Well, good afternoon, everyone. Hope you can hear me. I'm on my laptop in a hotel room in Kodiak, not optimal, but should be okay. We can hear you great. The sound is good. Okay, thank you. And I was looking, I'm not sure if I saw Wanetta on board and Cynthia. Oh no, maybe we've got more participants on here. Okay.
Well I think we will go ahead and call to order the March 25th AMHOB meeting. And I would ask Katherine to please do the roll call. I can do roll call. This is Tera. Alan Austerman, Cynthia Burns, Captain Keith Hillard, Norm Carson, Paul Johnsen, Deputy Commissioner Rob Carpenter, Shirley Marquardt, Wanetta Ayers. Excellent. We have a full board. We'll go ahead and go right to the reviewing of the agenda and approval of the minutes. I'm unaware of anything that needs to be added or removed from the agenda. So hearing that let's just go ahead and take the agenda first without any objection. We would approve the agenda.
No objection. The agenda is approved and the minutes of our March 11th meeting, hopefully had a chance to go over those and look at those. Are there any needs for clarifications or corrections to the minutes? Move approval second. All right. Without objection, we will approve the minutes. Opening remarks. Don't want to go around the room if everyone can remember again, to please use that little hand down at the bottom of the screen and, and I'll call on you in the order that I see your hand come up and we can just go around the room if let's see if we want to start, I'll just go to the top, the list, Mr. Osman, do you have any opening remarks?
Madam chair, nothing really. You know, it's busy times here at DOT and the Marine highway system, as you guys are aware, active in the legislature, I'm sure you guys have been following along a lot of public testimony. A lot of things happening and so happy we're all meeting again and look forward to the meeting. Thanks.
Thanks Shirley. Yes. I'll just add my thanks to staff for the wealth of information that's been provided during the interim between the last meeting. And I will say that I did have a follow-up question and I haven't seen a response to it yet with regard to the public process around the design of the Tustamena replacement vessel, what kind of public outreach or commentary has occurred to date on that? If any. So I'll be looking for that answer during this meeting.
Okay, well, we'll just wait for that. Just very briefly. We've got a lot of information that was sent out to us. I hope everybody really had a chance to really dig into it and read it. And I would also recommend that if you haven't done so recently we'll go back and I would read some of the other reports. I would read the reshaping work group findings recommendations, and some things have just changed because of COVID and all the funding we find ourselves with since then. But I think it's very, very helpful to go back and look at what Southeast conference has done with more than economics has done what the reshaping committee did so that we're, we're really looking forward to, to allow a long-term plan and not trying to go over everything, everything again. So if you haven't really dug into those, those reports, I would strongly encourage you to do so kind of on a regular basis. So we will move right to the public comments and see if there's anyone online who would like to make a comment.
Wonderful, good afternoon, everybody. It's going to pause for a moment here while we pull up the phone line and I wanted to mention that to the public that have been providing comments to the members. So we have incorporated them as well into the, the meeting minutes. And so if you're interested in seeing those, you can look up the meeting minutes from the last meeting, which was March 11th and see where the comments were that were being made. And if you are interested in providing comment at this time, the phone number and the meeting code is listed here and to request to seek, you want to press star three, we have a number of people on the line. So bear with me. We'll open the meeting up in just a minute.
This is Robert Venables Executive Director for Southeast Conference and thank you all for what you're doing every other week. And in between to address these issues, look forward to assisting in any way we can. I have a couple of things I would like to comment on in a statement, be very brief, but as you take a look at this deliberative paper, there are a lot of assumptions there that I've got concerns with. And I just hope that you challenge each one as you go through. You know, the folks in South-Southeast have largely, well, as far as I know, a 100% supported the TRV moving forward quickly over the last many, many years, but never really gave a thought that this was going to be the blueprint for replacing the Columbia, the Matanuska and the Kennecott as the document suggests. We need to make sure that we do have some public engagement over here before that is an assumption that's adopted because that's likely to be what we're going to be stuck with for the next 50 to 80 years based on the lifespan of these vessels. So when it comes to direct public engagement in designs for the mainliners in this region, we certainly want to assist in that effort as well, and would also hope that the board would consider making a statement to the legislature in support of funding the Marine Highway System, as usual with general fund dollars, so that if they are displaced by federal funds that come in later in the year, that these can be swept into an account, that it would not be swept to the back to the general fund and be used for a match for new hulls in the water. And just my short brief statement, I titled it “if I had $1 billion dollars” If I had a billion dollars, I'd, re-imagine what docks would look like in Western Alaska and get input from my public and private partners. If I had a billion dollars, I'd ignore the vessels we currently have in the fleet and design boats that might better meet the village’s needs. If I had a billion dollars, I'd build an Alaska class ferry with crew quarters on them. Instead of taking the tax lien out of service and remodeling her. If I had a billion dollars, I'd build another mainliner. We could wait another five years and ask these same questions and have no money. Or my hope is you will recommend to not spend much of the federal dollars coming in on operations and get new hulls in the water because you do have $1 billion to make recommendations on. And I am very supportive of what you're doing and how you're doing it. And anything that we can do to be of assistance that's from Southeast Conference, we certainly want to do that, but thank you for a moment to make a public comment.
This is Nick Corpela from Hyder, Alaska. And I would like to bring up the, the fact that Hyder is very interested in being the Southern Terminus, either with prince Rupert or in lieu of prince Rupert. If we're in Alaska port, we're a community that's connected to the road system via Canada, and we're very well situated to, to provide that Terminus. The Alaska Marine highway used to come here in 1999. The dock got dilapidated and was taken out of it. The port was taken out of commission, I guess. And since then we have gotten a new steel, concrete trestle we've expanded Harbor island. We have hotels, campgrounds. We're a community that would really love to be connected to the rest of Southeast Alaska. In the recent years with the Porter restrictions we've been, it's been very difficult to get things that we need through Canada. We're cut it cut off from medical travel, simple things like we can't get driver's licenses can't we don't get to the DMV right now. We're like 14 hour drive to Skyway. If you can get there and the DMV's open, there's just, and using this public money and infrastructure back into Alaska to stimulate our economy would be just a really great thing. That's sorry, a little, not very organized right now, but I'd like to keep plugging this and myself, my neighbors, and everybody's filled out the survey and there's, I think there's just a lot of real big support to try and get Hyder as a Terminus. Currently army Corps of engineers and state of Alaska are working on transferring our inner Harbor and moving it to deeper water. The funding is in place for doing all the planning. So I think right now it'd be a great time to take initiative on getting AMHS involved as well. Thank you.
On the modernization of the fleet; we're on the end of the line here in icy straits on the icy straight corridor. And the LeConte is like at the near end of midlife and going into late life. And it's a good time to start planning for a new vessel replacement and a vessel similar to the LeConte or possibly, you know, slightly smaller, but not by much because you know, it has to come across, across the sound from Icy straights into Lizziasci. And, and we get some, some weather where it'd be good to have a bigger vessel. We do appreciate the Catamaran. I itinerant service that has been implemented recently, but we do need a roll-on-roll-off vessel. And as I, I talked with you at the first meeting and said that our, our port, or, you know, our mooring area is we can only handle the LeConte, we can't handle side ship. Also where, when it returns back to Juneau, because Juneau's our hub community and it's a hub community for, you know, the, all the icy straight communities and North Chatham and Cedric Sound villages. So, it's, and we're, you know, mostly low to moderate-income communities year-round. And so, keeping the terminal at the Auke Bay location is pretty essential for us. I mean, if you move it, you know, out Cascade Point or whatever, I mean, that's, it's pretty expensive to take a cab from one location to another in Juneau. So, keep that in mind. Also, if you're considering fareboxes for, you know, for service to my community, it's, it's really, we, we can't compete. But what I can tell you is that the ferry service is such an economic boost to the economy. So we have a fish processor here, your Kobe Fisheries, and every pound of fish that they just about every pound of fish that they process rolls up rolls onto the LeConte goes into Juneau and the State of Alaska gets raw fish tax. And, the community gets half of that rockfish tax back and the state gets the other half. The revenues to the city, aren’t just in the farebox, it's in, it's in the increased economic activity, that's just one example. If the route to Pelican is being advertised, which our Pelican chamber of commerce likes to do, we bring in more passenger revenue seasonally during the summer months when people want to come out and see this beautiful wilderness area that we live in. And so previously we used to have the LeConte come in and overnight, and then something to do with, you know, crew. And, and then they would go back to Juneau. And I would like to, you know, state that we have hydropower. And so if we set up some sort of electrical hookup for the LeConte, they can possibly tap into our hydro if they have to overnight out here. I just want to, you know, reiterate it's, it's just such an essential part of our economy. So, thank you, Madam Chair.
This is Joyce Frank. I'm calling here from Angoon, Alaska. I am calling in concerned of Angoon’s future, and that we are in very much need of a ferry and have no barge landing. We have no airport. And our destination is through Juneau like Hanes. It's a much needed ferry to Haines because people's destination to go up North is that way and Angoon’s destination is Juneau. Look at the schedule. We have to wait. The last ferry for Angoon is going to be the 30th of this month and we're going to have to wait 16 days and that does not help our situation. You know, we have needs too. We have, Juneau was just our destination to get our groceries were a small village anyways, and we need a better location for the fairs terminal because only small ferry can land here. And also our ramp, the ferry ramp was made for the Fairweather, Fairweather was sold, which we hardly had got, and we just need a better location. And our ferry ramp really needs meets work. And I'm just speaking for our needs, we have needs too. And we have things that we need to do places we need to go. The only option is we have a small plane and that costs way too much just for one person. We have medical, we have elderly's here. We have school, then other intensities that need the ferry to load their stuff on and people have appointments. Angoon has to wait 10-16 days just to get any assistance. I don't understand Who I could talk to. I have a lot of concerns for our village or community, Who does the scheduling? I have gotten to the meetings in the past and I did email. I really need someone higher up to talk to and not to be able to and be cut off and just go by through email when whoever's at the other end. Because that's hurtful. And this is our community. And we have talked in circles and circles and it's like never heard. And when you're in the meeting and you keep going and going, you get less people, fewer people because they're not being heard, but I'm going to do my best and try to keep talking for our people. I don't know who makes the ferry schedule or talked about this for so long. So many years that we are not being heard. All these other communities’ needs are met. The ferry is our highway. We need to be heard, really need to. At one time, we got on the ferry In Juneau to come back to Angoon. A ferry just went to Hoonah. It's hard to keep repeating and repeating and repeating and not being heard. I'm thankful for the ferry, but it was meant for communities to make use of it. And you have us in the middle who hardly get any ferry service. Please call me. Phone 907-723-6472.
Thank you. And I'm sorry, your name again. Okay. Thank you. Joyce and Pam, please stay on for the rest of the meeting as we go through the modernization plan as well. I think it'll be helpful. Thank you. Great. So if there's anyone else, oh, we have a couple more minutes left for public comment. I don't see any hands raised. If you are interested in providing a comment hit star and the number three,
I think that concludes our public comment period. Thank you to everybody for calling in. We really appreciate your time and joining us. Hey, thank you. So moving along on the agenda, I will just turn it back over to Katherine for AMHS updates as we move down the list. Thank you.
So the bipartisan infrastructure law, or IIJA, has directed the USDOT to carry out a pilot program to provide grants for the purchase of electric and low emitting ferries for the electrification of existing ferries to reduce emissions. So AMHS is well positioned to sponsor the evaluation of alternative fuel though, a mission and propulsion systems on specified routes in coastal Alaska. The research for this is focused on alternative fuel ferries, which can advance the current industry state of low emission technology towards increasing the range and capacity of zero emission power source ferries. So this MOA comprises of four tasks. The first one is a conceptual vessel, a concept design and operational analysis. The second task is shore-side infrastructure analysis. The third is financial and economic analysis, and the fourth is general project administration. So we're very excited to be partnering with Mr.
Venables and Southeast conference is an excellent team. They're excited to take this on and work with AMHS and communities in the AMHS service area towards understanding the objectives of this funding and putting forward proposals that are really work well for our region. The next steps on this is that Southeast conferences seeking proposals from qualified research and consulting firms with experience in review and design of low emission electric ferries to support their efforts in this partnership. And then secondly, beyond that on the federal highways research funding that we are requesting for this. So we look forward to having some good data come from this that we can use in analysis moving forward, when it comes to investing funds, I can pause for a moment there, but for going to the next bullet, if there's any questions,
Okay. So there's really great news on the Tustamena replacement vessel or TRV as most of you likely saw the TRV is now being advertised. DOT is soliciting a contractor to assist in the design development and perform subsequent construction of the testimony and replacement vessel. And this project is utilizing the construction manager, general contractor or CMGC procurement method. And we're going to be conducting a contractor outreach meeting on April 6th, 2022. And proposals are due May 26th of this year. So I've asked Jeff Jenkins, a procurement specialist in charge of the procurement to answer any questions you may have. So Jeff, if you don't mind introducing yourself and maybe commenting on what you expect from this process moving forward, and if there's any questions that's a great one to talk to
My name is Jeff Jenkins. I'm the chief of contracts for south coast region of DOT. And I'm also responsible for all construction and design related contracting for AMHS. And I'm happy to be here. I appreciate the board inviting me here today. As Katherine mentioned, we have put out the advertising documents for the CMGC on the Tustamena replacement vessel. And that basically means that we're seeking a contractor or ship building facilities that will get on board with us as we work with our designer of record to finalize the design components on the Tusamena vessel. So, I mean, we've been pretty transparent with the process so far, we're, we're gonna have about an eight week solicitation process. We're hoping to get proposals in just prior to the Memorial day weekend. We're excited about this. We've had some, we've had some shipyards already expressed some interest, so that's, that's exciting, you know, for us right now in today's economy, the, the shipbuilding industry is extremely busy.
So the fact that they're, that they're taking a look at this early on is, is really encouraging to us. And, and as Katherine mentioned, we're going to do a contractor outreach to kind of explain the process and maybe what, what some of the highlights are. We'd be looking for as a, as an owner in this, obviously it's a substantial expenditure to, for the state to do, and we want to, we want to do it right. We want it to be successful. And, and we're, we're, we're out the door and rolling at this point. So we're, we're excited. I think this is a great opportunity. It's a, it's an exciting, and it's a really dynamic contracting method. You know, it's not just low man wins and you get what you get. I mean, this is a, it's a collaborative effort with us in the ship builder and the designer and all three entities working together. So I think this is going to be a really great opportunity for, for the state as a whole. And I'm happy to answer any questions you might have,
Thank you. The only thing that I may want some answers on in references at the timeframes that it takes to do this kind of thing. I can remember the legislature back in 2014, when funds were provided to start this process, and we're looking at 2027 to see a ship. So it's a little frustrating from our side of the public side. The second thing is during your interviews with the contractor, I'm assuming that if the TRV, as the model for future vessels, that, that kind of thing it takes into consideration, like you said, you're not looking for a low price, you're looking for the best deal, right?
Correct. We're, we're, we're looking for really, really the benefits of CMGC come in where a ship builder or a contractor can. They're giving us constructability reviews where the, the hope is to really control costs and prevent any surprise moments during the design and the construction of the vessel. So if anything, this process should really facilitate timelines and provide us opportunities to accelerate. Now don't hold me to that because I can't guarantee it, but I think, I think we have great, great potential to see better ways to build a mousetrap on some of these, on some of these composites of vessels and extremely complex piece of equipment, right? I mean, there's a lot of, there's a lot of detail that goes into them. And so I think this is an opportunity to work, to partner with somebody who that's kind of the key term we like to use.
We're going to partner and try to try to really hone in on what makes sense and what does it now, I can't speak to if this is the model moving forward kind of thing, because I think I don't want to speak for the department, you know, inappropriately, but I think we have to look at each situation individually and do what's applicable. If it's a, if it's a vessel that doesn't need to be as, as large or as complex than I think we need to be able to adapt our, our needs accordingly and do it. But the premise is there. The certainly the, the, the, the mechanism for conducting a procurement or even the design steps are all there. But, but as far as the model for future vessels, I think that's kind of, has to be viewed on a case by case basis,
Any other questions from board members and not seeing any, but I do have a question for you, Jeff, with regard to the matrix, can you speak to the, the origin of that did seem like they, each item was originated by the same person, is that an AMHS engineer that's reviewing design plans and then glossing is responding to it. Is that the correct interpretation?
Yeah, maybe that's I was planning just to speak to that, if you don't mind, because regarding public process, you had asked an excellent question, vice chairman Wanetta Ayers, that the TRV design has gone under some extensive engagement, but that was back in 2014. So we are doing so again, this a very high priorities of the department that we get input on this and our new project manager, Greg Jennings just started last week and he's dedicated to the TRV. He has been working with their AMHS internal advisory committee on a weekly basis, pretty much over the past year, four weeks, going over components of the design. And so comments are being tracked in an item resolution matrix. And that's what was shared with the board as document 5.1 resolution matrix. And so what you're seeing there is comments, you know, who made them what the comment was about, and then how is being addressed.
So at least there's a response back. And the project manager is really keen to say, you know, we want to hear everything. We may not be able to make accommodations on every comment, but we are going to be responding to them and incorporating what we can to an improved design. So that's at least this internal process that we're starting. And now that this RFP is out, the team can focus its attention now more on the design itself and incorporating a larger array of a public comment into that, and so when the board requests it, we can certainly provide a presentation on the TRV design itself and the CMGC process. If you're interested in learning more about this, we do have materials that that could be readily shared.
I would just, I saw a couple of their heads nodding. I think that would be of interest for a future agenda. And I will just say that having reviewed the materials for this meeting, and again, taking notes as Jeff has said, whether or not the design will apply to future vessels, but that there is that broad intention. Now that the question of the versatility of the vessel design across the entire system comes to mind for me, that obviously a procurement of this type that happens over years and that there would be modifications and other things, but just knowing the history of vessel procurement and some of the pitfalls that we've we've had. I, I would rather take the time to ask and answer questions upfront and become wedded to a design that may have other considerations downline for other ports. And I would, I appreciate knowing about the 2014 outreach.
What I would say is obviously that's, you know, almost eight years ago, almost a decade ago, things change within the communities, although probably not drastically, but again, one of the areas where we have historically as a system not performed as highly as we probably have needed is coordination with the communities in terms of the capabilities of, you know, ports and docks. And so I'd really like to see that, that we make a targeted effort to do outreach to communities, Portland, Harbor directors, Harbor, masters, other individuals, with technical knowledge about what the capabilities of each port are and how they would be able to accommodate and or respond to a new vessel design. Okay. Go ahead, Katherine. Great.
Thank you. So I'm going to move on to the next item. So DOT will be seeking professional services to conduct a comprehensive review of AMHS operations. The scope of this operational evaluation will focus on vessel operation, fleet maintenance, financial systems, management structures, public communications, and our IT systems. The selected contractor will support AMHS management and Amhara with data analysis and establishing and maintaining a performance dashboard for example. This is very similar in scope to what Washington state very systems provides to their legislature on an annual basis. It's the cord's intent for this to be completed, perhaps biannually, but this could be discussed moving forward with the board or the contractor will prepare a comprehensive report, summarizing any findings, and then work with AMHOB on a regular basis to incorporate any suggestions and feedback into the work plan. So the tentative advertising date for this solicitation is April 13th. And if the members would like to add any additional scope to this evaluation, RFP, please let us know. It's a good chance to have some added resources here to what AMHS management is trying to do right now.
Thank you. I'm glad to hear that the board will be involved in this proposal. I think it's important that we get in well upfront and at the very beginning and that for sure, our chairman and vice chairman are in the communication loop on a regular basis. And I hope that this I'd like to see this proposal be more than just a data driven proposal. Would we, would we be putting any requirements on the contractor to have some experience in ferry operations of refs ferry, construction, that sort of thing, route design, that sort of stuff. Not just a, an accountant or a data retriever, those things concern me. If I was doing this, I'd be like Rob Venables. If I had the money at the time, I'd like to have this team actually go out and fail every route and be out on every board goal. So they actually see what happens there. Not just what's on a piece of paper back in some office. And thank you, Jeff, for your comments. I was happy to hear that we wouldn't be trying to make a one size fit all. Thank you.
Yes, I do. I just want make sure I clarify that I understand this, and this is a contractor that's going to put together a evaluation program or for the, for the state, for our highways, marine highways. Is that correct? Yes. And well, where does the funding come for? This there's something that's been in the budget for awhile
Hi Alan. I wouldn't say it's in the budget specific for this, but we have a, an operating budget with, you know, funding we can use as we see fit for the, for the operations in the Marine highway system. And we've determined, this is a worthwhile expenditure, pretty, pretty minimal, and as done as Katherine mentioned that in the state of Washington and other entities annually, and we're hoping to gain some insight and move forward with that and do it annually. So I, I don't believe it'll be a much, a very big expenditure and not too hard for us to absorb, to gain this insight. This is difficult.
Cool. Final question then is to develop a project work plan is something that is a standard thing. Then every year, then you will be able to follow through to re-evaluate each year. Is that what you just said? This project does not designate evaluation. This project sets up the evaluation, is that correct?
I didn't have a question, but I was thinking about, oh, the three years of the historical data we haven't added yet, what three years that's going to be? Is it, we've just had two years of a pandemic and that's certainly influenced on our operations. Also what, in this, this is not, not what I would call a comprehensive plan. It's a plan, but a what's new in this that we didn't see in the Northern economics plan. Thank you.
This Katherine Keith, DOT. So what I would say is the questions also, you know, up to us again, and AMHS management, what is it that we could use that would be a benefit that we did not get back during that plan and, you know, something that we can set up that is a recurring basis. Whereas that study was, was a one-time study and wasn't necessarily focused on the building systems internally to help provide on this analysis moving forward. So I would say we it's intended to be something a little bit more iterative. Yeah. And regarding time, I wonder if it's okay to move on to our next speaker and maybe we can circle back to this.
Okay. My question, is there a more detailed description to the contractor of what you're looking for that we can see? So I can see a little bit better breakdown of conversations about fareboxes and et cetera, and stuff. And, and then like norm says, the last three years are kind of tough ones to do, to, to come up with a real solid thing. Thanks.
And then let me just add to that, that it seems to me that this is central to what the board's role is, was envisioned in legislation. And so I would think that we would want to be very involved in this, and I think that's why the level of conversation has been a little more heightened around this. And just in terms of the procurement, is it going to be a targeted solicitation or just the public solicitation?
So the solicitation is going to be public. It will be a competitive proposal. So we're looking for the greatest value to everyone involved and the solicitation, if we're targeting the 13th as release date, we can to Mr. Austerman's point, we can certainly bring back the detailed and more final RFP at the next meeting. And we can spend more time going over that as well.
I think, I think that's really important. I'd like to see that added to the agenda, help the rest of the board will concur with that. And the other thing I just want to say is that I feel that having looked at the Washington state ferries and BC ferries in terms of performance reporting, that what's what seems to add to the success of an effort like this is that it, it becomes integrated into day-to-day operation and it's seamless so that it doesn't create an additional work burden on staff, but becomes a part of a regular processes. And that it becomes a live living dashboard as opposed to something that is, is static and may not be updated for several years. So I would think that that, that would be the thing that would lead to greater public confidence, greater confidence among the legislature and just in general, a greater sense of confidence in the system and, and openness and communication. So hopefully we can think about that.
Great, thank you with that. I'd like to move forward because we have our Special Assistant to the Commissioner. Andy mills, he is DOT's legislative liaison, and he's here to discuss AMHS in the legislature, and I'd like to give him the opportunity to, to share some important topics with all of you, Andy,
Thank you, Katherine. And thank you, vice chair and members of the board. It is good to, of course, be with you all again, since your first meeting, when I was there, we, we did think it was important to, so as a step back, I resource as legislative liaison, which of course carries with it information back and forth between the legislature and our department on a variety of issues. But certainly for AMHS, there are a couple of bills, this session that we thought we should at least provide a bit of a briefing for the board. So you understand what those are. And certainly if you have questions in the future related to legislation, I'm, I'm happy to do my best to, to provide some, some background and work with Catherine along those I will before stepping on to this step, which is on screen, just make sure I also address there is an AMHS corporation board, the Senate bill 170.
I did want to go ahead and let you know, that is a very substantive, large piece of legislation. It is working its way through Senate transportation. We would look to probably in the interim because we, we given the sponsor discussing that with our department, they're going to work on that in that committee, but there's not an expectation that we'll pass the legislature at the pace that it's going and how large of a lift it is, but they're working diligently on that legislation to develop it and get a committee substitute, which during the interim, we would maybe look to have the sponsor of that or our us, both of us give a bit of a briefing of what that is and what's in that bill for, so you understand that much larger piece of legislation, but these particular bills are ones that as they say in the legislature have legs they're, they're moving.
And I wanted to make sure that this board had an opportunity to, to understand some of the differences between the four bills that are out there before I step to the specifics on these, this legislation, I wanted to make sure I gave for the public that's listening and any members who may not know the CBR sweep, it's an annual provision as required by the constitution that draws funds and, and by technical definition, it's article nine, section 17 that requires it, it, it subject to the sweep, our funds for which the legislature has retained the power to appropriate from, and that are not available to pay expenditures without further legislative appropriation, or they are funds that lift purposes for which money in the fund can be used, but still require appropriation to spend. And in years past the legislature with a three quarter vote has done, what's called the reverse sweep.
And I imagine most of you are familiar with that certainly last year that the reverse sweep did not happen. And some funds were marked for, for the sweep to be drawn from certain sub funds back into the general fund or state treasury. And so there are several bills in the legislative process now that seek to insulate the Alaska Marine highway fund and the Alaska main highway vessel replacement fund from that annual sweep to make sure that the funds that are appropriated to those stay within those funds. And so to step through these, and then, then I would be more than happy to take questions.
House bill 3 22, that was sponsored by the house transportation committee was introduced to make the Alaska Marine highway fund separate from the state treasury. It does. So to insulate it from the sweep, it was then amended as a committee substitute to also include the Alaska main highway vessel replacement fund. So the PR the language currently for that CMS would keep those two funds separate from the state treasury as one prong to protect them from the annual sweep. Then you have Senate bill 2 24, which was sponsored by Senate finance. It is targeted at the Alaska main highway fund, and then adds another section. I believe it's section three in that bill that is not for the higher education fund to be separate and protect those funds. Kind of answer that question through legislation. We do department of law and evaluating these bills compared to the governor's legislation that was introduced and the governor's bills as introduced for Senate bill 2 26 and house bill 3 95, they take a single prong approach.
And that is to separate those funds from the general fund, which I believe there's a, I'm not a lawyer I'm married to Webb. I am not one of myself. My understanding is that Hickle V Cooper and the PCE cases from the courts say that if it is separate from the general fund, that that makes it no longer subject to the sweep. However, the current decision is a superior court opinion, and so it can be appealed to the Supreme court. And there is a potential in that appeal to come out with a different decision. And so moving to the next slide, the governor's bills, add a second prong approach. And this is what we're talking about in committee aside from placing both of the AMHS fund and the AMHS vessel replacement fund into separate and outside and separate from the general fund, it takes a second prompt and that is to have the legislature appropriate funds into those two funds.
I should say money because then it's less confusing, right? The legislature appropriates money into those two funds. And once it is appropriate to the funds, then there is a section two of HB, a 3 95 and SB 2 26, the governor's bills that allow permissible expenditures by the commissioner of the department of transportation and public facilities. And it allows the commissioner of DLT to expand without further appropriation. And that language without further appropriation is that second prong of protection because the money no longer requires an appropriation by the legislature, no further appropriation that is considered one more layer of protection against the sweep, should the superior court decision to be appealed, go up and go a different direction. So the way that OMB that is lead on this bill is putting it as belt and suspenders. We are, we are giving not one but two layers of protection so that these two AMHS funds would continue to keep appropriated funds within them.
The protection of the section, two of that bill. And if we advance one more slide, I did want to make sure I gave you the detail of that section two. This is where the legislature, when they, without further appropriation for the commissioner, really has the ability to drill down into what are the permissible expenditures? What sideboards do we want to give the commissioner at DDOT so that we know that they are only extending those funds on what we want once we, the legislature appropriate in this is what you get to spend them on. And so it was believed in drafting that this gave the legislature that additional assurance that deity would be spending funds deposited or appropriated into those to, to the purposes that they designated. Only. We have been talking about some additional features that could go into the bill for additional reassurances to the legislature, that the commissioner would be following what their policy direction is. But in some way, this section too is more prescriptive than the current situation where they appropriate funds, the commissioner or DDOT AMA just have a little bit more latitude and how we can utilize those funds for AMHS of course, but in this way, section two drills down gives the legislature a bit of a control while relinquishing that secondary appropriation. I'll pause there for one moment and ask if there's any questions someone has that I can try and answer
Okay. Well, I just wanted to mention that house bill 3 22, the house version is up in finance, and we'll be continuing to work with legislators as they deliberate on the mechanism that moves through the two bodies. And of course, if you have any questions that you didn't think of right now, but want to ask later, please feel free to always email, I mean, and, and include Catherine in that. So she's backing
Andy, what, what is the, what is the outlook here? I mean, given that the house version is in house finance, do you suspect that this is at least going to clear the house and be referred to any other body or that it's going to be in the traffic jam at the end of the session?
Peggy, matter of I say, that's a good question. If I was prognosticating based on conversations that we've had, I do think one of these bills will advance this session. I think there is an appetite just again, I'm opining here a bit, but I do believe that the legislature will pass one of these bills through, because people see the merits of protecting the Alaska Marine highway operations and funds associated with that from the annual sweep. And so I would see one at this time, it's, it's still a highly deliberative process cause we're, we've pitched out some ideas that potentially support the second prong while giving some further assurance that, that without appropriation section doesn't erode their ability to have oversight. And so we we're continuing to work with folks
Thank you, captain Taylor. The best answer I can give you is the governor's current proposed budget does seek to utilize federal dollars, 135 million. I believe it is. And the, there are differences of course, in the house and Senate, which are developing their budgets on, on the approach. And of course, once those bills make it through the entire process and through the conference committee, we'll have a much better sense of, of an answer on what dollars are being appropriated the source, really, but from the perspective that at least I've, I've seen on these, what we're looking for is any funds that are put in there. You don't want to con to go back through the legislative process to make the argument of appropriating those dollars again. So we don't, we don't, whatever dollars are put in there, we don't want there to be a sweep that takes those funds out.
And then legislators have to go back and have another conversation about appropriating them back in it. It is nice if, if that decision is made, that it is it, it is done. And you're talking about the next appropriation rather than those same dollars. And there, I imagining that you all have heard that there is a concept with the number of dollars that are coming towards the Alaska highway system, from the infrastructure bill that some of those funds could be utilized in the future. People have sort of used the word endowment or something, but some, some savings of those to further the Alaska Marine highway system. I haven't seen an official proposal along those lines, but I think a lot of folks are sort of conceptualizing what this amount of dollars could do. And we'll, we'll look to see if any formal proposals come forward for, for those dollars. But right now it's about when you build those funds up, you don't want to then go back the next year and half to try and work to appropriate them back in
Just, just for clarification, Andy, and maybe Alan could jump in here too with his legislative experience. But my understanding is the sweep is only triggered if we're in a deficit spending situation and it only targets UGS funds fun. So that would only affect federal receipts. If, if those DGF phones were targeted for a match for federal receipts.
So my understanding is the gross revenue of the system, my, my go back and would need an appropriation. So I, my understanding is that some of those would be what, what there would be a concern about. But I know deputy commissioner carpenter might have more detail on that. Or as you said, Mr. Osterman may with his lengthy experience, have a better answer there too.
Yeah. The, I can chime in a little, the sweep occurs when there is a liability, an existing liability to the constitutional budget reserve fund, which there almost always is. So it's a never ending annual Ironman that, or the constitution that all funds within the general fund, this list or court ruling are swept to the CVR. I missed the second part of your statement there, when that,
Thanks. I mean, I think you're, you're right in the fact that, that there's something like, I don't know, what is it, 12 billion, $17 billion borrowing from the CBR so that the likelihood of it not being a sweep status, but is unlikely, at least in maybe our lifetimes, but it, at any rate, there are things that trigger it. And, but I didn't think that any federal funds were targeted with the sweep.
Yeah, I think Andy's point was that if, for example, if we create one of these or the Marine highway system fund stays, as it is, and we build up a balance of revenue collected. If we use federal funding, we built up a balance of revenue that that revenue would be subject to the sweep. So if we use federal funds for the operations, which allowed us to bank revenue at the system, that would be the worry. So the intent here is to move the Marine highway fund outside of the general fund to avoid the sweet and good stuff.
I guess just calm conversation is pretty much correct. If you do put that money into the fund and don't have a protection from it, and then you've spent the federal dollars and you're going to end up in the, in the end with zero. And so it's very important. It's happened to you? My only concern is that we do this, does that in open Pandora wash where everybody else was as the argument is going on down there right now,
Okay, wonderful. What's that Matt McLaren off for the remainder of our time, but we'll be discussing the AMHS seat modernization plan. And we haven't until three 20 for this discussion, unless you want to carve out time for another topic beyond that. And it may be most efficient as we go through these slides, feel free to ask questions because materials presented are pulled from the modernization plan and it may assist in the dialogue and, and help Matt answer your question specifically as he can point to the materials on the slide. So with that, Matt, thank you for being here and let me know when you want to progress to the slides.
Okay. Thanks. So you, haven't got a lot to go through here, so I'll try to, I know we're kind of pressed on time. I'll try to move through fairly quickly. I may jump a few slides Catholics just to hit the main points just for the sake of time, and then we can digest the rest later. Hopefully. So, so the first slide here we put together, as part of this plan, you probably saw the full write-up and everything, but this timeline kind of goes with that plan as far as what we would need to do when, when the work would need to get done. We show operating plans later that in with this timeline, this schedule, we've got costs here of projects, estimated costs starting off first with the testimony, you know, the TRV project, you know, we're in the, in the design phase. And as you talked about earlier, went out to, to bid for the CMGC contract, which is great news. So the hope, at least as far as what we put in our operating plan, and you'll see some numbers later costs yearly costs.
And so this is a timeline that it starts off with. If we could get that, TRVs started building December of 22, mid December. This coming mid December would be ideal for this got Tasmania crew quarters on there. The Hubbard crew quarters already underway. The Columbia CPP project is coming. That's been put out for bid a couple times, kept filing, probably answer if you have questions aware that that now, but I think it's the second one, just close to yourself. And then, then we move on. We, we look here at a main line of replacement vessel. As we know, the, the main lines we have are getting older than that new SCA was one of the original ships built 63. I believe if I remember off the top of my head. So, so very old coming up on 60 years, which is very old for a ship. So we were looking at replacing the main liner there. We've also got mainline or a second mainline or here, which in a minute, we'll talk about some decision points we'd have to make. We could go a couple of ways with that second main liner. Whether at that point we'd want to replace something like the Kennecott or just build another main liner and have, and replace maybe the Columbia. At that point, it keeps the Kenny cut on the run. So that would be a decision.
Not really a question. It's a statement for everyone there. I'm ready to Larry about discussing retirement of vessels prior to dedicated construction plans to have another one built, we need to keep everything we have right now. We've, we've seen in, in past practice vessels, not available and service go completely interrupted in the last few years. So I I'd be hesitant about retiring any vessels or getting ready rid of anything until there was a platform for replacement. Well-established
Yeah. And I would agree. I mean, that's definitely something that, that we've had happened. And with the plan with the shifts that we have going forward, we, we won't retire ship without having another ship available. Like we, this has a Matt news can retirement on there. We'd have the Columbia running and we'd have some other ships we can use in that case because the funding wise would be two main liners anyway, which we'd have as well. So moving on to the next slide, we talked about some decision points.
It is a bit long. We just put that kind of in there as a placeholder, we can probably shorten that, especially if we can use the current TRV design as a base, you know, base for the whole design. And that's why the cost there is much less than the cost you see there, TRV design $10 million with this main, my replacement, we're looking about $3 million. We would want that ship to be a solar ship as well, to be able to go to prince Rupert and, and also, but 12 months probably is a little bit long for that. If we're using the base hole of the, of the TRV, cause we can, a lot of that design work's already done with the TRV. We can make some modifications, stretch it, take out the elevator, do some other things we can modify there. So that'll save some money and some time for sure on the, on the main liar, we just plan 12 months just in case. Cause sometimes the, the design might not take that long, but putting them out for bid, if we're using federal dollar, sometimes that can take several months to get that bid process done.
Yes. Thank you. I, along that line, I see the Aurora Locati retirement 20, 24. Yeah. We checked my glasses. Make sure they weren't smudge, but not every port has a dock that will accept another vessels. So I don't know if we could build docs quick enough to have a replacement. Does that mean that we'd be going without it, any service until dock or another vessel is going to built?
No, and that's correct. And that's a good point. And that's a decision point too. There are in the Connie. We you'll see a couple of slides for now, or we did have on the bottom here, some doc work that needs to be done because if we're doing crew quarters on the Hubbard and Tez Molina, we definitely definitely need dock work done in Pelican Cordova to Pelican bay. We know that so that work would need to get done or get started as soon as possible, especially for Pelican to be able to accommodate an ACS. But we'll see, we're talking about decision points two on the next slide, which had Warren, the Connie are a part of that. Do we want to, you know, the second bullet there, do we want to keep the roar and Connie around at least one of them a little bit longer for exactly your point norm, you know, until we get that doc work done to we're able to meet those ports and, and to provide backup service, or if we have shifts in overhaul that the ATF or something overall, we can have a shift to cover for that. There's a course of costs with keeping those one of those at least, but definitely something that needs to be considered and discussed here.
So it's not a modernization plan. If the vessels are separate where they can't be interchanged. So if the Taz Lena doesn't get cruise quarters, what we, what we're setting up is another one-off. And as I said, previously, any retirement vessel, I guess we're going to have to look at the time. I don't think you'd have to keep maybe both of them, but it'd be good to keep one around. And until another main liner is established to be built. And that's it.
Well, I've made this point before. I think that if the fight is to bring where the ACS all the way from cascade point to Aqua bay, there it goes 250 gallons of fuel, then go out to one of the small market communities. We're adding more costs that down the line and you look at the right for the farebox. How could we possibly close that gap? And we're over supplying the community. Thank you.
Well, let me just add that, you know, we're, we're looking at this information and it, you know, this there's a complex decision matrix here that is not necessarily revealed by the way that information is being presented. And you know, just one of the answers that I think as a board member that I really want to know is are we with, with this modernization plan, are we building a system that is responsive to our community of need? Because what, what my sense is is that where investing in larger mainline vessels as an overall plan, and we'll, we'll be down to just two vessels that serve the smaller market communities. And I, I'm not clear how that creates a more nimble versatile system responsive system.
Yeah, that'd be some definitely the consider leaving at 2 35 round and ships with can serve more sort of more ports. And as we get to, we had some information which we can get out to you to what shows the fleet, you know, where the fleet is going, where we get to down the road, the operating plans can we'll show service areas where we can serve with those communities. So even with the fleet shrinking, you know, down the road, saving costs, we're still able to provide service to those communities, provide ships that are more consistent. They're not, you know, they can do more. They're not, we're not stuck with one-offs so much, you know, we're, we're keeping shifts that can do more really at that point, the only we'd have a fleet of mainliners that can run long rows, Kennecott type ship run across Gulf coast, Amina, Southwest, which can also be covered with Kennecott. We'd have our smaller ships that the ACF. And then of course Latiya is still always going to be a little bit of a one-off, but that only runs a eight mile run. So that's, that's a little bit different, it's it it's fitting for that route.
So back on the decision points that the Tasmania crew quarters definitely gets more. If we do that gets more to consistency within our fleet, you know, more ships that can, can cover for each other and do more things re the Earl economy. We talked about the dead end quarter project on the mat. New TSCA is coming up where we'd have to do something there by December of 2024. So I'll make a decision on that. That could potentially be potentially very costly project, you know, it's in time consuming. It just depends what is found once it's opened up. I mean the last project, the mat new school went down to Portland was a, I think a 10 to 12 month project turned into over two years and close to $50 million. And then we ended up only being able to run that ship four. I've got the whole operating plans here. We ran our before and a half months in three and a half years because even after she came out of that project had to go back in after a couple months and get more, a little bit more done. So, You know, there's, there's some risks there.
That's the deadline, the management would have to come out of service by that time. That's the deadline, the coast guard gave us, we have to start the project or we can't run when that shift. I mean, I'd have to probably can answer more detailed, but they gave us a five-year exception, I guess, for lack of a better word to
Yes. Kevin Falvey. It's actually, yeah, it's actually September of 20, 24. We'd have to be out of service, the mountain, which was the only ship in our fleet with dead end corridors, I believe was the only one built with dead and corridors. I don't know what the history was behind that as long time ago. We do have,
What, what do you mean as far as getting the project done? Well, I mean, I mean, we could, we could run until September of 20, 24, then we would have to be in a ship yard, correcting the dead end corridors. Okay. We've got preliminary design done. This is actually something that should have been done during the ships midlife. It got missed, it got missed by the coast guard and by us. And it came to the surface when we were in Portland doing the repower and there was no way we were going to regroup real quick and try to fix this in Portland on top of everything also we were dealing with, so the coast guard give us a pass and they said, you've got so many years to get this done. You've got to give us a preliminary design within the next year. We've done that. So, so, so that's done and, and there wasn't a heck of a lot more to do as far as the design part of it. It's a matter of making a decision. Are we going to do it or not? And like McLaren said, we, we don't know what we're going to dig into it. Once we start digging into it with that steel and things like that. So it's something that is regulatory. We have to do it. And if we don't, that's the end of the <inaudible>
Yeah, just for everybody as one of the captains on the mat, the last see live by the coast guard will be issued for that ship 20, 23 fall of 2023, when you come out of the yard. So the planning for that ship yard would need to, if it's going to go and keep it as short as possible, that would need to go out to bid next year. That's it.
Yeah. Thank you. Just a quick note on the festival replacement timelines. I appreciate that sheet very much. It gives us a idea of where you're thinking and how we're going to get there. I do firmly believe though that when we get to the June, get down that catch, you can have a meeting that there needs to be a community service projections that matches up this, this sheet so that we can have a better understanding of how they plan on providing the same service or basic service to all these with half the fleet. So, thanks.
Well, I would say the, the sooner, the better, I mean, our, our ships aren't getting any younger, so I mean, the sooner we can move forward and, and come with some of the main decision on this plan, the better, I mean, we can, I can certainly cost out both ways, you know, which ways you can on which ways this is go or potential costs and, and what it does to the fleet and, and, you know, and port calls like, like Alan had mentioned with four calls and service to communities when it does each way and her overall cost and everything else too. So I think time is definitely of the essence, I would say with these decisions.
I just have a comment on the basic levels of service in the white paper. The assumptions for 2023 are 362 weeks of service and about 60 to a hundred port halls. And we are already having a lot of complaints about not having enough service until if we're reducing or proposing reducing to two 40 operating weeks in 4,000 ports, ports of call some words that would be a really big concern for our users.
Thanks Madam chair. And yeah, on that same line of thought, I'm not sure this was the two 44,000 was a proposal at all. It was a, but at challenge point and Cynthia's point is kind of what I've been saying all along how I dunno how we invest or determine the level or the fleet we need in the future. If we don't know the service we're providing or the intended minimum that we'd like to provide, that that seems to be the never ending question we heard earlier from concerned citizen about not receiving enough service. And, you know, there's always the question of why do we go to what communities and, and how often do we go there? I don't know if you've heard my testimony and sent transportation yesterday, but there's numerous reasons that we do what we do today. And a lot of it has to do with our limited equipment and stretched all over the state to provide that service. So again, getting back to what, where do we want to be in the future to drive a lot of what we invest in? And I do think it's kind of funny, Matt, that you on bullet three, you mentioned retiring the matinee Scott early. I think she's well past due retirement. Thank you.
Well, I was just going to address part of it and we can, we'll we'll address the poor calls and freaks to be part of what it's not really safe to compare, I guess, 2023, because the governor's budget 20, 23 is certainly a lot more than we've had the past few years and a couple of slides we'll get to the numbers. The past couple of years, we've been right around 200 service weeks and 3000 poor calls. So, and we've got to figure those poor calls. I mean, 500 or so of those are to Metlakatla. So, you know, it's certainly been a lot lower service past couple of years, but that's something when we get to the operating plans as operating plans later, we can go through those. We probably want to have time today to get through them, but we can, we can certainly before the meeting kids can, I can, you know, we can do a poor call list and sheet and compare to previous years and service levels and operating weeks and just show, you know, show what communities will begin compared to what's been in the past.
Great, thanks before Shirley talks. I just want to say that the, the very working group reform, very working groups, it's been a great deal of time talking about what is essential service and how do you know, how do we do that? And that I, again, I, I want to point to BC ferries that as they've changed their organizational structure, what they've done is an essential, a level of essential service that is contracted for as a separate corporation. So the contract with provincial government to make sure that central services provided so Shirley, and I'm going to hand the gavel back to you, it looks like you're ready.
Well, I could just be a minute or two. It's hard to say I was listening in on the phones the whole time, but I just couldn't connect her getting my hand up. So thank you. Ma'am what I'm looking at. The modernization plan. You know, this is, we've looked at epic a couple of times, and I know at least the first, the first four items on there, I'm hoping that the board will be ready, make decisions on and our main meeting in kitsch. Can I, and I say that because I feel that when really still we're really behind schedule on this we're years behind and going back to when, when out of talking about the reshaping study and all of the other studies we've seen that all starts with modernization of the fleet. It all starts with getting rid of the really old vessels that are just, just taking millions and millions and millions of dollars to try and keep it float.
And when I really looked at what you're proposing math, and when I looked at all the different connections, when you look at having the tax lien and the Hubbard, both with group quarters, you know, you've opened up prince William sound, you've opened up Lincoln Lynn canal, and you talk about the other two main liners replacing Columbia and the Matt Matt, sooner than later, I would, I would certainly think you'd have these vessels that are able to serve Southeast as well. So following the TRV design to me is an absolute, there's no reason to, to reinvent that wheel. It would obviously they would be designed a little bit differently for depending on what their job was, but, you know, putting this off a Teslin with a crew crew borders may, I mean, if we make these at least some of these decisions, because I don't think we're going to really know what the basic level of service, I think that will come as, as we continue to discuss what it is we're doing and at what age that can ACOs can retire. I think that's going to be up a lot to, you know, the folks who run mechanical and in what her maintenance levels are. But if we can come up with at least the four first answers to, to give direction recommendations by early may, can, is there any way that, that the, that we could really aggressively start trying to replace the two vessels that we just know we have two?
Well, I think definitely for using a similar design as a TRV and the biggest issue I think is going to be funding, which, which we'll get into two and a couple slides from now with the, the IJ funding potentially to be able to use, hopefully use some Marine highway funds, as you know, as the governor is pushing to use federal money the next several years, which would be a great help for us. And hopefully be able to keep, you know, as Andy talked about that, that bill would help us not have that Marine highway fund subject to sweep. So we can build that up for the year. Then hopefully use that to modernize a fleet and, you know, do some of these things that we haven't been able to do for several years because the budgets have been tight. I mean, the state's been tight on budget, so, but, but yeah, the sooner the decisions can be made, the sooner we can get going on it and, you know, get our, get our team going.
I mean, kept valley can answer definitely the faster we are, you know, or Rob, I mean, I know discussions have already been made, been talked about with the docs that need work and things like that. You know, those are things that definitely need to get going if this is, is, this is a direction, you know, with some of these decisions and there are Connie those, what we do with those, those are of course going to affect operating wheats and port calls too. So those, all of this kind of leads into bullet five there with operating weeks and port calls. So it depends, they're, they're kind of all intertwined, as you said,
Yeah, this is norm just to reminder, 500 gallons fuel. Every time we leave cascade point to do an, to do one of those five small market communities out in the Northern AC streets corridor. And I do have one more question, captain Kelly's on this is Connie coming out? Is it supposed to be out on the right the 27th of this month? Are we going to schedule
Yeah. Norm we were. Yeah. Yes and no. So here's what here's, what's happened. Yeah. We, we were scheduled to run out of Juno on Monday the 28th, Wednesday evening, we finished the sea trials. Everything ran absolutely fine. It was, you know, later Wednesday evening we still had COI drills and a few COI inspections to do. Unfortunately we've got a flying crew change coming in or came in Thursday so that, you know, you're not now you change your crows and you're trying to get COI drills, the coast guard done so that, that, you know, put a wrinkle in that. So, you know, we, we, we talked to the captain and the oncoming captain and they felt it would be better to get the new crew on board today. They're they're here today, get them ready to go and do the, do the COI drills and everything on Monday and, and, and start service on Wednesday.
We do have things covered for what we missed on Monday and Tuesday, technically with the test Lena, and then again, the Connie on Wednesday. And it's probably a good thing that maybe we didn't get pushing along too hard because I got a call this morning indicating that they've developed a leak in one of the far lines in the engine room, which means vigor is bringing in a Marine chemist from Seattle because they don't have a Marine chemist staff to be sure the, the Andrean can be welded in. So we're in the process of doing that. So, yeah, we were ready to go norm and had a couple of little things that really beyond our control caught us, but we'll be, we'll be running out of Juno on Wednesday and we've covered Monday and Tuesday. Okay. And the Kennecott's on time so far, the Kennecott's looking good for April 21st. Thank you. Yep. You're welcome norm.
Okay. Yep. Yeah. So they asked him for time, we've got, we're going to skip quite a few slides with operating plans with phase a, we can get him more detailed that. So like I said, a minute ago, the biggest issue is going to be funding for these ships and these, these projects we put together, I put together a couple slides here there's and there's different scenarios. I know the, the legislature has been kicking around talking about state funding or not state funding to kind of help us through years, or what's going to happen five years down the road. So this first slide here shows the top. We've got the source of funding. If, if we have we're using the IAG a money, then this is assuming, you know, we get roughly 90% of the funding or $180 million a year. So there's a pretty big assumption there that we're hoping we can get. So that would mean what we're spending our operating budget and the difference between that and the hundred 80 million we'd be able to keep to use for potentially capital projects here. So you see that there, one of the sources I J funds available for capital projects, that would be the excess quote unquote excess funding that we hope to get. And then the Marine highway funds is revenues, excess revenues.
And that's only, that's assuming we'd have to use some of the Marine highway funds each year for our annual capital overhauls. So this would be what would be left potentially from that. So, and then on the bottom, we overlaid the timeline or the cost of these ships, the cost of these projects and the years, you know, we'd have to do them that matches up with a timeline earlier. So essentially what we're showing here is in the bottom, right? And I do want to point out this as in millions also. So the bottom, right? Essentially, if we get no state funding at all for the next five years, we're relying only on the revenues we generate relying on the IJ funds, where we're showing we're going to be $68.1 million short to, to meet these needs, to build these ships. So, so we'd have to find some other fund source at somewhere to, to cover that $68.1 million.
On the other hand, I think slide 27, 2 slides. Now it shows if we were able to get $50 million of funding each year from the state. And they said, you know, so we could use that state funding to cover annual overhauls. We'd essentially be able to keep all of our revenue generated. We wouldn't have to use as much federal money for annual operating expenses. So we'd have the state giving us $50 million a year, which has been similar to, what's been the past few years of UTF. If that happened, we'd be able to the bottom right there. We we'd have $131.9 million exit are I say excess, but we we'd be able to build all those, build those ships and still have $131.9 million left for future builds or future budget or whatever we decide to do that beyond the five-year mark.
So, so to make this plan in other, in summary, to make this plan happen, we are gonna need some fund source outside of just the IJ funds and the revenues regenerate. You know, if we got it down to $20 million a year, we, well, I guess $25 million a year roughly would be about breakeven. We'd be able to build the ships and, and break, even if we got 25 million a year from the state, but we just wanted to lay out here just, you know, potential of what we can do. There may be some other fund sources too, for, for docs. I, we get, this does not include variable formula money. That's projected to go up as well. That's what we've used in the past for capital federal capital projects during the year some dock projects. So this does not include any of that money in there. There's potentially some other funds, but like Catherine, I think said earlier where the notice of funding opportunities haven't been released yet. So we're, we're not sure all the details on which pots or several products have IJ funds out there. So this, this only includes the 200 million a year that's, what's been more publicized.
So I don't find any questions there. We've kind of, we can summarize more, go into more detail in the other spreadsheets on there, go into more detail of where we spend, how much we'd spend each year in the budget and everything too. But that may be something we need to go into more detail in person and really, really hashed it out a little bit more.
Yeah. I was just wondering, so for these bills that are in front of the legislature, in the Senate, the portion of this federal money that's coming in would not be available for the, for the sweep, but it would still be yearly. We'd be waiting on the legislature to appropriate to 25 or 50 or whatever is, is needed. Is that right? Right. Assumption there.
Just both as a student of the state budget process and as a former state employee and a, a victim of the state budget process, I, I really feel like if you get off of the UGS requirement for the system, it's very hard to wedge your way back in and the circumstance that we, I don't, I just feel that the, That the budget projections and the recommendations coming from the board should be that the state maintains its UGS commitment to the system until we reach until we reach a certain point. I mean, maybe there is a benchmark that we could identify if at some point in the future, but I feel that while we are in this situation with a substantial amount of federal funds coming in, I can tell you from experience, if you take something that has been paid for UGS and move it over to a federal receipt, you can kiss it goodbye, Because it's very hard to get back into UGS without when, when the state becomes accustomed to not paying for something out of UGS, it doesn't want to pay for it anymore. So I think that we have to advocate for the state to maintain its UTF commitment to the system throughout this process. And, and the utilization of the federal funds should be spent in a way that, that invest in assets and systems that will get us to,
So this kind of, this show, several things that it compares a lot to previous years, and this is, this is a breakdown of, of, to some costs and uses of money over. It shows 2018 to 21 or 22 projected, and then the government's budget. But the main thing here want to point out is as we get to the modernization plan, the <inaudible> 6 27 there, the total operating costs, the top section there we are decreasing our total operating costs and because of fewer ships to, to run. So we're decreasing saving some money there, decreasing down about $115 million a year that that could bump up a little bit. If, if the decision is made to keep the Aurora or LA Connie, or to keep the Kennecott a little bit longer than those costs will be up a little bit more. So this is if we don't keep any of those ships after, you know, don't keep the 2 35 after the ETFs get a crew quarters.
So sustainable, consistent level. If we're keeping the Kennecott operating in the summer, we're keeping the least one of the two 30 fives would be 115 million would be up in the 120 to 120 $500 range, which would be kind of a sustainable level with those ships. So, and then at the very bottom there, we have just statistics for each of those. There's, there's a lot of numbers there. We've got the first there's operating weeks, like was mentioned earlier, the government's budgets 360 2 0.7. So even though we had a minimum service level on previous lives, 240 operating weeks and 4,000 poor calls with SNF Y 27, we'd have 254 calls and 4,300 or 250.1 service weeks and 400, 4,003 of the poor calls. And we have operating plan to show what that would look like as far as service levels. But again, keeping the 2 35 around to help out in the summer, you know, maybe make the village runs well in ACF to run the Lynn canal or cover for overhauls, things like that, or keep kinda crawl around that of course increase the operating weeks and numbers of poor calls and service levels also soon. So any questions,
Well, I think we definitely have to have conversations with the crews that run those ships and our engineering, and it definitely has to be a collaborative conversation. Look at what we project those ships are going to need as far as work in the next five to 10 years, if we keep them around. So I think definitely we'd have to consider. I mean, they both had major steelwork done in the last year, year and a half, a lot of steelwork replaced. So then I think it would just come down to cost, you know, which, which we think would be cheapest to maintain, which one may be in the best shape and, you know, cap, it could answer better than that, but I think it'd have to be some analysis on, on the ships themselves and you know, what, what status in.
And I think, yeah, I think that we're running up on our time so we can definitely get into more detail next time or as, as we meet altogether, it's it's worth really, I think we're digging into a lot more, a lot of detail with this and just hashing it all out in the same room would definitely be beneficial.
I can go ahead and turn it back over to you. Great. So we now get to talk about next steps and have any closing comments, or we do have two virtual meetings that we have the potential to discuss things further on April 8th and again, April 22nd. And it looks like we have tentatively come to terms on a date for May 2nd and third for catchy can. And so that's another point of discussion. If that's something that we can not confirm today. And so if we want to meet both the eighth and the 22nd, we can determine some topics for those. Or if you want a break, you let us know what you'd like to accomplish here in the next month. Thank you. Any board members want to put their hand up and I'm thinking for a coming meeting topics for these next two zooms, we should hopefully really kind of dial in drill down a little bit more on the list of, of items that need decisions that would probably be made when we're there in may. So definitely, definitely on the planning process. So Kevin Hillard,
Yeah, man, I'm chair of the Thursday topics on the one slide a while back there was like four topics. So we said we wanted to, you know, it doesn't test and I get to the quarters and retired a little Connie says on the monetization plan. I think that we should definitely, like you said, come up with a
Thanks. And that's a really good idea. And for Anne, if anybody has any questions at all or wants more clarification on those decision points, just make sure you get your questions into Catherine this week so that we can address them sooner than later. So agreed camp Hillard whenever.
Thanks, Shirley. I think this discussion largely took place while you were maybe offline, but we did look at the evaluation scope of work. And again, I think that has a great deal to do with what the legislative mandate for this board is as well as establishing performance measures for the system. And so I, I would hope that that would be a major part of our discussion when we meet in person and catch a Canon may. But I, that, I, I do think that there's probably just given the, that it would be worthwhile to have some additional review of that before we get to catch. Can
Yeah, and I, it just, I, and just to speak to that point, I really think it's important. And I think norm, and maybe a couple of other folks raised this point about what period of time are we reaching back to, to evaluate, I almost feel that it would be better to simply do a forward-looking evaluation system for the system in the future, as opposed to spending a lot of money looking at the past. Pardon me, simply because of the unusual circumstances of the past two years and That again, if we're trying to modernize and reform the system, don't you want to be really considering what we want this reformed system to be doing, as opposed to what it was capable of doing in the past.
Yeah. Thank you. I, I want to go back to the comprehensive evaluation that we're talking about a little earlier in the meeting and make sure that we have a little bit of a clearer detailed breakdown of what that RFP is going to be and what they're asking for, and then any evaluation needs to do. It's going to be based upon what you asked for and if we're not asking the right questions to start with, and I think that we are spinning our wheels. I agree with concepts that using the past data doesn't necessarily give us a true picture. And so those kinds of things should be taken into consideration before you do this evaluation. Thanks.
Oh yeah. I, I like what I did idea too about funding and I think we should discuss it and formalize a recommendation to the legislature. Maybe that could be on for next meeting topic. Thank you, Paul. Good idea. Thank you for that. We can talk to Andy about that. Maybe the carpenter.
Thanks Madam chair. I guess I, I pulled up our legislation again, HB 63, which I'm not sure. And I kind of look at what is our, you know, what we're supposed to do as a, as board. And I think we need to all, maybe we need a outline of what we need to produce and timelines of that. I mean, for example, the short-term plan must include recommendations for the state operating and capital budgets. I wouldn't say for this year, but for next year, obviously we need to have some kind of backwards working to where we get to that point. And then I know this long-term plan. I worry when I worry talking to my planning director and how it integrates into what he's doing, I really want to make sure we have that conversation. And so we're not, I don't know, not necessarily duplicating work, but that they, they do integrate together. And, you know, there's, there's a few things that we're supposed to have for the governor and the legislature. I just want to make sure we're on track and we know what those are clearly. And then we address those. And then going back to the service level, determining as a group that that level we think is acceptable with public input as a minimum. And then of course you could go beyond that, but it would be nice to have a Ford support as level of service that then we can work around. All right. Thank you.
Yeah. Thank you. I, I just comment on the funding in the legislature and I agree that that we should do something, but I think it's a little early. It seems to me that Rob says this next year is that we're really looking at for having an input on those funds as April. The legislature is not going to act on new funding or anything else that we would come forward with. So just be aware of that timing of what we need to do
It might take in. And I think then what I can correct me if I'm, if I'm wrong, but I think the point and the main point here is to let them know that that's what we're going to be suggesting probably won't happen this year, but we've realized that it's very important element to moving forward. So thanks. Thanks. Ellen got Miller.
Yeah. I'd like to second that I think that we should definitely put a letter letter together for the legislature, just so they know what we're thinking, even if it's gonna change next year. Secondly, I was just wondering since we're talking about the catch can coming up in the meeting in person meeting, is there more people traveling to catch can and would be to like have it in Juneau? Or how was that? I mean, I forgot how I adapted to the decision of actually having it in catch can.
I'm afraid that that was kinda my, my, my fault, the reason for test can, and I know it can be really difficult to get in and out of catch can sometimes it's because every, everybody that we need to talk to and have these conversations with is there. And we can actually, you know, see how things are planned, how the schedule is that talk with the scheduler, you know, talk to the folks who do, you know, work with procurement folks in Juno who are buying the food for the vessels and for the crews and, you know, talk to the engineers and everything is there. And
Hang on. There we are. Okay. On our board, there would the operating plans, are we going to go over that and consider that part of defining minimum, low service level or whatnot? I, I looked at these operating plans and I have some concerns there, but where are we going to address that
Maybe? And I'll ask Katherine or Matt, this is something we could address at the April 11th meeting. So if we had to kind of pass by it due to time constraints, go back to those operating plans so we can see what vessels are in service doing. What routes would that help normal who put that on the next meeting and just get back into, Okay, we'll probably help us do that one at, and then captain Hillard
Just want to go back to the funding issue one more time, which is that, of course, the legislature now is working on the net ex fiscal year budget and there obviously will be implications for the system. I think, I think we're all essentially on the same page for this next fiscal year, but I do think that we should probably err on the side of over-communicating at this point, even if we're not necessarily going to be impacting the decision one way or the other, but just to say that, you know, philosophically, this is where the board is going with regard to funding and, and we want you, the legislature could be there with us and, and the administration as well. So I, I do, I do feel like it's, it's worth having a conversation, a letter, something from this board at this time saying there are important funding issues that will be addressed as we move forward.
We want to communicate with this particular point now, and I was going to say something else, oh, about, again, about the baseline service. If we could see that matrix, that overlay of time schedules versus community serve with the modernization of the fleet to help us understand what's in and out of service and what can, and can't be what service can and can be offered during when we're making these key decisions with regards to the Madden needs to project or some of these near term decisions. I, for one, honestly, can't believe we're still here at this point in time talking about crew quarters on the task. Selena, I really felt like that decision was made. And I mean, if it was strictly a matter of funding available that it didn't get done, but it just seems to me like those decisions were made honestly years ago. And I can understand why we haven't made progress on that one. So thank you.
Yeah. I'm going to second what Juanita just said, everything she just said. I would like to see the baseline minimum service, I think on both the next two meetings, I believe that it's critical at redefining the public's trust in the system. What they have to know. You know, we heard from, you know, Pelican we've heard from Angoon, the system is not meeting the needs of everybody right now. And, and that is one of my biggest concerns. It is hard to pay data and project data. If you don't have a minimum level of service. So it's hard to ask for funding. It's hard to have asked for anything when you don't know what you're the bare minimum as you shoot you're shooting for. So prac practices studies, we don't know what the system can do unless it is, you know, we've been running with, okay, this is what our base level is. We know that this does, we know we can make this much money. We know this could happen. I think that is such a critical piece, but I, I think that it's imperative that we address that and get that some something locked down in that nature and definitely by the, the in-person May 2nd meeting to have that marked down. When we meet with the staff saying, this is what we're going to say is the face level. And that's all I have.
Thank you. Madam chair, you know, highly on the defining the baseline or minimum level of service, I guess I want to, I was hoping we could add to that an education to the service we're providing now and why we're providing that level of service. Because I mean, we had testimony it's yesterday and Senate transportation topic was routes and service and the challenges we're facing right now and how stretched thin we are with the equipment we have. And I mean, we hear people and they're, they're wanting more service, but we really can't provide more service with the ships we have at the moment. And we're running pretty much all the time as M as much as we can, given the crewing, giving, you know, all the challenges we're dealing with. So while we hear you, we're struggling and that's, you know, getting that, but again, defining that level and how do we get to that level with, you know, an investment in, in more equipment and, and having that reliability, it just to have that conversation and continue that conversation. So people understand what we're dealing with in the present and where we want to go would be great. Thank you.
Thank you. Yeah. And, you know, for all of us who served on and tap for all those years, we talked about this line of basic levels of service constantly, and they changed due to, you know, different for different reasons with the fleet and the plate structure, et cetera, and trying to find that perfect sweet spot is going to be probably impossible. But I, you know, having the conversation to try to get to a goal of what we have decided that we think is, you know, a really strong element for the system as a basic level is important, and it can be flexible. You know, we were putting a lot of, a lot of thought and, and hope into the modernization of the fleet. That's completely different. And so vessels are going to be operating differently, but we'll definitely have to have those conversations sooner than later. I think whenever,
Well, I just am reminded of my grad school operations management class, which said start at the end. That's the first rule of operations management start at the end. What is the outcome that you are trying to deliver and then work your way back to build the system that you need to deliver that level of service. And so while I appreciate that, there's again, this is, it's a complex system. There's multiple of decisions that have to be made if we're not doing, if we're not delivering on the service, then we, you know, why are we building anything? I mean, we, I mean, yes, obviously it's to provide a level of service, but without that benchmark out in front of us, it's hard to justify some of the other decisions in the sequencing of decisions as they're being made. So I do think that we need to have that basic or a scent.
I don't, we, there was in, in the reshaping work group, we tried to not say basic, but we tried to say essential cause people really rejected that notion of basic as that. What, what else are you going to take away from me? And one of the things that I will say, having sat through many, many meetings about the ferry system is that people in the system having either had service or been a part of other vessel investment decisions in the past, feel that commitments and promises were made and then broken and for a lack of a better place to lay blame to those broken promises, they lay it on the system. It may lie elsewhere, but that's what ends up happening. And so when you are an operating something that is inherently a service, it does rely on customer trust and customer involvement. And that seems to me again, at the very end of the system, the end of the, the, the question that we're answering here is, is fundamentally broken.
And so we have to, we have to make an and keep the system has to make and keep promises. And it's it to me even, I, I know nobody likes to hear this, this statement, but even if it's at a reduced level of service, if they reduce level of service that you can consistently deliver and people can rely on, they will come to support the system. But when you keep breaking your commitments to them, they they've learned not to trust us. And so, I don't know, I guess I just come back to start at the end of where you need to go and, and work your way back, rebuild your system, modernize your system based on that essential level of service. Thank you.
Good point. Have I missed anyone else? Thank you, Matt. Again, and captain Javi for, for being there, giving us a lot of information math, and obviously there's been a lot of Fox put into the operations plan, the modernization of the fleet plan. You all have been talking and wanting to do that for years. And now here we have money this fluke and, and I agree with Robert Venables has said it several times, and I know a lot of you agree as well. You know, let's not just absorb this money into the system for five years and then come out of it with almost nothing to show for it. The same problem. That's really, it let's really take this gift. That's been, that's been given to the state and, and make sure that, you know, the legislature understands that we need their support on this, their financial support on this, that the plan is going to reduce costs in the future.
And it's, this is a one-time fix a one time chance to really fix, you know, modernizing basically two of the ACS and then looking at two main liners coming on. Huge, really huge. So we've all got, again, just a ton of homework to continue to keep doing, and we will do that. And again, if you have questions about the topics that we're looking for, you see on the screen for the next two meetings, please get your questions or, or concerns or ideas into Catherine as soon as possible so that we can get that information before us. And I do see Paul has his hand up.
Yeah, I'm thinking we have a public input on Hyder and I would like to get the brain highways to give us a list of pros and cons. So we can kind of look at that a little further and, and, and not ignore the public input. I think that's, I think that's great, Paul. I, I read too. I wasn't sure really where that needed to go, but somewhere along the line we have that have to have that conversation about prince Rupert and, and does hide her now all these years later as it is it different. So I would agree that would be very helpful to get kind of an, an analysis of, of the two ports.
And that could be at either of the meetings. That's up to the schedule of you know, of the staff. Catherine, is there anything else you need from us? I think the sixth grade we'll put down a couple of agendas for both meetings and then circulate them this week. And let's see if we can kind of get consensus and have enough time to talk about the most critical topics as you move into your imperfect. Okay. Thank you, right? Yes. No one has anything else. Again, thanks to Katherine and to Matt and to your account and follow me. We appreciate your time and we'll see you all on zoom. And hopefully I won't be in a hotel in Kodiak with terrible internet at the next meeting. So thank you. Just the internet right here. So it might entertain a motion to adjourn. Okay. Without objection, we are, we are adjourned at 3 49. Thank you.