forward, introduce yourselves and begin your presentation.
And materials from members should be under meeting tab two.
Okay, apparently you don't all have the tabs.
So are they stacked behind meeting one or are
Okay, commissioner, okay, thank you chair hannon, and thank You committee a sub committee
Yeah, happy to be here today to discuss our our
Budget for the Department of Transportation and public facilities for their record
My name is Ryan Anderson, I'm the commissioner the Alaska Department transportation and Public Facilities
This is a continuation I believe of last week's work
Our understanding for this hearing was that the focus was on the Department of
Reorganization as well as the AMHS budget and so those are the slides that we
have here to present today. Of course we're always happy to discuss you know
what the committee wishes. So with that though we could run through these
slides and start there if that's okay Chair. Yes.
Okay, this first slide really just outlines our department organizational changes and
really the fact that our statutory mandate hasn't changed at the Alaska Department of
Transportation and public facilities.
You know, really our purpose on the transportation side is outlined in AS-1905-125 and that's
really where we're focused when we are looking at our organization and the service to Alaskans.
This is really what we hone in on.
The one thing that has changed for us is our operating environment and that continues
to change.
It's been changing for several, you know, for the past, well, since I've been in this role,
it continues to changed.
I think transportation is a world of, ya know constant change, whether you're talking
The public has access to information and how we communicate anymore, how
we can communicate internally, and just that overall expectation of stronger coordination
throughout the state with our department is the communications and whatnot are pretty
quick and fast these days.
We also are definitely having a more disciplined use of our limited financial and workforce resources
I think that's something that we'll talk more about today as we go through our presentation
But the expectation is we continue to deliver frontline services continue
To do their jobs and so we're working through that
Continue
Okay, this next slide slide three is really
What our proposal is, and what you'll see on this slide is on the left, a lot of this work has already been done.
We've been working through structural changes in our organization for the past four years.
On the Left, you will see the strategic assets, that's our Alaska International Airport system,
our last marine highway system our statewide equipment fleet, division of facilities, measurement standards and commercial vehicle compliance.
components of the Alaska DOT and PF that really have their own missions,
but they also are all transportation, so they overlap a bit.
But we really treat them as their individual budgetary components
as they're own individual.
They really really had their
own.
different ways they do things. And so that piece has worked well for us. I mean, each
one of those has leadership. Um, and then, you know, we work together to bring all these
things together in the transportation world.
On the right side you'll see cross-functional teams and this is really where we've done a lot of work over the past years
You know building program management administration, so we have one
Financial area and that's what director Dom Penone leads that tackles all of our finances whether it's operating budget capital
Really to bring that all together and we also have our data modernization innovation a team that we built
A couple years ago we started that into that world recognizing that technology is changing
fast and we needed to make some changes.
The highway safety office is one that you'll see some change right now where we're strengthening
that office.
We're moving positions into the office through position management and really doing our best
to making sure that recognizing highway's safety is absolutely a priority and that we
need to be sure we've got the resources there to address what's happening.
The Alaska trails and local access systems. That's a new team that we've built. It's it's based on when the governor
submitted the new administrative order,
the recreational trails program from DNR to DOT.
And what that allowed us to do was take all of our
rural trail programs and ice roads.
So we have the ice road's program.
We have frontier roads, we had snow trails,
all these things so we can have one team
that's really looking across the state
and making the most of all
of those opportunities throughout the states.
So that something where we built a new team,
we're strengthening that.
because the demand from across Alaska has been,
man, we need to build this out and do a good job.
And that's really Alaska's other highway system
that isn't pavement or gravel.
Communications team has something we've
building over time and really strengthening that.
And I think you see that with our increase involvement
on social media.
We have great engagement on Social Media.
We've reports on that, and we also, the 5-1-one system,
we really been building that up for communications
And then procurement, of course, that's another team,
and that is what we do at DOT.
We do a lot of procurement.
And that a piece that we have to keep strong,
and then civil rights as well, is right there as a team
that works across the organization
to make sure that were doing things right,
and in compliance with all the laws and the regulations.
So really what the primary focus for what we're proposing now is, you know, DOT in the past
for the capital programs and the maintenance and operations has been set up with three
geographic regions.
And what were proposing is not to take away the geographic region.
Those still exist.
We still have the E5s, the engineer 5s range 27s that are still executing and operating
directors that are functional directors.
So we have directors of infrastructure development,
so they're overseeing the capital program across the board,
and then we a director of maintenance and operations
to really look across a state at how we're doing
on the maintenance, and operation side.
And so that's really the big change
that folks are talking about is really that change
from the regional director and the geographic regions
to this adding the infrastructure, development director,
and maintenance operations director.
Okay, two things, Representative Stutz has joined us at 1240.
Commissioner, how does this affect, let's just, as an example, the rule airports program?
Cuz they're not part of the international system management.
So, does anything change in how we deal with our rule reports?
Are they going to be managed by regional decision making?
Yeah, Chair Hannon, that's a great question. So right now the way our rural airports are managed is on the operations side
We have the regional directors would be overseeing the maintenance and operations
It's typically at our part 139's. We had DOT staff that are out there and those are the ones where Alaska Airlines lands
To care for those facilities and we have we we had teams out
There on their rural reports where we get out beyond those hubs then it's contracts and so we
rural airport contracts where we have locals that are taking care of those those runways.
We've actually had a lot of discussions on the maintenance and operations side about
how those operations and how they're managed differently across the regions. What you might
see down in the Bethel region is different than what you may see up in northern region in terms of
are funded in terms of what the expectations are for maintenance. You'll go down to some airports
and you'll see the difference in levels of clearing, vegetation clearing and those types of things.
In this role, maintaining that type of standard across the entire system, so if you're a pilot
You could expect the same level of maintenance at both airports because we have, you know, that type of management overseen across the boundaries.
Representative McCabe.
Thanks, Commissioner, and through the chair, good to see you again.
So, where does that put the airports and the contracting in your matrix there?
I assume maybe program management and administration, or is it still under maintenance and operation?
Yeah, through the chair, Representative McCabe, at this time, it would still be in maintenance
and operations because they're the ones that really have the expertise to make sure the
contractors are doing their jobs.
There is a component to this where we go out and do the capital projects on the airports,
and of course that piece would fall under the design and construction piece, would be
infrastructure development.
Thanks.
Go ahead and proceed.
This next slide just kind of goes into the deep dive about how the maintenance and operations
piece would work. And really what's changing is we have a single statewide maintenance
and operation director. For maintenance in operations, one thing that I'm not sure everyone's aware
And so while there are regions, there
are also districts.
And what you can see on this map are all the various districts
in the state.
I believe there's 13.
So each district has a superintendent.
And that individual oversees the operations
and the execution of the mission of that district.
Alaska is unique just because some of these districts
are as big as other states.
And we cover a vast geography.
the regional constructs with northern, central, and south coast, but overseeing the superintendents,
or right now it's a combination. As you look through the regions, it is not consistent.
In some regions we have engineer force, in some region we do deputy directors.
So the idea is to make it consistent across the region for the superintendent's supervision,
Those positions would be the maintenance and operations director
What's not changing those geographic district boundaries? We're not we're, not change those
The still the district level and a local decision-making. We are not touching anything at the superintendent level
That's we want to keep those guys doing their good work and gals doing. They're good. Work
And then our frontline staff and in deployment models. Were not were not, changing. Those as well
Representing me
Thank you through the chair. I know there's a slide upcoming and just about the timeline
But I'm just curious when did this transition and reorganization process start for you all?
Yeah through, the Chair Representative Mina
I mean from the big picture, you know
It was four years ago when we started you now kind of moving things around like we showed on the previous slide for this specific part
For the maintenance and operations and the infrastructure development that really has just been you, know when when the budget was released
then we started having the engagement with our leadership at the maintenance and operations
and the capital program levels and so that, you know, we're working through these work
sessions right now with them to really, make sure that from the, in between the director
level and that superintendent level, for example, how that could work the best because we do feel,
you we recognize that our staff has great value, they have great input and we want to make
the feedback we've had from our not only our maintenance and operations staff, but also our
statewide equipment fleet, the folks that run all of our equipment programs, as well as our
MSCVC, that commercial vehicle compliance, and the operations on the highway. They're excited
about this because having that ability to work across those separate, some of those are strategic
I'll use commercial vehicle compliance as an example.
If you're going to run a haul from the Kenai Peninsula
up to the Prudhoe Bay, it sure is nice to have one person
to talk to, whether it's overweight restrictions
or whatnot, and have to go to multiple different regional
directors to try to get that information.
So there's been a lot of discussion about the benefits
and how to work through that.
Just a quick follow-up through the chair and when you say that you all started to talk about this with M&O when the budget
Was released are you talking specifically about the supply 27 budget?
Through the cherub is an immediate. Yes. Thank you
represent McCabe. Thanks commissioner. So do you and through to you?
Envision this is going to help you know, I know that yes you struggle sometimes on the outer edges of your
M&O districts like at the north end of the Matsu area up around
What is it Canyon Creek or somewhere up there?
When it get a when you get, a big snow
You struggle a bit getting the equipment all the way there and getting that completely done is this
Division if you will gonna help that and and oh by the, way, when's the big lake district?
for the chair of Senator McCabe, yeah, that's exactly it.
I mean, one thing I believe we need to do
is just kind of take that overall look
at our resource allocations across the state.
That's hard to do when you have three separate regions all competing.
But to have that look where the needs are, because the need's change.
I know, for example, the Matt Sue Burrow, that place is growing and needs change for us.
One example we found was, and this was brought up by Senator Rauscher at one of the hearings,
was he had experience driving through, let's say,
the park's highway and when he hit a certain mile post, which is the regional boundary,
the clearing limits change,
And that's just the standards have been different throughout the regions for a lot of good reasons some of its budgetary some
Of it's, just you know folks's thoughts on how things should be and so so really
Having that standard that everyone can expect across the state I think is important
We do have a maintenance and operations guidebook
It's been a while since we updated it so part of this process would be to get that squared away as well
Okay, and this is the slide on infrastructure development,
what's changing and what not.
Again, this would go to a single statewide infrastructure
development director.
Really, we'd have aligned pre-construction
and construction leadership.
So right now, if you're in the regions,
each region has two,
engineer five, range 27 positions.
One's called a pre construction engineer.
One is called the construction engineering.
They manage the programs.
And so this would really bring those together and then they would fall under the direction
of one infrastructure development director, so to get that consistency across the state.
You know, we've really been doing a lot and folks have been
doing just a phenomenal job on resource sharing. I mean,
we're already working across boundaries with staff. We have engineers in Juneau that are
working on projects and Fairbanks.
people in Fairbanks working on projects in the Matt Sioux.
I mean, part of this is just this natural evolution of
this what we've been doing more and more
and this takes us to that next level where we're just gonna
institutionalize that way of working that we want.
Another piece of that is on that same kind of standards level.
We've had a lot of feedback from groups like AGC,
ACEC on the design side.
that when they're working with our staff in different regions,
there's different expectations set.
And whether it's procurement and contracting,
how change orders are dealt with,
just numerous examples of those types of
You know differences that they're really hopeful that you know those can come together and and you we've been making efforts at that
You Know in the past few years, but it's tough when you have you
Know three different regional directors and then and it goes from there
So this this idea would be to kind of get all those things working together
Commissioner does this plan create
so the new statewide maintenance and operation director is that a new position
That now oversees because the regional boundaries stay the local delivery stays so you're going to have a
maintenance operation captain in each of these
Regions if not in the districts
Who who is that central figure and how was that position created did they come out of maintenance and operation or?
Yeah, a chair Hannon. So yeah, we're doing this all through position management
Which is we're moving things around based on the resources that we have because we are trying to make up that shortfall from last year.
So, for the infrastructure development director and the maintenance and operations director,
those positions are from the regional director or the PX range 27 positions.
So what we've done is, weve taken the three regional directors positions and now were making two infrastructure developments.
Well, two directors, one of infrastructure development and one
of maintenance and operations.
So just to, so somebody's region is losing one
of their managers, then as a result of two of them now overseeing everybody.
Is that correct?
Yeah, Chair Hannon, that is correct.
Okay.
Thank you, Madam Chair.
the people that are taking these positions, I would presume are experienced in the position
that they're being put into.
Is that correct?
Yeah, through the chairperson of students.
Yeah.
I love that question because when, so from my personal experience, right,
I was in DOT for about 20, 20 a couple of years, you know, and then I got
asked to be in a director position, a regional director
position. My background was capital. I had to learn
operations, you know, very quickly to catch up and to get
up to speed, because all of a sudden I was put in the
position where I were overseeing, man, it's like 3,
400 operational folks, right, for the region as big as the
state of Texas. So in this model,
Yeah, we get to hire folks that are experienced in maintenance and operations or experienced
in infrastructure development, and I actually think we'll have a much easier time finding
folks who have that specific expertise versus we were challenged to finding regional directors
that had experience in both.
Thank you.
Go ahead and proceed.
So this is a slide I believe we showed this last week in our in
our budget overview presentation and this kind of provides some
pretext to the changes that you're seeing in
our fiscal year 2027 budget. Last year is the budget worked
through the legislative process. The outcome was a five million
dollar over five-million dollar reduction to maintenance and
operations and that's impacted our current year
led us to do a number of things like position management and holding leadership positions open.
And moving positions around so that we can shift costs and
preserve our maintenance and operations functions.
So that, we could mitigate the impact to the public and provide the highest level of service possible given the $5 million reduction.
I'm going to ask a question, which is, is this FY26, 12.2% reduction carried over and
included in the FY27 request, so it's 12,2 percent lower?
Madam Chair, excellent question.
So the 12 point 2 percent reduction in UGF, what we did through managing costs,
looking at our programs, we made the reductions.
through a number of budget action items in the budget.
And we made a subsequent request to add the funding back
so that we provided ways to backfill that funding
for the state.
So our 27 request does request restoration of those funds.
Representative Mina.
Thank you, through the chair.
So, this fiscal context slide talks about the FY26 reduction as being part of the justification
for the reorg.
But you mentioned earlier that the planning for reorks started four years ago.
So could you help clarify just the background between when the conversations around the
re-org started and then how this FY 26 reduction comes into play?
Yeah, for the record Ryan Anderson through the chair representative Mina. Yeah that the the piece with the four years ago
I mean that was really that
Organizational look where if you looked at our org chart
Four years to go and kind of the moves we made for strategic assets and then the cross-functional teams
That's you know that's been happening over the past four. Years
this specific piece for
The maintenance and operations and the infrastructure development really has been just this past year
So what we had to do this past year when we realized we recognized the
2026 of the 12.2% reduction. You know, we started doing things through
position management, holding positions vacant. We started looking at
recognizing the fiscal climate, you know. Isn't forecast to improve
that we needed to come up with ways that
we could realign and do things that could carry forward into the future.
And so what you see from us is really that is our proposal here is something that we can reduce our costs through these changes, and that can carry forward in the future.
What we recognized for next year, our cost, inflation and things, they continue to add pressure, we talk about commodities, guardrail, whatever it is,
continues to have pressure on our maintenance and operations budgets.
So we're looking for ways to reduce that pressure in future as well.
And just a quick follow-up through the chair.
As you're reorganizing some of these different positions,
I understand that the frontline positions
are primarily staying the same.
They're just shifting into different spots in the department.
Are you adding more work to these new leadership positions
or individuals who are in management
that are moving around?
Yeah, through chair President Amina.
Yeah.
Great question.
So, the reason we're making these changes is so we don't have to cut our frontline positions.
So you know, we aren't making any changes to our snow plowing, our pothole, filling those folks that are out there doing that job.
This really is, yeah, that management piece.
and the primary change that you'll see in duties is really at that range 27 level.
And it's not even a change in duty. It's just the way we're going to delegate and manage.
So, you know, we are comfortable that this is doable if that's the question and
the resourcing that we can make this work. Thank you.
So if the reorganization is inspired by budget cuts of 12.2% last year,
is asking for that 12.2% to be restored, would that unwind the reorganization or this is a permanent
move whether you get additional money restored to your budget or not?
Yeah, Chair Hannon. So when we looked at this next year and we asked for the restoration,
we also had a list of M&O needs that were above that amount. And that's
And that was the offset that we're proposing for this proposal.
So we've been doing a lot on our M&O budgets just to make things work.
We continue to see that pressure of cost increases.
And so what you're seeing from us is the ability to maintain the budget
but not going over that, and that took this proposal
to make sure we could offset the other M&O needs,
whether it was things like the Guard Rover pail,
or there's the whole list that's in the budget.
We'll be getting to those.
Okay.
All right, go ahead and proceed.
For the record down, Pannon.
So.
Moving to the next slide, again, that certainty of their reduction, providing clarity for
the department to be able to review our programs and priorities.
We looked at our staffing changes, and one of the things we do like to share is that the impacts in supervisory changes affects less than 1% of
the entire department.
We've got approximately 3400 positions and when we did the review of our
We did propose position deletions.
A lot of these deletians reflect the change in program that's already occurred.
Or positions that have been vacant for over a year.
So in the 27 budget, we do propose deleting 24 positions for that savings of $3.74 million.
Those positions are spread across partially exempt, which are politically appointed positions.
That's the bargaining unit, the largest in the state, and there are four supervisory positions.
At the time of the budget proposal, 10 of those 24 positions were filled.
And currently, six of these positions have either identified a job and
are in a process of transferring to a different position, or have already transferred to another position.
So Mr. Pignon, I want to drill down on the 24 positions that were deleted the 10 that we're filled at the time of the budget
I'd like to know
The breakdown of exempt partially exempt GGU and supervisory unit
Yes, madam chair I could I can walk through that so let's see here
Two of these positions
Two of the ten were partially exempt, two of ten filled positions were partial exempt
And I believe we have one supervisory position that was filled.
Thank you.
Go ahead and proceed.
Another action item you'll see in our fiscal year 2027 budget is a return of payroll services and accounting services.
within the Department of Administration and the accounting services were travel and payables also refer to as shared services within
DOA
This approach is going to mirror the process in which we brought back the AMHS payroll and is
going To align the the staff who are
Doing the final transactional work with the frontline business
staff
being supported by this work.
So this does provide efficiency and that we bring that expertise back to the department.
The department can prioritize issues when it comes to rectifying payroll.
Or ensuring that payroll is happening timely and then making sure that our travel reimbursements and
other payables are being paid timely as well.
How many positions were moved, you know,
and depending on the department six years ago, five years
ago versus, so this is how many you're getting back.
Is that the same number as an equilibrium or?
Yeah, Madam Chair, that's an excellent question.
So the positions we're moved over several phases,
but roughly started a decade ago.
And we are receiving our, the.
the approximate same number of positions back without a budget increase, because we continue to pay for them.
Right, you continue pay.
All right.
And we know, I mean, your department was one of the poster childs initially with the AMHS payroll problems that centralizing to big admin.
when you had variations in payroll, if all your employees
worked 37 and a half hours on the same schedule,
52 weeks of the year, payroll's pretty straightforward.
But yours was one of departments and AMHS stood out of,
we had nothing but nightmares.
You had anything but nightmares for employees
when that happened.
And I assume with the level of overtime, regional differences,
regional variabilities, that it's a department
had ongoing issues in both these payroll and accounting services.
So I think in the long run it's a good move, but I just want to make sure our
departments are receiving the resources to do it the way that they were able to
deliver it and that we are going to stop having constituent inquiries about why
is my paycheck wrong because that has been an escalating problem over the last
five years. So glad to hear that your most apartments aren't getting their
ration back. So it's good to hear that DOT believes you're getting the ration
back that moved over.
Yeah, we saw a lot of success in reductions in the notice of pay problems
and satisfaction from our AMHS staff once that transition was made.
So we do hope to continue that.
All right. Go on ahead.
This is just a quick slide about kind of our implementation timeline for our restructuring.
And as you can see right now, we're kind in what's called an early transition.
So, you know, were planning as vacancies occur and.
We're slowly going to begin moving positions into the new organizational structure.
Part of this is just having these teamwork sessions and really making sure that as we go through,
we're getting that good feedback from our staff on how we are moving forward,
and that these things identify any pitfalls or any conflicts that we may not have thought about.
The budget's approved is really we're working through those things and then once the budget is approved
Then we'll have formal alignment and the position transfers
We'll be standing up some statewide, you know
So support functions to line up with the infrastructure development and maintenance operations teams
And then yeah, then we just kind of move into this is the new way we do business and and go from there
Representative Mina
Thank you chair hand in through the chair. So just looking at this timeline
you know, we'll have a new administration next year, is this timeline fixed with a
new Administration if there's a different leadership in DOT, and if that does happen,
is there some sort of off-ramp to the reorganization process?
Yeah, through the chair, Representative Mina. Yeah. I mean absolutely. There could be new leadership right with new administrations
So that that could change things. That's always the way that
Something that can occur
There's no doubt about that and we believe that this has the benefits that you know people will see the
Benefits we believed that Alaskans will say the Benefits and service and that standard, you Know across the different parts of our state
That this this will hold on its own
That's the goal.
There's been organizational changes.
I was a part of past commissioners making changes,
there was the big regional boundary change years ago,
where South Coast got added to Southeast Alaska,
and those types of things happen.
I think...
when you're working in an area like transportation,
I mean as the world evolves, people will,
there'll be new ways of working, especially technology.
We are trying to position ourselves, you know,
we all know like artificial intelligence.
There's things coming at us that's not clear what happens,
but what we are tryin' to do is build
that kind of flexible and agile organization
so we can tackle those things as they come and they don't.
You know, we're not fighting those things.
We're taking advantage of where we can.
So that's really our philosophy on this.
Okay.
Thank you.
Go ahead.
Okay, yeah, Chair Hannon.
So this now we move into the rural ferry program.
And just some slides on that program and kind of some of the questions that have been surrounding it.
This is very similar to a presentation we provided to the Senate Finance Committee.
It was either last week or the week before.
So this first slide, switching gears, is really the authorization on the Rural Ferry Program,
the Infrastructure Investment Jobs Act.
This was back in 2021 when this was established.
And really, the section 71103.
allocated one billion over five years to the ferry services for rural communities
program
that's what we refer to as the rural ferry program
uh... and it provided two hundred million annually for competitive
grants
uhm meeting the criteria
uh it had some criteria for eligible service and this is where alaska
really
got some advantage, because it is a discretionary grant program, it's a competitive grant
program. But this criteria that served not less than two rural areas located more than
50 sailing miles apart made it pretty tough for other states to compete. It makes it
pretty rough for others states. Let's see, the program also received, oh,
the other important part is it received five years of advanced appropriations, so it fully funded.
bill as well. Representative Stutes. Thank you, Madam Chair, through the chair. If
Cascade Point were built, that would put Haynes less than 50 miles from Cascade
Point. How would that affect funding? Yeah,
through The Chair Representative Students hadn't considered that. That's
something we'll have to think about. This is just for that, for the Rural Fairy
funding, it wouldn't affect the ferryboat funds or some of those other funding programs.
So this is specific to the discretionary grant program, and as we go forward looking at options
with whether it's Cascade Point or the new MR, the mainline replacement vessel, that's
one that has been discussed quite a bit, yeah, something we'll have to consider.
Dump and own through the chair, Representative Stutes.
The criteria of the program was that the ferry systems serve two or more communities that were at least 50 sailing miles apart.
So we certainly have other reports of call that are over 50 miles, sailing mile apart, so we'd still qualify for the
program.
It's just that, the entity had to serve, two more rural communities, 50 Sailing Miles Apart.
Thank you. So in Southeast, it would be any two communities that that one vessel were serving.
Is that in order for that route, so to speak, to qualify for the, the idea of funding?
Through the chair, Representative Stutes,
the the ferry entity itself had to serve any.
any two rural communities separated.
So when we received that qualifies the entire system
to receive the funds.
I wasn't, the fund's aren't allocated to a specific route.
Thank you.
Well then let's jump ahead to do we have any news
on the front of the FY26 award that we are still waiting on?
Yeah, Chair Hannon for the record Ryan Anderson. I mean at this time
We are scheduling we've scheduled a trip to Washington DC to meet with the FTA administrator deputy administrator
To talk through this
Yeah. That's that's in two weeks
Apart from that, you know, we're just we are looking across the board at
Ways we can save money in the marine highway system to kind of extend that time period that we have right now
Before those funds become critical
And so, I think this was discussed last time, but for example, on the Matt and Nusca, looking at the operating cost is to keep that, you know, operating as a hotel ship is fairly expensive.
If we were able to dispose of that now, which actually makes a lot of sense because the Kennacott just came out of capital, and between the Kennecott and the Columbia, we have hotel-ing capabilities just by being a little more dynamic there.
So that's one thing that we're looking at
and we are going through a Director Tornga
is working through best interest finding right now
and how that could work.
But there's a process to that of course
where you got to do appraisals
and go through the Federal Highway Administration
in terms of the proceeds for that and whatnot.
So, that is not a quick solution
but it's something we work towards.
And then any other types of cost reductions
we can do right know?
Those those are helpful as well. So we'll be looking and just anything within our control is
What we're trying to really evaluate?
Right now we haven't you know, we we understand you now there's discussions about
Service levels and reducing service levels at this time. We're not
proposing any of that and we feel like
We're going to go to FTA and have a good discussion there and make sure they understand
the importance of the system for Alaska.
And we still have not released and are not intending to release in the summer schedule
for the marine highway system until May because we don't have the sailing prediction for
the full summer.
go ahead and issue the sailing schedule
and allow people to reserve.
And so we'll do that here, I think in the,
maybe even the end of this week.
So people have the schedule,
they can make the reservations.
And then, you know, as we work through,
we will just continue to be on top of
this to make sure as, we get closer,
you now, if we have to, make changes,
we won't.
Okay, representative Stutes.
Thank you, Madam Chair, through the chair.
What is the cost to have the Matnuska being used as a hotel annually?
Yeah, Through the Chair Representative Stuits,
what our preliminary work from AMHS,
it's in the range of $10 million a year.
Follow-up, yeah, thank you.
And let's see, we sold the Malaspina,
and we've sold it for, what, 128?
thousand is that what it was through the chair percent of students it
was between a hundred and two hundred thousand dollars yeah we don't get a lot
for these vessels so what is there a savings using the
malaspina for the for a hotel I mean what what are the tie-up fees yeah
through that chair of student's the way we were looking at it
So if we were to put everyone in hotels and catch a can,
they ran the numbers.
It was about $3 million annually just to
put people in Hotels.
And the challenge there is, of course, in
Catch a Can, there aren't hotels available in the summer.
So we run into a tough spot there.
The $10 million, that incorporates all the fees of when
we have a vessel in water, we
have to crew it.
you know and there's certain requirements that we have to make sure we meet and so
that adds I don't have the specific tie-up fees it is it
is tied up at south birth which is the DOT facility
um that's not a uh I guess now it's jagged that is not
a jag facility so you now but there are utility fees there
are all all those types of things that
we pay for sure
Sure, yeah, we we hope that you are hounding them on a daily basis in anticipation of the meetings and in two weeks
There's a brilliant breakthrough and we have an answer because otherwise
It looks like
We will be having less than a couple months of a sailing season
The dust spiral continues
So
Representative Moore.
Thank you, Chair Hannon.
Through the Chair, I'm just curious what happens
if those funds don't come through?
What's your guys' plan?
Do you have one?
Have you thought down the road on that yet?
Yeah, through the chair, Representative More.
From our perspective, so depending on the funding
that's available and how far we can stretch
the current funds out by taking some proactive measures now,
we'll be looking at other potential sources of revenue.
Those are tricky and so we're talking through every possibility that's out there.
We will have service reduction scenarios prepared and as we get closer, if we need to talk about
those, we'll bring those forward as well.
We have every intention of keeping the system running and that is our mission and our job,
so yeah, were going to keep it at that for now.
Representative Moore, go ahead.
Oh, thank you.
I appreciate the answer.
Let's do it.
Thank you, Madam Chair.
Through the chair, I guess I'm a little bit confused.
And it's costing about $10 million a year
to keep the Metanous Catide up as a hotel.
And then you are, and it would be about 3 million dollars
And yet you're thinking about maybe selling the Matinusca
to fill some of the hole.
Well, you are still gonna have to house those people.
So I'm thinking, what are you waiting for?
Yeah, through the chair, representative Stutes.
Yeah sorry if I wasn't more clear earlier.
So with the other two vessels,
the mainline vessels the Columbia and the Ketchik,
and kind of caught.
We've been having to go through a series with those
of kind of moving them in and out of overhauls,
and then the Kennecot just had a big capital program
where we did the big engine overhaul
and the repowering and everything.
Now that that's complete,
we aren't running those two vessels simultaneously.
We really can't.
So between those to vessels now,
one will always be available as a hotel ship.
So because the kind of caught just recently came out of that Capitol overhaul that opens up that opportunity
We're now we can hotel either in the can I caught at the Columbia depending on which ones which one's running and which
One's tied up and then the Matt Nusca the need for the mat NUSCA goes away
Follow up is an astute so I guess my question is what are you waiting for?
Through the chair representative students. Yeah, so we have to do a public interest finding if you go appraisal on the Mat Niusca
then we'll have to do an RFI, a solicitation.
So we've got to follow the laws and regulations,
but we're actively heading down that path.
Last, thank you.
So you're in the process now of requesting an appraisal.
Is that what I'm hearing?
Yeah, through the chair representative students. Yeah last director Tom Tornga was working on the best in
The best interest finding so that we can have all that good information documented available to the public then we'll start the appraisal process
Thank you
Okay continue
For the record don't put on and madam chair the these next three slides go over our success with the rural ferry program we
Walk through them if the community would like I
Don't I mean I think we all know we were successful. We depended on those funds
We hope that we have another page to add
That we are successful in getting 78 million in the next round
The money is there in federal budget
we anticipate it and
Things don't look good if we don t but
Does anybody want to go through any of those?
Do you tell, I mean, yeah, it's been keeping the boats,
the vessels afloat and the system going forward.
So it has become pretty vital to us.
So yeah moving to slide 14.
That does summarize the amount of success we've had with the program.
We've three years of operating funds.
This last year was the first in sequence where there was no notice of funding opportunity.
And again, those capital funds have funded numerous port and
terminal projects as well as been a major funder of the Tustaminar replacement vessel,
which we did put out to bid just this year.
Moving to slide 15, this again articulates the magnitude of the federal appropriation in our current calendar year 2026 budget.
And again, we'll be headed to Washington, DC and continue to evaluate what measures are within our control and
what we're able to do to close that $78 million federal revenue gap.
I have a question.
Go ahead, Representative Stuis.
Thank you.
Thank You, Madam Chair.
Probably a Mr. Panom, are state dollars basically used for match?
Through the Chair of Representative Stutz, yes, when for the operating grant, the UGF in our budget does count as the match, correct?
Other than matching, other than match funds.
Through the Chair Representative Stutes, the Marine Highway Revenue Funds are state designated general funds and
only a portion of the UGF counts as the match.
But there is a significant amount of unrestricted general fund in the operating budget for the marine highway system.
Thank you.
So this slide here outlines the historical timeline
of this grant.
Again, I think we've stressed the importance
for the ferry system going from 199 days to 152 days.
We will likely advocate for an expedited grant process
if we're successful in doing that.
Again this 25 was the first year where we didn't have it.
and move to the next slide.
That's our final slide for the committee today.
Okay.
I don't see anybody's hands racing up.
So I think that's concluding our presentation
and questions for today,
I'd like to thank you Commissioner Anderson
and Mr. Prignon for your time today
and your timing and preparation.
Our next.
subcommittee meeting is next Tuesday, February 17th at 1230 here in room 124.
And with that, we are adjourned at 124