DOT asks for two more fast ferries

Posted: Tuesday, February 27, 2001

The Knowles administration formally proposed two more fast ferries for Southeast this morning, targeting federal transportation money that could be used to repay bonds.

The $70 million price tag for the ferries - which would link Juneau with Petersburg and Ketchikan with a new terminal on South Mitkof Island by 2006 - is part of a $425 million package for transportation projects throughout the state.

The projects all could be completed within five to six years, Transportation Commissioner Joseph Perkins said at a Capitol news conference.

The fast ferry concept is intended to lower state-funded operational costs for the Alaska Marine Highway System through capital purchases made with federal funds. The new ferries are being designed to carry 250 passengers and the equivalent of 35 sport utility vehicles at a speed of 32 knots, about twice as fast as the current fleet. The faster travel would allow them to be day boat operations, saving on overnight crew costs.

Bids for construction of the first fast ferry, a Juneau-Sitka operation scheduled for 2003, are to be opened March 21.

But legislative support for the idea is unclear, particularly after a House subcommittee this week refused to increase operational funds for the existing system.

The subcommittee's recommendation is to use the current operating subsidy of $27.9 million a year in the next fiscal year, which begins July 1. That's a $1.2 million cut in the request by Gov. Tony Knowles, according to transportation and budget officials.

The department is still working out the impact if it should be approved, but the tentative estimate is that the equivalent of seven weeks of service by one ferry could be lost, said Kurt Parkan, a senior * DOT official. That might mean, for example, a late start in the Malaspina summer day boat operation in the Upper Lynn Canal, he said.

Southeast legislators were concerned by the subcommittee's decision Monday.

"I'm amazed that they wouldn't blink an eye," said Rep. Al Kookesh, an Angoon Democrat. "I don't think anybody was expecting them to do that."

"That marine highway is a vital transportation link for all of us in Southeast," said Rep. Peggy Wilson, a Wrangell Republican. "It is also a vital link for economic development."

Chairmen of the subcommittee and the full House Finance Committee couldn't be reached for comment this morning.

Perkins held out hope that the funds could be restored. The "intent language" in the subcommittee report invited the administration to revisit the funding in a supplemental budget request next year, in case fuel prices end up being as high as the department projects, he said.

In the meantime, the reluctance of legislators to fully fund the existing ferry system shows that it's wise to lower operating costs through the fast ferry concept, Perkins said. With interest earnings on the "grant anticipation bonds" covering the state's match, "This is not going to cost the state one penny in general funds."

Perkins said that the Legislature could get the $425 million in projects going this year. That was a change from comments by Knowles in an interview with the Empire in December, in which he said general obligation bonds would have to be used, requiring a vote at the polls in November 2002.

Neil Slotnick, deputy commissioner of revenue, said state officials are now convinced they don't have to pledge the "full faith and credit" of the state to back the bonds, which would require the vote. Instead, Wall Street will offer adequate terms even if the bonds are pledged "subject to appropriations," Slotnick said.

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