Another Fare Increase?

Going back to the early 1980s, fares on the Guemes Ferry have been set by a series of County Resolutions based on the bridge analogy. The bridge analogy is a concept that the ferry is part of the road system but is also a transportation modality like a bus system.  The agreement in the various resolutions is that Skagit County will pay the capital costs of the operation, similar to the manner in which the County’s road fund pays for bridges in the County.  The operational costs of the vessel, mainly the crew’s wages, the fuel, oil changes and insurance will be paid from user fees. This portion of the cost of the vessel has been termed  “operation and maintenance.”

User fees in transportation systems usually cannot meet 100% of the operation and maintenance costs. Further, for largely historical reasons in the State of Washington, certain Counties operate ferries.  In recognition of these facts, and because ferries are considered part of the road system, the State of Washington has appropriated two revenue streams to help meet the operation and maintenance costs of the counties with ferries.  One of the revenue streams comes from the State Motor Vehicle Fuel Tax and the other from a biennial fund from the State Legislature administered by the Washington State Department of Transportation.

The amount of the State Motor Vehicle Fuel Tax is an apportionment.  As the fuel tax revenue fluctuates, so does the apportionment.  In the last five years ending in 2016, the revenue from the Motor Vehicle Fuel Tax to Skagit County for the ferry has averaged about $148,000 annually. 

The biennial fund from the State of Washington, historically about $2.0 million, is applied for annually by each eligible county through an instrument called the Deficit Reimbursement Report.  This annual report summarizes the operations and maintenance costs, not capital costs.  The three counties currently eligible for this funding are Pierce, Skagit and Whatcom.  The county with a higher operation and maintenance cost in a given year usually qualifies for a greater allotment from the fund.  The five year average for Deficit Reimbursement for Skagit County ending in 2016 was about $178,000, but because of the nature of the apportionment process, the amount received varied from a low of $89,216 in 2013 to a high of $349,260 in 2015.

The third stream of ferry revenue to Skagit County is from the fare box revenue with a five year average of $1.01 million. The amount of the fares and the fare increases are codified in County Resolutions. The current base Resolution is 20110382 passed in 2011.  It was modified in 2015 to reflect a fare increase but the basic language and approach was not changed and has essentially two parts set out in Attachments A and B of the Resolution. 

Attachment A describes a process to prepare and distribute an annual Work Plan and to generate a Draft Annual Ferry Fare Revenue Target Report. The production of the Work Plan and the Target Report is to be accomplished with public input based on two Public Forum meetings after which the Draft Work Plan and Revenue Target Report are to be finalized.

Attachment B prescribes the “ferry ticket fare methodology” set by the County.  Each year the fare box revenue target is to be set using financial information from the past five years.  The target is a calculation based on the annual Deficit Reimbursement Report amount less revenues from the Motor Vehicle Fuel Tax and the State Ferry Deficit Reimbursement.  These costs and revenues are averaged over five years to mitigate large variations in year-to-year maintenance costs and revenues.  The fare box revenue target is then multiplied by 65% which is considered a fair percentage for return from transportation systems.  The Board of County Commissioners (BOCC) can change this percentage as they wish.  Based on the reporting requirements in Attachment A of the Resolution this work is presented to the BOCC by April 30th of each year.

Embedded in Attachment B are four concepts:

  1. The data used in the fare calculation is based on completed prior years’ figures, meaning budget projections shall not be used to calculate a fair box revenue target.
  2. The target does not include capital expenditures. 
  3. There is a reporting time frame.
  4. This is a recommendation only. 

New Fare targets have been set and met or exceeded for the last five years. But the process outlined in the Resolution has broken down for two of the last three years. No Public Forums have been held this year and the time frames for submission of the Draft Ferry Fare Target Report have been missed.

In July, 2017,  Public Works presented a recommendation for a potential fare increase in January, 2018 based on budget projections for major losses in 2017 and 2018.  In September the BOCC complained that the Resolution was “not working”.    How to reconcile the County’s perception that the Resolution is “not working” with the County’s own noncompliance with the Resolution is the subject for the next installment in this ongoing saga of the Guemes Ferry.  And, no, it is not as simple as the boat is getting old and costing more to maintain.

-Stephen Orsini and the Guemes Island Ferry Committee


Attachments A and B To Resolution 20110382

We've been here before:
Letter To The Commissioners On Proposed Fery Fare Increase, 2010