The Alaska Marine Lifeline: Connecting businesses and communities along the coast.

• Author: Anderson, Tasha
• Position: Column

So--the Alaska Marine Highway. Sometimes when I start researching an article, the challenge is finding good sources of information. Is there data available, and is that data public? Who's involved, and will they talk to me? I've accepted the assignment, so if I'm in for weeks of begging and borrowing to get the information I need, that's the game. And then I started making calls about the Alaska Marine Highway System (AMHS), and for the first time in my career as I sit down to write I am at an absolute loss: we have mountains of data, piles of studies, hundreds of voices, passionate communities, involved business leaders, apparently engaged politicians... and yet somehow the AMHS is apparently an unresolved--or unresolvable--problem.

Of course, the current conversation Alaskans are having was spurred by Governor Mike Dunleavy's initial budget proposal for 2020, which would cut funding to the AMHS by 75 percent and essentially end most operations by October.

An Honest Budget Fiscal Year 2020. released by the governor's office, states, The AMHS is heavily subsidized by State of Alaska General Funds; its fare box recovery rate in FY2018 was 33.3 percent. Ridership is trending down; 2018 capacity was 42.6 percent and vehicle capacity was 51.6 percent. The department will work with a marine consultant to investigate options available for moving the AMHS towards privatized service or service provided by public/private partnership, with the intent of reducing the State's financial obligation and/or liability." To summarize: we're losing money on a system fewer people are using.

To the first point, fare box recovery rate is the portion of operating expenses that are met by the fares charged, so in 2018 only a third of the cost of operating the AMHS was directly funded by the people and organizations that utilize ferry services. According to a March article by Mollie Barnes published in the Juneau Empire, the AMHS's recovery rate has hovered between 30 percent and 35 percent from 2007 through 2018.

The Alaska Department of Transportation b Public Facilities (DOT&PF) presented in March the Alaska Marine Highway System (AMHS) Overview, in which it is explained that the governor's budget proposal released in February would end all ferry service from October through June, scale down services in September, and operate the system's currently published schedule in July and August. The total expenditure authorization for the AMHS would be $45 million, and with expected generated revenue of nearly $18 million, the "net deficit" amount is reduced to approximately $27 million, putting fare box recovery at a rate of about 40 percent. Alternative scenarios would provide some service to some ports year-round to varying degrees, with recovery rates ranging from 45 percent to 50 percent and the "net deficit" peaking at $52 million.

Dunleavy has directed the AMHS to hire a marine consultant to examine the ferry system and determine a plan to scale back the state's fiscal obligation. The AMHS issued a request for proposals and received one, which it rejected because it didn't allow sufficient time or budget for the work, AMHS Public Information Officer Aurah Landau told KHNS in March. It's projected to cost up to $250,000, which will be paid for out of the marine highway's budget.

Why, though?

Dave Kensinger, owner of Chelan Produce (a seasonal provider of fresh produce in Petersburg and Sitka), was one of twelve members of the AMHS Reform Statewide Steering Committee, which worked with Southeast Conference, the Office of the Governor and Lieutenant Governor, and contractors Elliott Bay Design Group, McDowell Group, and KPFF Consulting Engineers on the AMHS Reform Project, which published its Strategic Business and Operational Plan in September 2017. Less than two years ago.

"We just got finished with a two-year reform project, which is itself similar to a process from 2003, where we went through and evaluated what other places in the world do: how they're structured and financed," Kensinger says. "People have offered solutions many times, and we don't need another."

That plan, which is certainly available to the governor, created a strategic plan for the AMHS "to provide financially sustainable ferry service that meets the needs of Alaskans." Phase I of the project was to...