This was originally posted to: Guemes Island Ferry Committee

Letter To Commissioners On Ferry Committee Meeting

Guemes Island Ferry Committee
Allen Bush, Jr.  Steve Orsini (Chair)   Carl Ullman  Sandy McKean

April 3, 2018

Commissioner Ron Wesen
Commissionre Ken Dahlstedt
Commissioner Lisa Janicki
Public Works Director Dan Berentson
Captain Rachel Rowe
1800 Continental Place
Mount Vernon, WA 98273        via email and USPS

Re:  Guemes Island ferry replacement meeting

Dear Commissioners and Public Works:
On March 31 the Guemes Island Ferry Committee hosted an all-Island public meeting at the Guemes Community Hall regarding the Ferry Replacement Project.  We want to offer you a brief summary of the meeting.

The meeting was very well attended, with nearly 100 people participating.  We began the meeting with an update to provide those in attendance with the latest information available to us.  An outline of the update is attached here, and we followed it quite closely in our presentation.

You will see that we presented a rough calculation regarding the part of the costs for which funding is not currently available and for which fares might need to be increased to pay that portion of a bond.  We explained this is not the County’s preferred outcome, and we knew the $11 figure might be inflammatory.  But we decided to present it nonetheless because it reflects the current status of the Project’s documentation, and it offers a sense of the amounts of money involved.  There were a few clarifying questions, then we moved on to a presentation by Glen Veal.

Glen explained the origins and content of his recommendation to repower and/or refurbish (we may not be capturing the precise words Glen used) the existing Guemes at much, much less cost than the CRAB Proposal.  He provided details of the costs and machinery needed for the job, and the sources of information and prices he used.  He explained that he had discussed his work with Commissioner Wesen.  If you would like more information about Glen’s work and recommendation, we are certain he would be glad to talk directly with you. We encourage you to contact him.

We then opened the floor for discussion. Because you have been in that room with us and our compatriots we know you will not expect a report here of a linear discussion. But there are several things that emerged that are important.

People are of course concerned with the price they will pay, one way or another, for some portion of this Project. There is a feeling that the Project was initially presented by the County as something that would likely attract significant outside funding. That funding has not materialized while, at the same time, the remaining funding gap is described in the CRAB documents as a bond that we are told would be financed by fare surcharges and maybe a property tax.

There was a proposal from the attendees for a show of hands as to a preference between the CRAB submissions and Glen Veal’s recommendation.

But the proposal for a show of hands did not carry the room. Instead, the sentiment was that there may still be time to find the outside funding or to move to a more affordable new boat design, while continuing to develop Glen’s work as real alternative.

The Committee assured attendees that the Committee would do all it can to keep folks informed as the Project continues to unfold.

We would be happy to talk with you about any of the above at your convenience.

Cordially,
Guemes Island Ferry Committee

AN UPDATE
March 28, 2018

LET’S BEGIN WITH THE MOTIVE FOR THE BOAT REPLACEMENT PROJECT
In the last several years the cost of maintaining the Guemes has been going up.  Much of the expense is being paid from the County Road Fund.

The GIFC and others recommended ways to reduce expenses.  Those have not been adopted.

The costs continue to escalate to the point where the Board of County Commissioners (“the  BOCC”) felt strongly that the Ferry was taking up too much of the Road Fund and something had to change.

LET’S NEXT LOOK AT WHAT THE COUNTY HAS DONE IN RESPONSE
In 2010 the County contracted with Marine Survey LLC (Darrel Boyes) for a “Condition and Valuation Survey.”  The Survey determined the boat was in “overall good condition” with some important exceptions. Of which some capital improvements have been made in subsequent vessel haulouts

In 2013 the County contracted with the Elliott Bay Design Group (EBDG) for a study to determine the best course of action.

EBDG presented several options and determined that the most cost effective was to replace the Guemes. with a 28 car vessel at an estimated cost of $8.4 million.
In 2017 the County agreed with the statewide County Road Administration Board (“CRAB”) to likely have CRAB fund up to 30% to 50% of the cost of a new boat, up to $20M.

CRAB’s rules require that the grant recipient County have “skin in the game” such that the CRAB money only pays for up to 50% of the new boat.

CRAB’s rules require that a Ferry District be formed if the project is to qualify for 50% of the project funding.  The District may or may not impose a property tax.  To qualify for 30%, no Ferry District is required.

The County expressed the expectation that with CRAB funding under its belt and a demonstrable boat design, other funders would support the project.

Also, in 2017 the County contracted with Glosten to recommend a design for a replacement boat.  And the County contracted with PFM Financial Advisors to develop a financial plan for the CRAB application.

Glosten presented 5 alternatives.  Glosten relied on County-wide growth projections to inform the size of the boat in its proposals.

The County eventually submitted to CRAB a proposed design and funding for a 32-car, all-electric, and possibly the hybrid-electric, boat.  The price is roughly $26M.
CRAB required a 30% design and a articulated funding program by December 31, 2017.  The County and Glosten met this date.  The submitted materials are on Linetime.
Also in 2017 Glen Veal began development of an alternative, refurbishing the Guemes at much less cost.  We will hear about this from Glen later today.

NOW LET’S LOOK AT THE FINANCING PROPOSAL FOR THE NEW BOAT
So the project is proceeding on the 32-car, $26M, all-electric, or perhaps hybrid-electric, basis.

The County’s original funding plan included the usual revenue from the fare box, motor vehicle fuel tax fund, and other annual sources.  It also included:

$250K annually from a $2/ticket surcharge.
$250K annually from a Guemes-only property tax.

Acknowledgement that these revenue sources still fall far short of financing the boat, so other yet-to-be-identified sources will have to be found.  The idea is that once the design is clear and CRAB has committed $10M, other funders will want to fund the project.
For reasons I don’t know, the County last week issued a new PFM funding plan.  It includes:

$250K annually from a $2/ticket surcharge.
No property tax.
A $16-18M bond.

The County also proposes to begin the roughly $2/ticket surcharge this May 20.  While I have not seen it in County documents, it seems clear to me this is an effort to begin building a fund for whatever the County decides to do about replacing or refurbishing the Guemes.

LET’S NOW CONSIDER THE BOND PROPOSAL
 It would:
Not involve a property tax as currently drafted, but it could do so.
Be paid by Ferry patrons through an additional ticket surcharge.
My rough calculation of a $17M bond amortized over 40 years at 3.5% would require an additional $11/ticket surcharge.
If outside funding is found, as hoped, it will reduce the size of that bond.

LET’S NOW THINK ABOUT THE POLITICS, always a murkier undertaking.
The Commissioners are not in lock step with one another
Commissioner Wesen is not confident the “other funding sources” will be found.
He is reluctant to impose huge fares on Ferry patrons.
The options currently undergoing further study and development are the Glosten electric designs and Glen’s work.  However, Glosten’s other non-electric options have not been eliminated.  Also, the GIFC requested that Glosten provide a cost estimate for a 28-car boat, and the County says that estimate (not design) will be available next week.
The BOCC has received no persuasive information (other than whatever Glen has said to the BOCC) regarding:

Whether the Island water supply can withstand the projected development.
Whether County-wide development projections are inapplicable to Guemes.
The impacts on gentrification of the Island.
Other reasons (than cost) that a 32-car boat may not be the best

LET’S LOOK AT WHAT THE COUNTY PLANS NEXT
It is all about the roughly $2/ticket surcharge.
Public Hearing on the proposed fare schedule, April 17, 9:00 a.m., Mt. Vernon
County meets with CRAB April 19
Public comment period on the proposed fare schedule ends April 27.
County public meeting on Guemes, April 28.

Tags: ferry