Fear of losing AMHS heightens

Ferry service has large economic impact on Cordova and state

The M/V Aurora makes its way across the Prince William Sound from Cordova to Whittier on Friday, June 22, 2018. (Photo by Emily Mesner/The Cordova Times)

Gov. Mike Dunleavy’s proposed $96 million cut to the Alaska Marine Highway System’s budget is causing palpable unrest in Cordova.

The cut is included in his Fiscal Year 2020 budget and also includes ending service from Kodiak to Unalaska.

For Alaska’s rural coastal communities, the AMHS is a key player in the transport of goods and services and vital to those living off the grid.

Several state transportation employees declined to comment about reports of AMHS agents being told not to make any reservations after Sept. 30. The fall schedule for AMHS is dependent on the AMHS budget approved by legislators.

Even though no firm decisions have been made, many in Cordova feel the need to take action now, in fear of losing the only highway connecting them to the state’s road system.

The ferry issue will come under discussion at a transportation forum during the Cordova Chamber of Commerce’s annual meeting at 5:15 p.m. Feb. 26 at the Cordova Center.

Stress revolving around Cordova’s limited transportation options heightened after Ravn Alaska began limiting and then stopping air service to Cordova, while Alaska Airlines’ freight service was sharply reduced.

“Our state-level budget problems are real, and some form of change and cuts will certainly roll our way when the smoke settles at the end of session,” Cordova Mayor Clay Koplin said. “However, I think for communities like Cordova, it may be better to wait and see how Anchorage, Fairbanks, the Kenai Peninsula, who were the Governor’s electoral base, react. I suspect they are going to be impacted at an even deeper level and will help correct course.”

Being off the road system is celebrated among those in town. Still, since the ’60s, Cordova has always had access to the ferry system, which is a critical asset for remote living in the coastal community. This access drove investments into town and helped keep the economy going during the shoulder season in Cordova. Only five of the 33 Alaska communities AMHS serves are connected to the road system.

Yvette Galbraith laughs after winning the second game of Rummy against Emily Mortensen during their ferry ride to Whittier, AK on the M/V Aurora on Friday, June 22, 2018. (Photo by Emily Mesner/The Cordova Times)

Sylvia Lange, co-owner of the Reluctant Fisherman Inn, with her husband Greg Meyer, purchased the hotel in 2004 with knowledge that AMHS’s fast ferry catamaran, FVF Chenega, would be serving Cordova.

“It was … a very big player in our business plan,” Lange said. “Because we were getting out of (the) king crab fishery, we invested in the hotel.”

More than 10 years later, with 14-hour days and a box truck, Lange and Meyer have managed to operate during the winter months, even as seasonal businesses close and income dwindles.

“When the Chenega showed up, we thought for the first time we had entered the 21st century,” Lange said.

Once access to the road system from Whittier became a viable option in 2005, “we started commuting to Anchorage,” she said. “We started bringing our own freight in.”

According to an economic impact study on the AMHS prepared by the McDowell Group in January 2016, the ferries transported 21,292 container vans, vehicles without drivers and RVs, combined, in 2014.

Meyer estimates that without the ferry, their freight costs would increase to well over $50,000.

About two or three years ago, Lange and Meyer hired an architect and engineer to add 10 additional rooms to the hotel, but when the FVF Chenega was pulled out of service for Prince William Sound that forced cancellation of the expansion, Lange said.

Lange said they spent $60,000 on plans before determining that the cost of building, without a visitor increase that the ferry would bring, would not be feasible.

“I believe in all the things that government can provide that I cannot,” Lange said. “Basic infrastructure is one of those things.”

Cordova’s multi-million-dollar Cordova Center, featuring a 200-seat theatre, community library, historical museum, multipurpose community rooms and more, opened five years ago.

“When they designed that building … the capacities and everything was built around the idea of the ferry’s capacity,” said Cathy Renfeldt, executive director of the Cordova Chamber of Commerce.

During the annual Great Alaska Sportsman Show in Anchorage, she is frequently asked at her booth about how to get to Cordova.

“When I have to tell them, ‘No, there’s no fast ferry’ or ‘the ferry’s limited service,’ or if I have to tell them this year when I go in April that it’s uncertain whether there’s gonna be ferry service to Cordova, I guarantee there’s going to be an impact on tourism,” she said.

Cordova’s struggles are not unique.

According to Frank Schiro, executive director at the Chamber of Commerce in Kodiak, hard times would be faced for the island of roughly 6,000.

“… First of all, we realize it is just a proposal, but should it go forward, I couldn’t use any other word but devastating …,” Schiro said, speaking personally.

Last week, AMHS announced the cancellation of the M/V Aurora’s February sailings due to a maintenance issue that will keep the Aurora docked at the Seward Shipyard for 21 days before returning for its scheduled sailing on March 1.

Last year and into the new year, sporting and academic events were often rescheduled or cancelled due to ferry schedule changes and interruptions. This resulted in increased costs for travel, missed and reduced opportunities for students and visiting schools, and contributed to low morale, said Cordova Jr./Sr. High School principal Kate Williams.

The proposed budget cuts also put cultural trips and access to medical care on the line.

“Native Village of Eyak deploys our research programs via Valdez, our Native Youth Olympics, elder trips, members who go to Anchorage for medical, our ability to recruit using access to a large city; all will be affected,” NVE executive director Kerin Kramer said.

Not just rural communities, but the overall state economy benefits from the ferry system.

The McDowell Group’s study also found that the state of Alaska’s General Fund investment of $117 million in the ferry system in 2014 resulted in a total return on investment of $273 million, a return of more than 2-to-1.

In addition, they found that two-thirds of AMHS passengers are Alaska residents. Among the top 10 number of AMHS trips booked by community of residence, a significant number came from non-AMHS communities such as Anchorage and Palmer/Wasilla.

The gross dollar contribution of the AMHS to Anchorage’s economy, where shopping, medical services, professional services, construction and state projects and tourism traffic uses the system to travel from rural Alaska to Anchorage, is much greater than in Cordova, Koplin said.

Kramer said concerned individuals can contact their representatives in the legislature.

Mike Anderson and Sylvia Lange have been active with the AMHS reform committee which, with the Southeast Conference, is pursing legislation they hope will transition the AMHS into a public corporation.

The goal is to get away from the politics of it, with new administration coming in, everything getting changed and then local effort getting wiped out, Anderson said.

“Most recently, Mike (Anderson) and Sylvia (Lange) have been our conduit on the AMHS reform committee, with occasional letters or resolutions to support their effort,” Koplin said. “I call frequently to get the latest bad news with no real solutions to address our declining service.”