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we're Jackson here with Ketchikan Alaska news and I'm here today at the heptagon City Council Chambers and I'm going to interview Bob sivertsen regarding the RFP for private port management see what he has to say okay hello I'm here with Bob Sivertson teases a catch Kansas City mayor and we're gonna talk a little bit about this our P process and expansion of the catch-can City port and I'll have a couple questions and we'll get going here Bob what is the primary motivation that brought a pot brought this RFP proposal for a private port vendor so first of all thanks Larry for putting this process together to where the community can learn more about what's going on in the in the greater katikut area so in regards to the motivation when we started down this road of what we need to do with the ports and regards to that growing industry it was before we had the word Cove project conception and time so we were looking at the potential of expanding the docks we went to an outside contractor for design and cost estimates we were thinking somewhere around I think 40 million in the original concept and somehow that blew up to almost 100 million so it was a very expensive project and so through the process we decided so what can we do to fund such a project and not put the burden back on the community and just real quick that's to accommodate the larger ships yes and how many of the larger ships well it would be a single berth what your team going on and allow southeast Alaska is they're building 450 foot floating berths in order to get as many ramps down as they can to get 4,000 4,200 people off in a timely manner and getting back on the boat and so that's a driving force of why they like the floating dock sure and they don't have to man gangplank probably just going down so as we look at this process we knew that there was going to be an increased funding so we needed to look at all the aspects of that so we reached out looked out in the market we actually went to Miami and visited with the industry to find out what was going on on the rest of the world and so there was two processes really one was a preferential birthing right which where a single company could say we will give you a guaranteed patent account that you can take to the bank and get funding to build a dock that we would have preferential right set and the other one was a concessionaire where you would have somebody come in reach an agreement to run and manage the port infrastructure of the community we we've got a contractor to help us with the writing of that RFP it was a little bit unique and we ended up with the RFP going out on the street you know there's some questions back and forth some regards to what we were looking for from the contractors when we ended up with three bids so as we went through this process all of a sudden Norwegian Cruise Line made an agreement in Ward code to build docks there so now we are not a part of this four verse we're a four to six plus two of them privately owned and so how does that change the dynamics in regards to meeting the market share for for these ships and of course the two larger ships surgeon or we can cruise line home so if they move toward code it frees up the slot that they have all of the RFPs when we talk about port expansion specifically talked about when the need arises when the market arises and even our contractor said you got to be able to capitalize on the investment that you're going to have so we got to think about how that works at a timetable into when do we now need to expand the ports so the dynamics changed when we first started this process to where we are today and so in the review of the RFP we got to determine what's in the best interest of the community because we've heard loud and clear from the community in regards to what they want and they're a little bit different and different don't get why after a hundred years and 40 years of tourism or 50 almost of cruise line vessel why we are having to borrow money to expand the port I understand is expensive but if it's such a revenue generator which it is why are we then put in this awkward position of always having to go and get more money to expand the port to accommodate the industry when we haven't really been charging enough to anticipate that expansion I mean so you've been a businessman fast and you got to figure out how much you can charge for that board and so well it's the same kind of thing with what the ports and we're dealing with a multinational global operation that has mobile assets so if you remember back when the state of Alaska raised passenger fee and the industry bought that it they just started by passing some of the ports but the pressure on the communities to put the pressure on this date and then governor Parnell went back to Miami and sat down with the cruise industry and they renegotiated that and came with a reasonable pair everything back to normal unlike I think some of the ports and right now with the city management we don't have what you would say you the middleman that has to get a profit from someplace right so our main interest is to make sure that those ports are available so it brings revenues we get taxes and and at a price that covers our costs of maintenance and and you know we recently did pass on a rate increase we've raised it by two dollars hope you have a million pastor that's gonna be two million dollars more that we can utilize and if we take those and use them for debt service it gives you an opportunity to get rooms or okay there is this restriction can you explain the restrictions on how port fees had tax fees which are two different fees are restricted on their use so the CPP monies go to the state and then the first seven ports of call get it five dollars off of that we split our turfs with the catch-can gateway borough so we get half of that and then those are the use of those are in regulations about how we can use those and they have to be used on the port port infrastructure something that directly benefits the ship and then when you talk about the tie up fees were war pita stuff there was a lawsuit about in Juneau about how they were using those funds for other than crews related projects are so that lawsuit went on for quite a while Clea the cruise line agencies of Alaska and Cruise Line international on one side with city of Juneau on the other side well they won that lawsuit in regard to the tonnage clause which is very old law that talks about how if you're going to tax the tonnage and and stuff in the maritime industry that those have to be used to support that industry and so after the lawsuit I think that tourism side of it the clea stuff they realize that there needs to be a conversation with the local community it's about the needs and how we can maybe utilize some of those funds to the benefit of not only the cruise industry but of the community itself to relieve some of those pressures and so they've had that negotiations and discussion in Juneau and come to an agreement that what they can either sponsor we still have to have that discussion here in Ketchikan and I think we've invited the participants down to talk to us yeah I think that people want to know if the cruise line is such a benefit to this the greater community why can't it the fees that it generates be used to pay for a school a sewer system a water system it seems crazy to have this this emphasis industry and then not have some societal benefit other than sales tax so correct but again it goes back to the decision through the court systems that it has to benefit the industry itself but I think there are some dual benefits and and how that works and so in the decision-making process through the judge you know if we had a ramp going to the ship that's covered or a sidewalk going to the ship discovered but then when you get past that in it's not directly related to the ship and in its port side operation then it falls outside of the uses of the - well I think that time to change and so now the infrastructure within the community does benefit the passengers before it had to benefit the ships now I think there's some leniency in the fact that they understand that we have to have some shore side amenities that benefits both the community and the passengers and be able to utilize some of those funds as part of that yeah if you take an example of somebody having a heart attack and they have to drive on a public street to the hospital and the city owns the hospital why can't we use the fees to pay for the hospital infrastructure or whatever it's essentially a benefit sitting it can be passed on all the way down to the eye think the airport people will have to fly in to get onto the ships are on so actually the the hospital benefits from the fact that they've charged the patient for the shuttle Center but you have their uses I don't disagree that there is infrastructure within the community that gets taxed when you bring in that large volume of people waste water systems your wastewater systems were designed for the community of the size of Ketchikan or Skagway and then when you put a million passengers in there it definitely has an impact so presently I think there is a legislation to look at the ocean Rangers money and anything that's left over from the reorganization may be able to be used for things like wastewater infrastructure into it okay what happened to the initially when they looked it's expanding the port there was just a kind of a temper down version where we did expand berth one maybe serve a point would expand there you get then three Panamax size ships some some different ideas in regards to how we could do maybe a on dock gantry that would help and stuff but it takes up the commercial side of the dock in regards to bringing buses on passengers moving around tours independent tours that kind of stuff then we looked at maybe extending out a little bit off the end of birth one but again we don't get all the ramps on a floating document as we see around that what's going to happen in work code what's happening up in Hoonah what they've done and you know if the floating docks are the choice I guess the preferred choice in regards to how you berth larger ships and get more ramps it's all about get people off on either one ones so then we went out to the design phase with Moffitt Nichols and took a look at what what happened there so the increase in cost was basically moving the dock another 60 feet out from the face of the pier you go into deeper water larger piling and more cost in regards to installation of those pilings and how you change things around and there's other issues with ramps and and different things so it it it has more constituent did that turn out to be like 90 million kind of which is substantial yeah I mean the first reaction to that is well obviously if the industry is building bigger ships and we've known that why hasn't that process already been paid for or I would think that you would just charge accordingly yeah well it's a matter of what the need is because right now we're meeting some of those needs and with the expansion Ward Koch I still think the city of Ketchikan need to pursue that option and we may have to go into some more I think standardized funding sources and to do that and then of course we have to recoup the cost through sometimes a negotiated fee with the cruise line industry so back to this RFP would the poor employees that are serving dual purposes how would this affect them some of them work on the port in the summer and then they work in the harbors in the winter and they get a full-time job so again that could be an impact but all the items that are presented in the RFP comes to the negotiations if we if we select an individual operator then we sit down and start negotiating what the city would like and of course they got to come back with with what their demands are and so it's not set in stone but I agree there there are benefits to the port staff and how we utilize them later on not all the course go there but when would the decision be made is there a timeline that we can say okay we're gonna choose this or not so there's a lot of information to digest and when we receive the RFPs and sat down and went through it generated tremendous amount of questions in regards to whether it be operational financial what the offers are what they really meant and the long-term benefits and trying to match up the financial statements and how they each individual proposed or presentative is has been a little bit difficult because it's not apples gonna have to lay up for it we're not even in there someplace right and so I think with ward Cove going in Norwegian Cruise Line is continuing to the state that they're gonna stay at the port for this season they may make it the question that arises to me is in a capitalistic world if you have high demand in limited occupation well the port fees shouldn't escalate to a cop to match that demand but would we just go up for auction and say hey highest bidder you got a slots little slot open so I see here or what say you do that right so you got a B and C company at the dock and they've been long-term customers they've been here every and that schedules that they have coincide with schedules I have in Seattle and schedules going north you it's not just as easy applicable here so yeah let's go up to the highest bidder so a guy comes in the highest bidder so now we get DNA in here they only stay five years then what do you do because they can't make it up north their schedule doesn't work coming out of Seattle yeah it also has limited berthing everybody wants to come out of there on the weekend so they make the week cruise and get back right what's here four years and you have a new guy that wants to come in and displace them you gotta you gotta you have to make a decision on what that means so do they have no long term contract though then or even just pulled out within days it's not a long-term contract and so it's a supply and demand thing and how you manage you have okay yeah so we are committed as a city to expanding these berths to accommodate the neo Panamax we we have a need yes and so I think that president council understands that there's at some point we're gonna have to do that but again you got to look at the overall port and and so I think that berth 3 has some modifications that we could probably afford 2.93 million dollar or something like that in order to get it up to a point where we're handling 1,150 foot ships better and then there may be other agreements even outside the RFP to where we can continue to work on the upgrade of birth Wan and working over for your opinion though via the RFP would you prefer to have a private vendor manage support or would you prefer to just keep it as is and do some juggling well I think that we only receive the concession so we didn't have a chance to compare that to a preferential and there's it's all in the Devils of the detail right so I've heard loud and clear from the community they didn't want to give up access to the report of our ownership and you look into the the RFPs and sometimes you look at it that if there's something you want to do you're gonna have a legal battle in order to do it you're gonna have to fight now to hear your manager and there is at least one of those proposals that would like to see the city pass by gestation to where we don't interfere in either the expansion are the rate structure that that's something they have to have control of in order to meet their financial needs I asked Colin Murphy last week if there was any revenue sharing so that this didn't happen per se were you lock him into contract now they have this ability to maneuver the rates to their advantage which we you would think a company would want to do and he seemed to indicate that there was a revenue sharing at least in theirs but he didn't want to commit to anything and I appreciate and I don't either but the fact is is that you look to there's a couple of ways that you can do this just on a broad perspective is the city's receiving revenues now does the city get to keep those revenues or they all go back to the operator and do we get a percentage of those revenues or do we just get a lease fee and it's a revenue sharing based on a certain passenger volume after this after that or if they increase the size of the port and there's more revenues than that shared so I mean again when we look through this RFP processors it generated a lot of questions okay I have answers too so okay I got that yeah yeah so it's uh it's complicated at one time I think we had this urgency to it and I think that what's going on presently as to some extent allowed us breathing room because again when we talked to all the players out there we got to make sure that if we're gonna do this expansion 100 million dollar investment that have done at the right time for the right reason and with the right funny one last question is a little bit related Ward Cove is going to have to bust people to downtown that I shouldn't say work coves it the new port there and they have created an arrangement that I'd like clarification on how do they where they bring these people is the city going to charge them so that that's a whole conversation in itself as a transportation side of it because there would be added buses transporting people to the community at cat-scan we haven't I think rushed out all the appropriate spots that that may happen in there's ordinance that keep them from just dropping them on the street course and that would be chaos if that that were to happen so and it was in that transportation discussion there's also the potential for marine transportation of those individuals with boats up to 200 passengers and so that probably plays into like maybe a lightning process and we have a lighter in free now but since they're already important might be something other than that but again there's been no concrete decision in regards to that and the talks are ongoing the city has no obligation to accept any of these sure and that would have to happen if it did it would have to happen at the council level I assume correct councils the ones that makes a decision and as you look around the makeup of the council I don't think you can find people that are more connected or dedicated to this community than articles on it they really care about to me they don't have any special interests in regards to moving forward one way or the other except for the fact that they want to do what's right they can yeah good yeah Thanks that's pretty much all I got there