Washington State may transfer WSF to new ferry district

Washington State Governor Chris Gregoire is proposing handing over the state ferry system from the Washington State Department of Transportation to a newly created regional ferry district.

As we reported in November,, at the request of the governor, last year a panel of experts from the Passenger Vessel Association (PVA) conducted a review of how well Washington State Ferries had implemented changes recommended by past system reviews and audits. The panel was also asked to make further recommendations for efficiency improvements..

Its first recommendation in that report was that the state consider studying the ferry governance model to determine if opportunities exist for positive change. The panel felt that “the current governance model for WSF is outside of the norm for public ferry operators and that WSF suffers from excessive oversight.” In response to that recommendation Governor Gregoire asked PVA to undertake a follow-up study. The focus of the study was to “identify and outline the governance models used in ferry systems in North America…and how they would apply to the operations of the Washington State Ferries Division.”

For the follow up study, which you can download HERE, the PVA was asked to review ferry operations across North America and identify what could successfully apply to Washington State Ferries.

The models PVA reviewed were:

• Private operator – Bridgeport & Port Jefferson Steamboat Company
• Private operator with publicly owned assets – NY Waterway
• Independent local authority – The Steamship Authority (Massachusetts)
• Publicly owned corporation – BC Ferries
• Regional transportation district – Golden Gate Ferry
• State transportation division – North Carolina Department of Transportation Ferry Division

The PVA report also identified the key challenges of Washington State Ferries, including lack of stable funding, and the Washington State Department of Transportation’s complex and diverse responsibilities and diffuse leadership.

With PVA’s analysis and these challenges in mind, the Governor will introduce legislation to create a regional ferry district to operate the ferries. The Governor says this partnership between the state and regional ferry district offers the best opportunity to deliver services that ferry customers and communities need in a cost-effective way for state taxpayers.

The Governor’s proposal, it is said, would put the district’s decision making in the hands of a board directly accountable to customers and communities. The district’s funds would come from fares, a state subsidy to pay for a core level of service, and regional taxing authority to ensure service levels are consistent with local and regional needs. In addition:

The district would include all western Washington counties now served by ferries.

A district board would be elected from areas near current ferry routes and at-large members would be appointed by the Governor.

A dedicated and ongoing state subsidy level would be provided.

Local taxing authority would be established to ensure service levels are consistent with local and regional needs.

Washington State Ferries make 180,000 trips and carry 23 million passengers and 10 million cars annually. It is the largest ferry system in the U.S.

The ferry system lost a major funding source in 1999, when voters repealed the motor vehicle excise tax, or MVET, through Initiative 695.

In fact, says the governor “our ferry system would be financially sound today if we had not lost more than $1.2 billion in excise tax revenue over the past 10 years. Since that time, service has been cut and fares have been raised, including a 20 percent spike in 2000. Service reductions and fare increases have been major contributors to a loss of more than 4.1 million riders since 1999. To maintain minimum service levels, large subsidies from non-ferry sources have been required. These subsidies have grown from no subsidy in the 1997 – 99 biennium to an average of $93.8 million per biennium since the loss of the MVET.

The Legislature provided additional capital funding through the 2003 and 2005 revenue packages that totals $213.6 million to date.

“Despite slashing $27.7 million in administrative and other costs,” says the Governor, “we still face a nearly $900 million shortfall over the next decade. A patchwork approach to funding is not feasible. Without major reform, ferry customers and ferry-dependent communities will face continued uncertainty. Now is the time to address the underlying structural and financial issues that challenge this critical piece of our state’s transportation infrastructure.”

January 8, 2011