State ferry system victim of aging vessels, lack of funding

The state ferry Tustumena is preparing for its 60th birthday party this summer.

Over the years, the vessel has become a familiar and important part of life in communities between Homer and Dutch Harbor. But after years in rough waters, the cost of keeping the Tustumena running is ballooning.

"This ship is a floating museum piece," said John Mayer, who has captained the ship for years.

The Tustumena exemplifies the storms that the Alaska Marine Highway System has weathered.

In March, Seward shipyard workers and ferry crew members worked - as they do every year - to keep the ferry seaworthy, despite its age. In the bridge, navigational equipment had been covered in white sheets while windows were replaced with new ones; in the passenger lounge, chairs were removed to allow water that had seeped under the flooring to be cleared; on the car deck, sparks flew as metal pieces were replaced and welded.

Mayer is driven by the communities' appreciation for the ferry he captains.

"In the city of Kodiak, I swear to God, I walk down the street and people are like, 'Thank you for your service!' or honking their horn," said Mayer, who lives in Homer.

Replacing the Tustumena with a new ferry symbolizes for many the importance of federal funding in bringing hope of a sustained transportation network to coastal Alaska.

Talk of replacing the Tustumena has been driven by years of expensive repairs, prolonged overhaul periods and the impacts of extreme weather. Mayer said it costs between $1 million and $2 million per year to keep the Tustumena running. "And it's things that need to get done. It's not superfluous stuff," he said.

But with insufficient money and planning to carry out the replacement, years went by without a new ferry.

"It's a never-ending battle because this is an older ship. A lot of times we experience what's called discovery work, where we'll come into the shipyard knowing what needs to be done, and then in the process of doing that, we'll encounter something else," Mayer said.

That happened in February, when workers encountered more corrosion than they expected. The ferry is still on track to leave the Seward shipyard for service in May, but "when you hit 60 years, you're 30 years past your prime," said Alaska Marine Highway System Director Craig Tornga.

The federal infrastructure bill signed in 2021 is poised to provide the necessary funding to pay for a new ferry to serve Southwest Alaska, with more than $161 million promised so far - as long as the state can provide its own, smaller share of the funds. The state approved spending $21 million of its own money several years ago.

The replacement vessel is expected to cost around $350 million. Sam Dapcevich, a marine highway spokesperson, said the state has so far secured nearly $243 million, counting around $60 million in expected federal formula funds. That leaves more than $107 million needed to fund the project. The state is hoping most - if not all - of the balance can be covered through a federal grant.

As of March, amid months of delays, the Tustumena replacement vessel has yet to go out to bid. The design was changed to include batteries, reflecting a federal requirement for reduced emissions. A bid attempt in 2022 yielded no takers.

Last summer, Tornga said he wanted to select a shipyard by the end of the year. In December, Tornga said he wanted to put out a request for proposals in January. Delays have piled on as Tornga held meetings with several shipyard officials to ensure that unlike in 2022, shipyards would, in fact, bid on the project.

Federal transportation officials must review the state's plans before the replacement can go out to bid, leading to further delays.

Tornga has said that construction of the new ferry could begin this summer, but he estimates that even if all goes as planned, the new vessel won't be complete until 2027.

Alaska U.S. Sen. Lisa Murkowski, who pushed for ferry funding to be included in the 2021 Infrastructure Investment and Jobs Act, said she's discouraged by the slow progress Alaska officials have made on the Tustumena's replacement.

"It's one of the things that I probably worked hardest on and one of the things that I'm most proud that we were able to include in the infrastructure bill, but also one of the things that perhaps I'm most frustrated about," Murkowski said in an interview.

The funding holds promise for increasing ridership by addressing years of deferred maintenance and ship construction, but it is still up to Gov. Mike Dunleavy's administration and state transportation officials to determine when and how that money will be used.

Murkowski has been critical of the state's decisions. Repairs and investments left unmade resulted in decreased reliability, ridership and revenue.

"I've used the term 'death spiral,' and I know the governor doesn't like that, but he needs to look at what we have seen over the years," she said.

Murkowski sent Dunleavy a letter earlier this year urging his administration include a state match in the coming year's budget to ensure federal funding for the Tustumena replacement is secured. That issue is still unresolved.

Tornga said he approaches the operations of the Tustumena from the position "that we've got to keep this working for the next four or five years," until the replacement vessel is complete.

"Unfortunately, it means that you're spending more on your maintenance on a vessel than you really want to, but that's what you have to do to keep it going," he said.

Work on the Tustumena replacement is just one of several projects that the marine highway is undertaking. Federal funding has also been allotted to cover design costs for new mainliners - which could eventually replace the Columbia and the Matanuska. Design work for those vessels is slated to begin after the Tustumena replacement is underway, Tornga has said.

But the completion of those projects is scheduled to be done over the next several years, and their impact will not be immediate. Meanwhile, service is diminished.

"Nobody takes the ferry now for fun. If they're moving, they take the ferry. If they are trying to get an RV to Bellingham, they take the ferry. Nobody just goes away anymore, because it just doesn't work," said Charlotte Glover, owner of a Ketchikan bookstore.

"The more reliable we get, we'll see that come back, because the demand is there. Unfortunately, we're not reliable yet," said Tornga. "When you defer a year, it costs you, and unfortunately we've had some deferred maintenance."

Every community served by the ferry has seen a decline in service in the past decade. Even under the best of circumstances, a return to the ferry service remembered by longtime residents of Alaska's coastal communities - given the state's current budget constraints - is impossible, state transportation officials say.

Communities have found workarounds to the ferries that were once their bedrock, including using a barge service to move vehicles and spending more money on airline tickets. But if Alaskans can't rely on the ferry to make medical appointments, to attend sporting and music events, to repair their vehicles or to get from one community to another to celebrate a relative's wedding or funeral - what, and who, is the ferry system for?

"I'm not saying that we need to go back to the way it was when I was a kid, but I know the potential," said Murkowski. As a child, she lived in Wrangell, where the family home was on the water. She recalls seeing the ferry on a near-daily basis and traveling by ferry to see her cousins and grandparents in Ketchikan. As part of a family with five children, she said flying would have been unaffordable.

"Our families relied on the ferry system for everything from moving around to medical appointments to just getting out of town to go visit your grandma," she said.

Officials with the state Department of Transportation are working on a marine highway 20-year service plan, which is set to be complete at the end of the year.

Even amid federal investments in the ferry system, that feeling is likely to remain in the coming years.

"There will be some tough times this next five years, particularly as we have the aging fleet and begin seeing new assets brought on," said Robert Venables, head of the Southeast Conference, a regional development group.

"I am really worried about the Dunleavy administration," said Glover, the Ketchikan bookstore owner, adding that overseeing the ferry system "takes someone who has a commitment to the project and can see the big picture."

After a $30 million cut to ferry funding in Dunleavy's first year in office in 2019, marine highway spending has gradually ticked upward, with federal funding making up an ever-larger portion of the operating budget.

Federal funding made up around 24% of the ferries' operating budget in 2023. In the current year, it is projected to make up around 36%. In 2025, state officials are banking on federal funding accounting for almost half of operating costs, according to figures provided by the state transportation department.

When Jon Erickson first arrived in Yakutat a decade ago, the 600-person community was served by two ferries per week - one going north to Whittier, and the other going south to Juneau. First, the ferries stopped coming in the winter. Then, the ferry service declined to two voyages in each direction per month.

Then, service was again cut in half. Last year, Yakutat received no ferries at all.

"How do you get a contractor who wants to come to Yakutat when it costs $7,000 to bring a vehicle here by barge?" Erickson wondered.

"Not having the ferry - it's really caused a discouragement within town."