Southeast

Alaska’s Marine Highway System is asking the Legislature to budget $22 million for new fast ferry engines. But it may not use the money if a lawsuit against the shipbuilder succeeds.

Engines on the Fairweather and Chenega have shown signs of excessive wear that could stop them from sailing within a few years. State officials tried to negotiate a solution, and then filed suit.

They also asked the court for a preliminary injunction forcing the builders to provide replacements soon. That’s because the engines could wear out before the issue goes before a jury.

Ferry chief Mike Neussl says experts check the engines on a regular basis.

“The Fairweather just underwent an inspection and was granted authority for another year. So we are good through the summer of 2012 operating season on Fairweather’s engines,” Neussl says.

The Chenega will be inspected in January and its engine cylinders could be bored out to remove damage. But little more can be done for the Fairweather’s power system.

The $22 million would replace one ship’s engines. It is part of the Governor Sean Parnell’s capital budget request for the fiscal year starting in July.

Neussl says it would not be a direct appropriation of state money.

“Those are federal receipts. That’s really seeking authority from the Legislature to be able to use federal funds to replace fast ferry engines, should that become necessary,” he says.

He says replacement engines would likely come from the company that built the current set. That’s because few choices are available.

“They have safely powered the ship, moved a lot of people and moved a lot of vehicles. It’s just a longevity issue and the ability for them to last as long as the ships last. That’s really the heart of the issue here,” he says.

It’s not known when the judge will rule on the preliminary injunction against shipbuilder, Derecktor Shipyards, and the subcontractors that built the engines

The fast ferries each carry up to 250 passengers and 36 vehicles. The Fairweather was built in 2004 and the Chenega in 2005.

The Alaska Marine Highway System is making it easier for horse-owners to travel with their animals.

Equestrians earlier this year complained that a $1,000-per-animal deposit was excessive. The money covered the cost of cleaning up any waste that ended up on the car deck.

Ferry Chief Mike Neussl says the new policy reduces the deposit to $500. It also covers multiple animals being transported together.

Neussl says horse-owners can put the deposit on a credit card, which will not be charged unless there’s a problem.

“We don’t actually have to collect the money. If fact, we would prefer to not to actually collect the money, only to have to give it back. Hopefully there won’t be any need to retain it. Hopefully there won’t be any need for a clean-up. But we need those assurances that we have access to the clean-up funds if we need them,” Neussl says.

Horse-owners said the $1,000-per-animal deposit kept youth groups from traveling to horse shows and competitions.

Some equestrians also asked to be allowed off the ferry to exercise their horses on voyages to and from Bellingham.

Neussl says owners can already buy a split vehicle-and-trailer ticket for those trips. That way, they can drive off, let their horses out for a while, and then reboard.

“The difference in fares between Juneau-Bellingham direct versus Juneau to Ketchikan and Ketchikan and Bellingham is only $1 per linear foot of vehicle. So if you have a 35-foot truck-and-trailer combination it would be $35 extra dollars to do that double-ticketing,” he says.

He says the deposit is a recent addition to ferry rules. It was added because new federal regulations prohibit washing anything off the deck into the ocean.

The changes were presented at last week’s Marine Transportation Advisory Board meeting.

Governor Sean Parnell’s capital budget proposes improving eight Southeast boat harbors and making plans for another one. Link to the full capital budget, listed by community.

About $16 million is divided among Sitka, Petersburg, Juneau, Haines, Hoonah, Hydaburg, Port Alexander and Skagway. Saxman also has money for planning and design.

“I’m not sure if he referenced it this way, but it’s the fishermen’s roads to resources. I know in talking to them that that was a concern,” says Haines Representative Bill Thomas, who co-chairs the House Finance Committee.

He says it’s good news for the region’s fishermen and other boat-owners. Wrangell Representative Peggy Wilson agrees.

“These harbors have needed repairs for some time and it’s hard for the communities to have enough money to do it. This harbor grant fund is 50-50, so the community has to have 50 percent of the funds and the state matches it,” Wilson says.

One of the largest Southeast appropriations is for the State Library, Archives and Museum building in the capital city. Parnell proposes allocating $20 million toward the $127 million project.

Juneau Senator Dennis Egan says that, plus money already in the bank, is good news.

“That’s going to give us enough money to really start construction on this facility. It’s not just a Juneau facility. It’s a statewide facility, but it surely benefits Juneau,” Egan says.

The budget also proposes transferring $60 million to Alaska Class Ferry construction. The money has already been appropriated, but needs to be moved to a different account. That will make a total of $120 million allocated to the ship, though more may be needed.

Other marine highway items include new fast ferry engines, improvements to the Prince Rupert terminal, and money for maintenance.

The budget includes some money for energy projects. But some lawmakers say it’s not enough.

Sitka Senator Bert Stedman is among those pushing for a transmission line connecting Kake to Petersburg and the southern Southeast power grid. Stedman, who co-chairs the Senate Finance Committee, says it could lower power costs.

“Kake runs their community on diesel and they have a fish-processing plant that runs on

diesel. We all know that diesel electrical generation makes you noncompetitive. And the community residents trying to light their homes and live a reasonable standard of living compared to the rest of the communities in Southeast, it makes it very difficult,” Stedman says.

He and Thomas say they are unhappy Parnell left the powerline out of his spending plan.

Other major projects for Southeast include Ketchikan bridge repairs, Sitka water treatment system improvements, a Yakutat airport perimeter fence and road work in Wrangell and Petersburg.

Parnell’s proposed spending plan is just one step in budget development. Egan, who serves on the Senate Finance Committee, says the projects list will grow.

“We’ve already been talking and we’re going to have some meetings of some legislators and try to go through the budget and figure out what we can do to supplement some of the problems that we face at a local level and try to supplement what the governor’s done,” Egan says.

Parnell says his capital and operating budgets should slow or reduce spending.

Wilson says lawmakers will also look at cuts.

“We have to make sure that what we put in the budget is sustainable. And that’s a difficult thing to do. He worked on it some, but we’ll work some more when we come to Juneau,” Wilson says.

And then there’s other factors. State budgets depend heavily on funds from a variety of federal programs. Thomas expects to see cuts.

“What’s going to happen with the feds, we don’t know. And that may have a major, major impact on what the outcome of final budget is,” Thomas says.

The Legislature begins meeting January 17th.

How do you improve Southeast Alaska’s economy? Business, government, and nonprofit group leaders met in Juneau this week to share and refine ideas at the Southeast Alaska Economic Development Cluster Summit.

The event brought together groups concentrating on forest, ocean and visitor products. It also included a group trying to develop a regional, renewable energy industry.

“The goal is to create viable economic activity in Southeast Alaska and in the Tongass,”

says Ketchikan’s John Sund, who co-chairs the ocean products group.

“The measurement is creating new jobs and at least stopping the population drop in Southeast and creating more private sector investment and private sector business in Southeast Alaska,” he says.

Sund is one of more than 130 people involved in the four cluster groups since they began in 2011.

A cluster is sort of like a committee or task force. It brings together individuals, companies and agencies in the same business and geographic area. Members work on ways to collaborate, as well as develop new products or initiatives. Then they get together at events such as the summit to compare notes and see what they can work on together.

(Read a briefing paper listing economic-development priorities.)

The visitor-industry cluster, for example, has already worked with the Forest Service to increase tour access to Juneau’s Mendenhall Glacier area.

It also wants to spread tourism beyond cruise-line ports.

“There are some communities that are never going to see any ships,” says Juneau marketer Sharon Gaiptman, who co-chairs the visitor products group.

“And so between them and our hubs – Ketchikan and Juneau – it’s about developing itineraries to capture those more independent visitors,” she says.

The forest products group wants to simplify the government’s timber sale process, especially for small mills. It also wants to convince builders to use more regional timber products, and promote waste-wood energy.

Co-chair Wade Zammit, of Ketchikan-based Sealaska Timber Corporation, says it’s been trying to avoid duplication with another recent group.

“We also began making the necessary steps for a formal process of communication with the state Timber Task Force, to make sure that we’re working cooperatively on initiatives and not creating redundancy, but building on what each other is doing,” Zammit says.

The group also wants Alaska’s Congressional delegation to push through legislation designating lands for timber harvest in the region.

But Senators Lisa Murkowski and Mark Begich, speaking from Washington via

videoconference, say that won’t happen anytime soon – or at all. They warned that the Tongass has become as controversial as ANWR, the Arctic National Wildlife Refuge.

“You all need to be pragmatic in your approach there. At this point in time the support, at least with this particular administration, to advance such legislation is probably pretty questionable,” Murkowski says.

The renewable energy group is just getting going, since there’s little industry so far.

Co-chair Brandon Smith, of Juneau’s Alaskan Brewing Company, says it’s looking at tidal, wind, geothermal, biomass and small hydro.

“Big hydroprojects kind of have a lot of their support structure already in place. So we decided to focus on some of the smaller ones that may need a little help in becoming part of this industry,” Smith says.

The renewable energy group asked Begich and Murkowski to find funds to help with research and development.

The senators like the idea of using Southeast as a testing ground. But both say the money won’t come easy.

“I think all of us understand that to be more energy independent in this country, we’re going to have a diverse portfolio. We see some great opportunities but it’s going to be tight because there are the budgets that people go after because they don’t see the results right away,” Begich says.

The ocean product group is focusing on sea otter management, education and training for fishermen and boat owners, and salmon habitat restoration, among other issues.

Wrangell’s Julie Decker co-chairs that group.

“The area where the United States has been strong has been innovation and that’s sort of our key area where we can still have a competitive advantage,” Decker says.

The summit was not the end of the cluster groups’ work. They will continue refining their ideas and choosing which ones to push the most.

The event, and the larger effort, were organized by the Juneau Economic Development Council. Funding has come from the U.S. Department of Agriculture, which just committed another $100,000 for continued work.

You can watch rebroadcasts of the Southeast Economic Summit on 360 North TV. They will air Saturday, December 17th, from 8 a.m. until 1 p.m., and Tuesday, December 20th, from 1 p.m. until 6 p.m.

Sealaska Corporation and the Organized Village of Kasaan have signed an agreement to allow the village to manage its cultural properties.

It’s the first of many agreements to be made with Southeast tribes to preserve and protect cemetery, shamanic, historic, sacred and archaeological sites within their territory, says Sealaska Board President Albert Kookesh.

Only the regional corporation has title to the lands under the 1971 Alaska Native Claims Settlement Act.

“The only choice we had as a corporation was to select those sites and to protect them ourselves,” Kookesh says. “We’re the only train left at the station. Nobody else has an entitlement in Southeast Alaska among the Native community where they could get title to these sites and protect them.”

Kookesh says the corporation and its board of directors have made a conscientious effort to identify some Sealaska economic lands as cultural sites for protection.

Under the agreement, Kasaan will work with Sealaska Heritage Institute to develop a preservation program and ensure that uses will not compromise historical and cultural integrity of the sites.

Sealaska Heritage President Rosita Worl says the most sacred thing to Native people is their land. She says the agreement will extend to lands in the Kasaan territory yet to be identified.

“It’s not only these particular historic sites, but it will be the yet undiscovered shamanic sites that we know are out there but our ancestors did not want to put on the map,” Worl says. “They did not want to put that on the map because they were fearful that people would come and desecrate those lands.”

The agreement was signed yesterday (Wednesday) by Kookesh, Worl, and Richard Peterson, president of the Organized Village of Kasaan.

Peterson says the Memorandum of Agreement between Sealaska Corporation, the Heritage Institute and Kasaan is very significant to the small tribe, and a testament that tribes and regional corporation can work together.

He says the tribe will be managing land it still uses.

“It’s important to not only mention that these are our ancestral homes, but that we still utilize these areas. Today we are still our own people,” Peterson says. “We live our lives as traditional people we still gather the foods, medicines, resources we need to survive as Haida, Tlingit, as Tshimian.”

Under ANCSA, the only way to put lands in Native ownership is through Sealaska Corporation’s remaining entitlement, or through the federal historical site program, which Worl calls a difficult process that takes years to complete.

The Sealaska Lands legislation currently before Congress includes a portion of Sealaska’s remaining entitlement to be used for cemetery and historical properties.

A Pacific Northwest industry leader says Southeast Alaska’s cluster initiative could create jobs and grow the economy.

Dave Klick of the Northwest Food Processors Association has been active in his region’s cluster efforts.

Cluster groups bring together industry members, government agencies and supporters to

come up with new ways of developing, manufacturing and marketing products. They’re a little like a task force.

Klick says Northwest efforts show cluster groups work.

“We’ve seen 600 jobs in the last four years that were created or saved, improved productivity of $13 million, over $100 million of cost avoidance. And political clout cannot be underscored,” he says.

Klick spoke at today’s Southeast Economic Summit at Juneau’s Centennial Hall, organized by the Juneau Economic Development Council.

The Southeast cluster effort is looking at the region’s visitor, forest and ocean products industries. It’s also looking at how to develop a renewable energy industry.

The summit gives cluster-group members a chance to compare notes and focus their lists of initiatives.