2022 Annual Financial Report

ALASKA MARINE HIGHWAY FUND

Annual Financial Report For the fiscal year ended June 30, 2022

2022

Alaska Marine Highway System Fund

ANNUAL FINANCIAL REPORT For the fiscal year ended June 30, 2022

Prepared by: Alaska Marine Highway System, Department of Transportation and Public Facilities

TABLE OF CONTENTS Alaska Marine Highway System Annual Financial Report

For the Fiscal Year Ended June 30, 2022

Page INTRODUCTORY SECTION

1

Letter of Transmittal

2

Alaska Marine Highway Operations Board

3

AMHS Ports of Call

4

Profile of the Fleet

5

Vessel Information

6

FY 2022 Operating Plan

7

Operating Revenue Chart

8

Operating Expenditures Chart

9

FINANCIAL SECTION

11

Statement of Revenues, Expenditures, and Changes in Fund Balance

12

Statement of Actual and Estimated Revenues from Operations

13

Notes to the Financial Statement

14

STATISTICAL SECTION

15

Operating Revenues by Vessel FY 2011 - FY 2022

16

Operating Expenditures by Vessel FY 2011 - FY 2022

17

INTRODUCTORY SECTION

I

1

LETTER OF TRANSMITTAL

ǡ Ǥ Ǥǡ PO Box 112500 Juneau, Alaska 99811-2500 Main: 907.465.3900 dot.alaska.gov

January 10, 2023 Dear Alaska State Legislator: Enclosed is the Alaska Marine Highway System (AMHS) Annual Financial Report for Fiscal Year 2022 (ended June 30, 2022) as required by AS 19.65.070.

During FY2022, AMHS recorded $31.3 million in operating revenues, an increase of $3.4 million from FY2021. Operating expenditures totaled $106.4 million, $10.3 million more than FY2021.

AMHS port calls increased from 3,387 in FY2021 to 3,801 in FY2022. Service weeks provided

by AMHS also increased from 200.3 in FY2021 to 230.0 in FY2022.

The Alaska Marine Highway System is continually finding innovative ways to meet the challenge of providing safe, efficient, reliable, and cost-effective transportation for the traveling public. The system’s customer satisfaction rating remains strong at 91 percent.

FY2022 was a year full of challenges and changes for the Alaska Marine Highway System. We look forward to discussing these with you during the upcoming legislative session.

Sincerely,

Ryan Anderson, P.E. Commissioner

“Keep Alaska Moving through service and infrastructure.”

2

ALASKA MARINE HIGHWAY OPERATIONS BOARD Alaska Marine Highway System

Alaska Marine Highway Operations Board House Bill 63 renamed the Alaska Marine Transportation Advisory Board to the Alaska Marine Highway Operations Board (AMHOB), made amendments to AS 19.65.011 and AS 19.65.110-195 relating to the membership and duties of the AMHOB, and provided an effective date of January 1, 2022. The following are the AMHOB members as of June 30th, 2022:

CHAIR Shirley Marquardt

Public/Speaker (Anchorage)

MEMBERS Alan Austerman Public/Governor (Kodiak)

VICE CHAIR Wanetta Ayers

Cynthia Berns Alaska Native Organizations/Governor (Anchorage)

DOT&PF STAFF SUPPORT Katherine Keith

Rob Carpenter Deputy Commissioner/DOT (Juneau)

Tera Ollila

Larry “Norm” Carson Public/Governor (Pelican)

Public/Speaker (Anchorage)

Change Management Director

Administrative Assistant II

Keith Hillard Union - Current AMHS Captain (Juneau) Paul Johnsen Public/Senate President (Petersburg) Vacant Senate President

3

PORTS OF CALL Alaska Marine Highway System Ports of Call

SOUTHEAST ALASKA

SOUTHWEST ALASKA

Angoon

Akutan

Bellingham, WA

Chenega Bay

Gustavus

Chignik

Haines

Cold Bay

Hoonah

Cordova

Juneau (Auke Bay)

False Pass

Kake

Homer

Ketchikan

King Cove

Metlakatla (Annette Bay)

Kodiak

Pelican

Old Harbor

Petersburg

Ouzinkie

Prince Rupert, BC, Canada

Port Lions

Sitka

Sand Point

Skagway

Seldovia

Tenakee Springs

Tatitlek

Wrangell

Unalaska / Dutch Harbor

Yakutat

Valdez Whittier

4

PROFILE OF THE FLEET Alaska Marine Highway System Profile of the Fleet

M/V Matanuska 408 feet Built 1963

M/V Malaspina 408 feet Built 1963

M/V Lituya 181 feet Built 2004

M/V Columbia 418 feet Built 1974

M/V Tustumena 296 feet Built 1964

M/V Kennicott 382 feet Built 1998

M/V Tazlina 280 feet Built 2019

M/V Hubbard 280 feet Built 2019

M/V LeConte 235 feet Built 1974

M/V Aurora 235 feet Built 1977

5

3,824

Net:

6 16.50 234 48 499 450

Service Speed (kts)

Fuel Use (gph)

Crew Capacity: COI

Passenger Capacity: COI

Passenger Capacity: Booking

83 1,675

Quantity (20 foot vehicles)

Vehicle Capacity: Booking

10

1,960

Vehicle Capacity (lane-ft.)

Van Capacity: Booking

243

Total Berths

1

1 106

-

4 berth ADA

2 berth ADA

79

2 berth

Total Staterooms

-

21

3 berth

10

1,675

83

1,960

234

72

26

-

5

45

450

499

47

270

16.50

8,000

1,253

2,928

3,667

9,121

16-10

5,994

74

408

1963

Malaspina

4 berth

Staterooms

7,200

1,235

Net:

hp @ Service Speed

3,029

Gross:

Domestic Tonnage

9,214

Gross:

International Tonnage

5,569 16-11 5/8

74

Beam (ft)

Loaded Draft (ft-in)

408

Length (ft)

Displacement (L/T)

1963

Year Built

Matanuska

6

680

34

852

60

24

1

-

17

-

6

160

174

38

151

13.30

5,100

898

2,174

1,451

4,529

14-4 1/2

3,081

59

296

1964

Tustumena

660 8

16

33

720

-

-

-

-

-

-

-

225

247

24

188

14.50

4,300

566

1,328

987

3,124

13-8

2,132

57

235

1974

LeConte

2,660

133

3,200

298

104

3

-

56

-

45

499

600

63

397

17.30

14,000

2,683

3,946

4,932

13,009

17-6 1/8

7,684

85

418

1974

Columbia

Alaska Marine Highway System Vessel Information Table

7

660

33

720

-

-

-

-

-

-

-

250

300

24

190

14.50

4,300

453

1,280

987

3,124

13-8

2,132

57

235

1977

Aurora

17

1,560

78

1,700

320

109

-

2

58

-

48

450

499

55

354

16.75

13,200

7,354

9,978

3,790

12,635

17-6

7,504

85

382

1998

Kennicott

2

300

15

360

-

-

-

-

-

-

-

125

149

5

55

11.50

2,000

66

97

227

758

12

647

50

181

2004

Lituya

4

850

53

1,060

-

-

-

-

-

-

-

290

297

14

250

16.50

6,000

2,188

3,217

1,591

5,304

13-11

3016

67

280

2019

Tazlina

4

850

53

1,060

-

-

-

-

-

-

-

290

297

14

250

16.50

6,000

2,188

3,217

1,591

5,304

13-11

3016

67

280

2019

Hubbard

VESSEL INFORMATION TABLE

NOV

7 SW: Southwest

MET: Metlakatla Service

PWS: Prince William Sound

YPR: Prince Rupert

NLC: North Lynn Canal Dayboat

NP: Northern Panhandle Dayboat

Note: Dates represent the first day of the period. Overhaul and refurbishment periods include vessel travel time.

HNS / SGY : Haines / Skagway

BEL - X - Gulf: Bellingham Cross Gulf Southwest

BEL: Bellingham to Skagway

Design & Construction (D&C)

COI

In Transit (IT)

CIP

Layup (LU)

Overhaul (OH)

On Line

Feb 3 NP

Jan 1 Crew Quarters

Dec 20 on or about FED/CIP

Mar 30 OH

Jul 1 Layup

TAZ

Dec 28 LU

Jul 1 Layup

HUB

Aug 24 SW

Aug 4 Break - No Fins

Jan 9 OH

Total Operating Weeks

Southwest Vessels

Feeder Vessels

Mainline Vessels

230.0

29.6

86.1

114.3

May 23 Layup 7.9

0.0

21.7

40.7

Jun 1 FED/CIP 45.4

Jul 1 SW

34.9

0.0

37.1

TUS

Mar 30 NP

JUN

Jul 1 NP

Apr 28 X- GULF

MAY

LEC

Mar17 04OH LU Feb 3 MET Jan

APR

Jul 1 MET

MAR

LIT

Dec 9 PWS

FEB

Jan 31 Bel-Wed

Jan 13 OH

JAN

42.3

Oct 1 OH

DEC

Jul 1 PWS

Oct 2 OH

Oct 1 COI Oct 15 Layup

Oct 15 X- GULF PWS-SC

OCT

AUR

Jul 1 Bel-Wed

MAT

SEP

0.0

Jul 1 Layup

COL

AUG

Operating Weeks

MAL Jul 1 Long Term Layup

Jul 1 X- GULF

KEN

JUL

Alaska Marine Highway System FY 2022 Operating Plan

FY 2022 OPERATING PLAN

OPERATING REVENUES

Alaska Marine Highway System Fund

UNRESTRICTED OPERATING REVENUES For the fiscal year ended June 30, 2022

$31.3 MILLION

Ticket Sales

81.4%

Stateroom Sales

10.1%

Passenger Services Sales

8.4%

Other Unrestricted Revenue

0.1%

8

OPERATING EXPENDITURES

Alaska Marine Highway System Fund

OPERATING EXPENDITURES For the fiscal year ended June 30, 2022

$106.4 MILLION

Marine Vessel Operations

70.3%

Marine Engineering

2.2%

Marine Fuel

13.4%

Support Services

1.8%

Shore Operations

6.7%

Reservations and Marketing

1.4%

Operations Management

3.6%

Overhaul

0.6%

9

10

FINANCIAL SECTION

F

11

STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCE Alaska Marine Highway System Fund Statement of Revenues, Expenditures and Changes in Fund Balance For the Fiscal Year Ended June 30, 2022 (In Thousands)

Revenues: Unrestricted Revenues: Ticket Sales Stateroom Sales Passenger Services Sales Facility Rental Concession Fees Other Unrestricted Revenue Total Unrestricted Revenues

Capitalization $

Restricted Revenues Indirect Cost Recovery Total Revenues Expenditures: Current Operating: Support Services Marine Engineering Overhaul Operations Management Reservations & Marketing Shore Operations Marine Fuel Marine Vessel Operations Total Expenditures Excess (Deficiency) of Revenues and Other Financing Sources Financing Uses from Operating Fund Balance, Beginning of Year Reserves and Year End Adjustments General Fund CRRSAA - Federal Highway Administration CRRSAA - Federal Transit Administration Motor Fuel Tax Fund Balance, End of Year; Undesignated

$

AMHS

Total

- $ -

25,482 $ 3,153 2,629 22 3 19 31,308

25,482 3,153 2,629 22 3 19 31,308

-

615 31,923

615 31,923

-

1,954 2,330 590 3,847 1,484 7,104 14,297 74,810 106,415

1,954 2,330 590 3,847 1,484 7,104 14,297 74,810 106,415

2,630 (2,630) -

(74,492) 7,519 59,002 37,471 1,809

(74,492) 2,630 (2,630) 7,519 59,002 37,471 1,809

- $

31,308 $

31,308

The notes to the financial statement are an integral part of this statement.

12

STATEMENT OF ACTUAL AND ESTIMATED REVENUES Alaska Marine Highway System Fund Statement of Actual and Estimated Revenues Budgetary Basis (In Thousands) Fiscal Year Ended June 30, 2022

Fiscal Year Ending June 30, 2024

Estimated Revenues

Actual Revenues

Actual Over (Under) Estimated

Total Estimated Revenues

Estimated Revenues 12/31/2022

$

$

$

$

$

Restricted Restricted Revenues Indirect Cost Recovery (ICAP) Total Restricted Unrestriced AMHS Fund Ticket Sales Stateroom Sales Passenger Service Sales Facility Rental Concession Fees Other Unrestricted Revenue Total Unrestricted Total Revenues

Fiscal Year Ending June 30, 2023

0 563 563

44,078 5,400 3,887 8 10 12 53,395 $

53,958

$

0 615 615

0 52 52

25,482 3,153 2,629 22 3 19 31,308

(18,596) (2,247) (1,259) 14 (7) 7 (22,087)

31,923

(22,035)

0 628 628

40,773 5,045 4,206 8 10 12 50,054 $

50,682

0 314 314

$

$

25,628

0

625 625

20,631 2,553 2,128 0 0 2 25,313

The notes to the financial statement are an integral part of this statement.

Budgetary Presentation shows all budgeted and actual revenues including budgeted intergovernmental activitiy.

13

Estimated Revenues

40,957 5,068 4,225 16 10 12 50,288 $

50,912

NOTES TO THE FINANCIAL STATEMENT Alaska Marine Highway System Fund Notes to the Financial Statement For the Fiscal Year Ended June 30, 2022

NOTE 1 -

Alaska Marine Highway System Fund The Alaska Marine Highway System Fund was established July 1, 1990. All gross revenues generated from the operation of the Alaska Marine Highway System are accounted for and remitted in accordance with AS 19.65.070 which mandates that the money shall be deposited in the Alaska Marine Highway System Fund.

Marine Highway Capitalization Account The Marine Highway Capitalization account was established within the Alaska Marine Highway System Fund June 30, 2009. Access to this funding was restricted and only occured with approval by the Legislative Budget and Audit Committee. The $2.63 million in this account was swept to the State's General Fund at the end of FY2022.

NOTE 2 -

CIP Program Component The Alaska Marine Highway System budget includes a component which authorizes positions directly related to capital projects. Beginning in FY2001, the salary cost of time charged directly to capital projects is not recorded in the Alaska Marine Highway Fund. The cost of time charged to administration or overhead is recorded in the Alaska Marine Highway Fund.

NOTE 3 -

Fund Transfers In FY2022, $3.62 million was appropriated from the Motor Fuel Tax Fund to the Marine Highway Fund and the authority to use the funds is part of the Alaska Marine Highway System's FY2022 Operating Budget.

NOTE 4 -

Operating Overhaul Overhaul expenditures that are included in the Operating Budget are limited to small maintenance items that arise while the vessels are operating and do not include capital overhaul expenditures. Large vessel overhaul and deferred maintenance items are included in the Capital Budget. In FY2022, $15.0 million was appropriated for the annual Vessel Overhaul and Deferred Maintenance Capital Budget.

NOTE 5 -

COVID-19 Relief Funding In FY2020, the Alaska Marine Highway System (AMHS) was awarded $10.0 million in 5311 Coronavirus Aid, Relief, and Economic Security (CARES) Act funding through the Federal Transit Administration of which $1.45 million was spent in FY2022.

14

STATISTICAL SECTION

S

15

VESSEL Aurora Chenega Columbia Fairweather Hubbard Kennicott Leconte Lituya Malaspina Matanuska Taku Tazlina Tustumena Contract Vessels Non Vessel Revenue TOTAL

16

FY12 1,898 2,889 13,014 1,659 8,151 2,537 822 5,765 9,003 4,001 3,755 12 180 47,697

FY13 2,679 2,221 16,635 1,537 9,195 2,006 774 3,133 9,217 3,839 1,875 2 121 53,684

FY14 2,421 2,358 6,682 1,415 8,425 2,499 769 12,051 7,154 4,789 2,106 207 53,234

FY15 4,059 1,914 11,778 1,684 8,265 854 848 11,036 3,989 5,474 3,828 167 50,877

FY16 2,721 675 7,471 2,049 7,705 3,634 812 11,316 7,192 3,566 16 53,896

FY17 3,228 5,500 2,418 11,198 4,015 1,117 7,481 7,863 2,865 74 47,157

FY18 3,458 10,929 2,516 9,873 4,356 1,069 7,785 4,329 2,981 21 45,759

FY19 3,359 15,060 2,024 11,296 4,587 1,159 8,355 782 4,133 47 47,316

FY20 2,325 6,118 4,193 981 1,067 5,580 2,586 2,504 2,863 3 39 50,804

FY21 783 11,775 3,239 935 8,556 2,374 200 28,257

FY22 2,447 9,964 4,332 991 11,614 324 1,407 186 44 31,308

operations. They are not accounting figures. Therefore, attempts to reconcile the figures with accounting documents may yield small discrepancies.

*These figures are close approximations based on reservations and ticketing information. They may be used to show relative magnitude of different vessel

FY11 2,522 3,428 8,939 1,805 7,154 794 724 10,520 6,100 2,265 3,318 39 89

Alaska Marine Highway System Unrestricted Revenue by Vessel* Fiscal Years 2011 - 2022 (In Thousands)

OPERATING REVENUES BY VESSEL

VESSEL Aurora Chenega Columbia Fairweather Hubbard Kennicott LeConte Lituya Malaspina Matanuska Taku Tazlina Tustumena Vessel Leave All Vessels TOTAL

17

FY12 5,380 8,513 17,292 9,539 17,341 9,807 1,381 11,843 17,390 15,880 10,978 16,605 9,591 151,540

FY13 8,104 8,098 20,380 7,774 21,170 9,533 1,367 8,573 17,669 16,020 6,527 16,695 10,178 152,088

FY14 7,013 7,971 9,706 6,586 16,468 9,915 1,195 16,929 14,644 17,810 9,966 17,234 9,725 145,162

FY15 6,446 6,595 15,757 7,739 15,031 6,677 1,224 15,313 10,683 16,768 10,569 9,006 18,298 140,106

FY16 6,264 3,899 14,312 6,894 17,074 9,087 963 14,794 17,078 3,414 10,884 13,339 7,145 125,147

FY17 7,051 878 13,298 8,248 18,121 9,511 1,065 8,215 15,909 1,261 10,644 13,350 8,347 115,897

FY18 8,569 345 19,131 6,433 20,549 10,374 1,197 12,185 7,729 203 11,316 13,478 11,252 122,759

FY19 8,031 208 20,341 4,944 229 18,270 9,678 1,155 17,006 2,380 2,713 10,986 13,845 12,603 122,389

FY20 3,807 241 8,605 242 1,181 9,121 4,120 1,068 8,377 8,455 5,964 8,372 11,375 9,216 80,145

FY21 3,837 158 4,648 185 1,249 18,186 8,816 1,069 483 13,233 1,903 8,837 9,496 9,471 81,571

FY22 8,238 4,946 837 19,175 9,285 1,292 425 16,130 2,687 7,177 9,690 9,815 89,697

Service Agreements (RSA). Not included are the budget components for Marine Engineering, Operations Management, Reservations and Marketing, and Shore Operations.

* Expenditures by vessel include the following operating components: Marine Vessel Operations, Overhaul, Fuel and unbudgeted AMHS Reimbursable

FY11 8,065 10,146 11,861 7,824 18,022 4,858 1,415 16,147 16,246 8,853 10,068 15,949 10,379 139,833

Alaska Marine Highway System Operating Expenditures by Vessel* Fiscal Years 2011 - 2022 (In Thousands)

OPERATING EXPENDITURES BY VESSEL

Alaska Marine Highway System Fund

FY 2022 ANNUAL FINANCIAL REPORT State of Alaska, Department of Transportation and Public Facilities

Compiled December 15th, 2022