Ferries need $20 million to stay afloat

Record high fuel costs combined with increased labor expenses could bankrupt the state ferry system and halt some vessels by 2006 without help from the Legislature, according to ferry system officials.

• Photos

On Tuesday, Gov. Frank Murkowski's Marine Transportation Advisory Board passed a resolution calling on the Alaska Marine Highway System to request a supplemental appropriation from the Legislature next year for an unspecified amount.

But Gary Cuscia, the Department of Transportation's Southeast Region administrative manager, said it would take up to $20 million to cover the $103 million in estimated 2005 costs.

He said factors that have contributed to the gap include:

• $8.9 million in unanticipated fuel costs.

• $2.8 million in increased worker benefits.

• about $4 million in wage increases.

• $500,000 to move ferry administrators from Juneau to Ketchikan.

• $500,000 to train ferry workers on the fast ferry Chenega.

State ferry director Tom Briggs said the shortfall would require the ferry system to spend the balance of $17.3 million in the state's Marine Highway Fund, which is used to cover annual funding shortages. Without an additional appropriation from the Legislature into the fund, the system will have nothing to fill the gap in 2006, Briggs said.

He said it might require tying up state ships, reducing ferry service and outsourcing some ferry service to the private sector.

"These are extreme conditions right now and it calls for extreme measures," he said.

Dave Kensinger, chairman of the advisory board, said it is difficult for the system to stick to a budget with oil reaching as high as $45 a barrel.

"Any transportation entity in the country right now is struggling with this," he said. "The marine highway system is no exception."

Kensinger said that the Marine Highway Fund was almost completely depleted in 2001, until Rep. Bill Williams, R-Saxman, appropriated about $20 million to the fund.

The announcement of the funding shortfall came just before today's release of the fall/winter/spring ferry schedule. The schedule cuts ferry service completely for Prince William Sound Communities such as Seward and Chenega.

"You've heard today all these communities that want increased service," Kensinger said. "I agree 100 percent with the statement that it's a highway, and it's not designed to pay for itself. But, that stated, we have to balance the amount of money we have available for the services we provide."

Ferry scheduler Chuck VanKirk said the new ferry schedule, which runs from November through February, will operate two ships between Southeast and Bellingham, Wash. - the Malaspina and Matanuska - instead of one in an effort to generate new revenue.

The new schedule also will run the fast ferry Fairweather to Haines and Skagway on Thursday, Saturday and Sunday. The Fairweather will serve Sitka on Monday, Wednesday and Friday. Currently the Fairweather goes to Sitka two days a week and up Lynn Canal five days a week.

A preliminary summer schedule leaves the ferry system with service between Ketchikan and Prince Rupert, B.C., from mid-April through the end of May. VanKirk said by the summer of next year there will be no vessels in the ferry system fleet that are certified to operate in Canadian waters.

• Timothy Inklebarger can be reached at timothy.inklebarger@juneauempire.com.