CHAPTER 5 REVIEW OF DOT&PF SHORT-TERM ALTERNATIVES FOR THE ALASKA MARINE HIGHWAY SYSTEM 5.1 BACKGROUND In October 2007 the Alaska Marine Highway management team under a request from the Alaska Office of Management and Budget (OMB) to reduce operating cost of the System, prepared a ShortTerm Operating Alternative Analysis. The entire Alternative Analysis is attached as a Appendix-B. The Alternative Analysis was predicated on the premise that AMHS service provided for Fiscal Year 2008 would be duplicated for Fiscal Year 2009 plus an additional $9.6 in FY 09 for ship Capital Improvement Projects (CIP). Ten operating alternatives were examined. Alternatives 2-8 were progressive cuts in services relative to Alternative 1 which was the then current Full Service Model. Alternatives 9 and 10 were discrete and non-cumulative. This Short-Term Alternative Analysis was conducted prior to the commencement of this Systems Analysis. Costs included in the Short-Term Alternative Analysis were current operating costs and current capital improvement costs and did not include full life-cycle costs (uniform annual equivalent of all capital costs plus all operating costs). It should be noted that the costs included in the ShortTerm Alternative Analysis included costs assumptions for labor that were based on IBU contract rates that had expired on June 30, 2007 since new contract rates had not yet been negotiated. For each of the Options, a tabulation of an FY09 Operating Budget, Ports of Call Summary, Fixed Cost Summary, and Operating Plan (Service Schedule) was prepared. In addition a short summary of the Pros and Cons of the Service Implications was tabulated (See Chapter 5 Appendix). These fulfilled the OMB request to examine alternatives to reduced the General Fund subsidy of the AMHS and demonstrate what the effective of such reductions would have on Ports-of-Call and service.
5.2 SUMMARY OF SHORT-TERM ALTERNATIVES The following is a list of the Short-Term Alternatives including a summary of the service reductions for each: Option 1 - Full Service Model with all boats running all the time Option 2 – Draft budget presented to OMB
Alaska Marine Highway System Analysis
Alaska University Transportation Center • Page 75