Unless new sources of revenue can be found to carry on this vital function the situation will become critical.

The alternatives

Of the various alternatives examined, only three were found to warrant detailed analysis. They are:

1. Utilize new or proposed new sources of federal revenue sharing and grant moneys or revitalize the existing Economic Development Administration Program.

2. The State assume the past role of EDA through a program of cost sharing grants and loans.

3. The municipalities pay for the needed improvements through bonds, special taxes, etc.

Analysis of alternatives

Federal.-Among the new programs proposed by the President to replace planned funding cutbacks is Special Revenue Sharing for Urban Community Development (Better Communities Act). The extent to which grant allocations from this program would be made available for port development in Alaska is unknown at this time. However, a preliminary analysis of available information leads to the conclusion that emphasis will be shifted from physical to social requirements. It is expected that funding will begin in fiscal year 1975.

The Rural Development Act of 1972 will, together with other numerous provisions, provide loans and grants to public bodies for measures designed to facilitate development of private business and industrial enterprises. There is some doubt that municipal port facilities will qualify for such moneys. Unfunded in its first year, activity has been accurately described as "slowly unfolding" and what to anticipate in the way of funding and impact on Alaska is not much better known today than it was when the Act became law. The comments applicable to Special Revenue Sharing and the proposed Better Communities Act apply here also.

State.-Alaska is currently undergoing restrictive fiscal adjustments due to delays in the construction of the trans-Alaska oil pipeline. Undertaking a completely new program of port development would constitute an additional financial burden on the State and must be considered as an unacceptable alternative. This administration is currently considering the use of general obligation bonds as a means of assisting the communities in completing locally sponsored port projects. These funds could be used to assist local governments in financing the non-federal share of federally funded Port Development Projects.

Local government.-Most Alaskan municipalities are hard pressed to meet the expanding demand for streets, sewers, utilities and other basic community needs and in many cases are already overtaxing their fiscal capacity. While this alternate may be possible for some of the larger cities it is beyond the capability of the smaller communities and villages. To most of these smaller coastal cities a port is vital to their existence since they look to the sea as primary factor in their basic economic development. For these communities to delay harbor improvements until more prosperous times would be entirely impractical since the very port that they are trying to develop will probably be one of the major municipal improvements that would contribute to their economic stability.

Summary-conclusions-recommendation

Alaska's ports play an important role in the social and economic well being of the State and the Nation. Existing inadequate facilities and the attendant inefficiencies result in transportation costs higher than necessary creating an almost unbearable burden on many of the State's residents. Many communities desire and need port facilities but lack the ability to fund these improvements.

Past sources of federal financial assistance are disappearing and the outlook for their restoration is questionable.

1. It is recommended that the Federal Government undertake a comprehensive analysis of the existing EDA program with the goal of extending funding until such time that a viable alternative can be initiated. It is further recommended that the funding structure of EDA, or its replacement program, be reviewed with special attention directed toward less restrictive requirements for grants to the smaller communities where intangible benefits are dominant. In lieu of such a study it is recommended that special legislation, similar to the Appalachian Regional Development Act, for rural areas of Alaska be given careful consideration.

2. Because of the nationwide significance of waterborne commerce, major port facility improvements must be considered the responsibility of both the State and Federal Governments as well as the local communities. Greater emphasis must therefore be directed toward the development of comprehensive plan of deep draft ports in Alaska. It is recommended that Congress appropriate the required funds so that a statewide port study can be initiated at the earliest possible time.

3. If the program for the development of small boat harbors for light draft vessels is to have a significant effect on statewide needs it must be based on a regional or area wide plan. It is recommended that the appropriate Federal and State Government Agencies, through a coordinated effort, undertake a comprehensive study of small boat harbor needs in Alaska.

The study necessary for the formation of a comprehensive plan for the development of small boat harbor improvements could be based on the 1967 "Report on Survey of the Coast of the Hawaiian Island, Harbors for Light Draft Vessels" prepared by the Corps of Engineers. Work undertaken during this study included updating and analysis of boat population and distribution, field inventory of existing facilities, hydrographic and topographic surveys, subsurface explorations, property ownership, accessibility and local economic activity studies, potential benefit/cost analysis, and tide, wave and weather studies.

Because of the varied, and often spectacular, physical features of Alaska, such a study must necessarily be wider in scope. Such factors as problems related to sea-ice and permafrost, availability of construction materials, and harbor maintenance techniques must also be considered. While not intended to be limiting, the above study factors give an indication of the magnitude of research required in the study of shallow draft navigation needs in Alaska leading to a plan for a logical system of future shallow draft harbor development.

4. It is recommended that special consideration be given to revision of the current policy on federal small boat harbor projects as it pertains to dredged berthing basins. It appears that the policy as currently prescribed by the Corps of Engineers has been adopted for recreational boat harbors, not harbors that are primarily commercially oriented. It is submitted that the berthing basin features of the small boat harbor projects at Metlakatla, Hoonah, Sand Point, Anchorage and Kenai as well as others which will eventually be referred to your committee for authorization and funding, are primarily commercially oriented and therefore should not be considered a local self liquidating responsibility. Appendix "A" lists Federal Small Boat Harbor projects that are currently under investigation by the Corps of Engineers or have already been authorized by Congress for construction. Particular emphasis is placed upon the need for funding of the Sand Point, Kake, Hoonah, Metlakatla and Kodiak small boat harbors. Although not necessarily calling for direct authorization by Congress it is recommended that speedy action be taken by the District Engineer in completing studies and securing funding for Section 107 projects at Wrangell, Haines and Unalaska. Appendix "A" also lists those "individual communities in Alaska where the need for port facility improvements is considered especially critical."

ALASKA MARINE HIGHWAY

Growth of the marine highway system

As the state grows and develops, so too, does the demand for service, placed upon the Marine Highway System. Since the system's beginning in 1963, demand for service has increased at a rate of roughly 10% annually in Southeastern Alaska. Due to routine changes, the 1964 earthquake and the addition of a new vessel 5 years ago, meaningful growth comparisons are difficult to estimate for the Southwestern System. The demand for service on one portion of the Southwestern System has increased so rapidly that the vessel serving this segment has operated at full capacity each summer. Other portions have experienced growth of less than five percent per year. This increase demanded additional capacity, which was supplied by lengthening the TUSTUMENA.

Compounding the problems created by normal traffic growth, is the extreme fluctuation between summer and winter traffic demands. Systemwide, the summer usage exceeds 200 percent of the average annual usage. The variation would be even greater if the vessels were capable of carrying additional vehicles during peak periods. This peak period traffic is largely composed of out-of-state vacationers. Vehicle license plate tabulations indicate an out of state usage of just under 45% of the annual Marine Highway traffic. The vast majority of this out

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of state traffic occurs during July and August and accounts for the capacity loadings during these months. This is not a problem unique to Alaska, many states experience excess demand for recreation associated facilities during the vacation periods. What is rather unusual however, is that in this case the summer reccreation facility is also one of Alaska's major transportation links; its Marine Highway!

When considering the feasibility of increasing the system capacity to meet increased demands, it is first necessary to determine who is being served and to what extent. To expend state funds for the benefit of vacationing out of state travelers would appear less than desirable, yet the summer glut of passengers and vehicles currently experienced, hinders the movement of goods and the provision of services necessary to the coastal communities served by the system. The solution must provide a compromise. Expansion, either by increasing capacity or initiating service over new routes, must consider and take advantage of this unique situation. A route, which provides service to the coastal communities and also provides an attraction to out of state visitors, is necessary if a balance between service and subsidy is to be maintained.

Vessel design and construction problems

Designing vessels for service in Alaska also presents problems which, although not unique, are complex and create additional construction expenses. The sparse population, long distance between ports, multiple port routes and use of camper type vehicles present individual design problems and collectively present others. Two crew manning of the major vessels by personnel residing in several communities is one example.

Normally, one envisions a "Ferry" as a rather clumsy looking, slow moving boat, jammed with passengers all embarking and disembarking at the same time and walking to their destinations after a 15 minute trip. This type of operation is relatively simple, operating costs low and vessel design and construction not too complex nor costly. This bears no resemblance to the Alaska Marine Highway. The Marine Highway is vehicle oriented. Roughly 80% of the passengers carried are accompanied by a vehicle. Well over half of these vehicles are large campers or camp trailers during the peak season. The size of these vehicles alone require excess vertical clearance, which makes double car decks quite expensive.

The average distance between ports in Alaska exceeds 100 miles. Coupled with the multiple port routes this often means travelers are on board for more than a day. Sleeping accommodations, restroom and bathing facilities are demanded by the system users, creating higher construction and operating expenses. The current emphasis on environmental considerations has presented a number of problems which have not been completely solved at this time. Garbage compactors on board ship eliminate the need to dump refuse overboard, however these containers are not the most desirable items to accompany a group of people on extended voyages. An incinerator has been installed on one vessel, and will be another partial solution. Assistance in solving these problems is sorely needed. Although the design of vessels is becoming more complex and thus more costly, the primary concern in Alaska is the rapid rise in basic construction costs. Vessels that cost five million dollars less than a decade ago now cost more than ten million. Statistics concerning the rise in construction costs are readily available and known to most, therefore let it suffice to say that these increases in construction costs have sorely hampered the expansion of the Marine Highway. The recent inclusion of the Marine Highway into the Federal Aid Highway concept is of tremendous benefit to the State. It can aid in the development of an integrated land-sea highway network which was not entirely possible before, since the water portion depended entirely upon the passage of Statehood issues.

Operating problems

The day to day operation of the vessels present additional problems. These can be divided into two general categories. The technical ones, which involve natural obstacles and those that are man made.

In the first category we find navigational needs. Foremost is the need for further improvement of Sergius and Whitestone Narrows, on the route to Sitka. At present our vessels are forced to wait for slack water before negotiating this treacherous stretch. As we add vessels to the system this problem will compound itself. The Corps of Engineers has scheduled improvements for these areas and we believe these projects to be of the utmost importance. The system is now de

signing and modifying ships of maximum capacity consistent with maintaining a safety margin in handling the vessels in these constricted passages.

Wrangell Narrows, although not so critical as Sergius, is also a rather hazardous stretch of water, that must be negotiated, when approaching Petersburg from the South. Any improvement in this area would be direct assistance.

Portions of Alaska's waterways are, as yet, uncharted. This has created occasional problems in the past, and as the expansion of the system takes place the need for adequate data will be of increasing importance.

The second general area of concern to the Marine Highway System includes the various obstacles created by humans in their attempts at proper control. Customs procedures, pilotage requirements, and Coast Guard regulations, to name a few, are examples. Currently there are two conditions which we wish to expand upon at this time, as they are very important to all Alaskans.

The first, the inclusion of the Marine Highway into the Federal Aid to Highways Act, is a major step forward for this state. There are however, restrictions which, when applied to Alaska prohibit the most effective use of this vehicle. The Marine Highway connects isolated communities with the land highway network. To do this it is necessary to traverse international or foreign waters. It is even necessary to dock in a foreign country, Canada. Since the Canadian port involved, Prince Rupert, provides the only connecting highway within roughly 450 miles, the necessity of including this port is obvious. The Federal-Aid to Highways Act of 1970 prohibits the use of Federal funds for vessels that operate to foreign ports or in international waters.

This greatly hampers Alaska's efforts to provide an integrated transportation system, since the system must enter foreign waters. The Marine Highway has many points in common with an airline, which must fly over foreign soil during a portion of its scheduled operation. The funds expended for construction and operation of the aircraft are in no way connected with the "foreign" air through which it passes, why then must it be necessary to prohibit federally funded vessels from international waters? You cannot let the people off at the international boundary, when you are 15 miles from the nearest port.

The "Jones Act" continues to be of primary concern to Alaskans since it restricts the use of the M. V. WICKERSHAM, by prohibiting the transportation of people and vehicles between American ports. Currently under construction is a vessel which will replace the WICKERSHAM. This vessel is scheduled for delivery in approximately 6 months. At that time, the WICKERSHAM will be sold, due to the Jones Act restrictions which will again be invoked. Conclusions and recommendations

The Marine Highway continues to face many problems as outlined earlier. All can be solved in time, if addressed properly. The following are considered to be the most important as well as requiring a maximum of cooperation and assist

ance.

1. The Marine Highway should continue to be included under the Federal Aid to Highways Act, however modifications to the act are needed which will allow the vessels to operate in international and foreign waters since there are no alternatives for Alaskans. It would also be of benefit to establish provisions under this act whereby capital improvements to existing facilities and vessels could be made with federal participation, similar to the Department of Highways special funding program.

2. Assistance is needed in the area of shipboard pollution control. Federal funds for installation of devices as well as federal funded research and development programs aimed at the maritime industry are both worthwhile objectives. At this period of history, anti-pollution legislation and public opinion are ahead of the technology necessary to eliminate the problem. This is creating a very real problem for all ship operations. Hydrographic data must continue to be gathered and charts provided for the uncharted areas of Alaska. Areas which are hazardous to navigation must be improved and marked. Sergius and Whitestone Narrows are scheduled for improvement by the Corps and this project is extremely important to the operation of the Marine Highway and to all Alaskans.

You will probably note that I have spoken to you today only in general terms of port and harbor needs. As you travel to the various communities on your agenda you will receive more detailed testimony from the individual communities affected. Members of my staff will be in attendance at each of these meetings to help the local government in presenting their case and to answer any questions you may have regarding the State's program in these specific cases. This concludes my testimony Mr. Chairman.

APPENDIX "A"

CURRENTLY AUTHORIZED CORPS OF ENGINEERS NAVIGATION PROJECTS

Most of the projects listed below will have a direct impact on the planning and funding of the State Water and Harbors program, but are not necessarily listed in order of State endorsed priorities.

DEAR SENATOR GRAVEL: Following your discussions in Juneau, Alaska, during the week of 6 August 1973, we have had the opportunity to consider your suggestion of the causeway-bridge combination between Juneau and Douglas. Your suggestion raised the possibility that such a structure could be of benefit to navigation in Gastineau Channel.

Tidal flows enter and exit from both the western and eastern ends of Gastineau Channel. The nodal point, where the tidal flows meet, varies somewhat but is generally in the vicinity of Sunny Point. Sediments carried into the area by tributary streams are not moved out and over a period of time have formed the existing shoal. An obstruction to the eastern tidal flows, via a restricted opening in a causeway, would not be expected to greatly alter the tidal conditions in the Gastineau Channel project area. The nodal point would probably move east toward the causeway, but the net tidal exchange in the project area should vary only slightly. Near normal tide ranges would continue to occur with greater flow occurring to and from the western end of the shoal area. Head differentials and appreciable tidal currents would probably occur at the causeway opening throughout most of the tide cycle. A negative influence on navigation would probably result at this location.

The effect on shoaling patterns in Gastineau Channel are difficult to predict without extensive study, including evaluations by model. Unfortunately, the model developed for our on-going survey study has already been destroyed to make space for another model. However, we seriously doubt significant benefits to our project would be obtained due to the causeway-bridge concept and do not recommend additional detailed investigations at this time. If any revision of the existing project should be authorized as a result of our survey investigation, subsequent detailed design studies would include additional model studies which would provide a chance to further evaluate the effects of the concept.

My appreciation is expressed both for your suggestion and your continuing interest in our civil works mission in Alaska.

Sincerely yours,

CHARLES A. DEBELIUS,

Colonel, Corps of Engineers, District Engineer. Senator GRAVEL. Chairman Bob Crow of the water resources board out of Anchorage is our next witness.