HS Reform Project ategic Business and Operational Plan. Update: September 201

Transcription

1 HS Reform Project ategic Business and Operational Plan Update: September 201

2 roject Purpose reate a strategic plan for AMHS To provide financially sustainable ferry service that meets the needs of Alaskans wo-phase project Phase 1: Mission, Goals, and Governance RecommendaGons Phase 2: Strategic OperaGonal and Business Plan

3 roject Team outheast Conference ontractors EllioL Bay Design Group McDowell Group KPFF Engineering Consultants tatewide Steering CommiLee ffices of the Governor and ieutenant Governor

4 hase 1 Scope of Work tatewide Summit takeholder interviews ase studies of other ferry systems ission statement refinement nalysis of alternagve governance models ecommend governance model for AMHS

5 Phase 2 Scope of Work Define long-term operagng strategy Task 1 - Revenue Analysis Task 2 - OperaGons Analysis Task 3 - OperaGons Financial Model Task 4 - Structure and Benefit of Public CorporaGon Task 5 - Public and Stakeholder Engagement Three tasks not funded Household and Business Survey Capital Needs Assessment TransiGon Plan

6 sk 1 Revenue Analysis engfy mix of public funding and ther revenues for sustainability onsider possible changes to tariff ates and structure onsider potengal partnerships with rivate, Tribal, municipal, and other ngges

7 evenue Findings MHS generates $50 million in annual peragng revenue ellingham service is an essengal source f revenue (44% of total) Bellingham in the top 6 revenue port pairs on-resident travel accounts for 42% of peragng revenue est opportunity for revenue growth is rough forward funding

8 evenue Findings 89 million in GF support in FY17 Down 28% from FY13 ($35 million cut) MHS will always rely on public funds to rovide safe and reliable transportagon ransigon to a public corporagon will ot endanger revenue flows from deral government rice ElasGcity - Reduced fares are not kely to produce sufficient new demand compensate for loss of revenue

9 sk 2 - Operations Analysis engfy basic marine transportagon eeds for Alaskans xamine current system operagons o idengfy strengths, weaknesses, nd constraints

10 perations Findings Complex System 9 OperaGonal Vessels 36 Ports of Call (37 Terminals) Variable service schedules Aging Fleet Terminal/Vessel compagbility Service areas Terminal weight restricgons Traffic requirements Residents, communiges, and businesses require reliable, consistent service 10

11 perations Findings trengths Dedicated personnel at all levels Vital service to communiges eaknesses Lack of funding certainty for planning, scheduling, and market development Aging fleet with increasing and unexpected service losses Management - labor alignment

12 sk 3 - Operations Financial Model evelop representagve model to imulate the system and emonstrate relagve impact of roposed/possible changes engfy primary cost drivers

13 perations Financial Findings Shijing to a modern fleet and governance system provides more cost effecgve service There are no scenarios whereby all operagng costs can be recovered through the farebox Bellingham service is required for system viability Primary vessel fleet cost driver Personnel & Travel 54% of system total expenses 69% of operagng expenses Capital improvements & maintenance 13% of system total expenses 16% of operagng expenses Fuel 10% of system total expenses 14% of operagng expenses 13

14 sk 4 - Corporate Structure and enefits bjec&ve: Describe a governance tructure that best empowers anagement team to operate AMHS conomically and meet users needs

15 overnance - Findings Convert AMHS to a public corporagon Maintains exisgng benefits Intradepartmental coordinagon Public purpose Access to federal funding Access to shared services DOTPF Dept. of AdministraGon Dept. of Law Addresses exisgng limitagons Frequent turnover in senior leadership Indirect labor negogagons Short-term planning horizon PoliGcal influence over operagonal decisions AddiGonal benefits Align labor and management interests Reduce labor costs strategically Incorporate expergse of board members Operate in more business-like manner 15

16 sk 5 - Public and Stakeholder gagement bjec&ve: Guide a process to share formagon and gather essengal input Public Engagement Plan Steering CommiLee and Sub-CommiLee input Key stakeholder engagement Residents, employees, community/business leaders, riders Develop and maintain new project website Public meegngs Media outreach

17 takeholder Findings Public confirmed that AMHS is vital to community economic well-being Many suggesgons for generagng operagng revenues and controlling costs ConGnued outreach is essengal Inform Alaskans about the statewide benefits of AMHS Educate and engage key stakeholders 17

18 roject Steering Committee hair: Dennis Watson - Craig ave Kensinger - Petersburg reg Wakefield - Anchorage lizabeth Bolling - Ketchikan hannon Adamson - Juneau sh Howes - Anchorage ill Ware - Juneau Sharon Hildebrand - Fairbanks John Whiddon - Kodiak Dan Kelly - Ketchikan Michael Anderson - Cordova Dennis Bousson Skagway Ex-officio Commissioner Luiken Staff: Robert Venables

19 oject Sponsors tinum Top Contributor: Ketchikan Gateway Borough CY CONTRIBUTORS ty & Borough of Juneau ty of Ketchikan ty of Valdez rst Bank aines Borough ate of Alaska ZE SPONSORS st Western Landing Plus ntral Council Tlingit Haida Indian ibes of Alaska ty and Borough of Wrangell ty of Cordova ty of Craig ty of Pelican ty of Thorne Bay ty of Unalaska rdova Chamber eater Sitka Chamber BENEFACTORS Alaska CommiLee City and Borough of Sitka Lynden Inc. SILVER SPONSORS City of Kodiak Ketchikan Marine Industry Council Municipality of Skagway Prince William Sound Economic Development District Vigor, Ketchikan Alaska BRONZE SPONSORS cont. Huna Totem Hyder Community AssociaGon Inter-Island Ferry Authority Madison Lumber & Hardware Marine Engineers Masters Mates and Pilots Union Petersburg Chamber of Commerce Petersburg Economic Development Council Sitka Economic Development AssociaGon Sitka Tribes of Alaska SouthWest Alaska Municipal Conference (SWAMC) Travel Juneau Wrangell ConvenGon and Visitors Bureau