Insurance dispute stalls ferry food-service plan

By Susan Gilmore
Seattle Times staff reporter

Bill Dorn, owner of Sound Food Cafe.

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"We all thought we had a solution and it would work, but it blew up in our faces," said Bill Dorn, owner of Sound Food Cafe on Vashon Island, which had won the bid to provide food service on the Fauntleroy-Vashon-Southworth route.

Because Dorn's company is so small, he's been unable to secure insurance for his operation.

Last month the state persuaded its own insurer to make a deal with Sound Food, reducing the company's insurance costs from $70,000 to $25,000 a year. That eventually dropped to $17,000 a year.

But that policy has a $25,000 deductible — too high for Dorn. So the state Department of Labor and Industries (L&I) last month tentatively agreed to insure Dorn's 14 workers, including the deductible. Dorn was just weeks from beginning food service.

That fell apart last week when L&I said that Dorn couldn't legally get coverage for his workers under the state policy. Maritime workers are covered by the Jones Act, a 1920 law that protects seamen but prevents L&I from providing coverage.

The chance of food aboard any state ferry this summer seems slim. Of three contracts the state signed with concessionaires, Sound Food is the only one to have an agreement with the Inlandboatmen's Union, which represents the ferry galley workers.

Dorn said if he could reach an agreement on insurance, he could begin food service within about two weeks.

State Sen. Erik Poulsen, D-Seattle, who represents Vashon Island, said he thought the insurance problem had been fixed.

"The L&I decision not to cover Sound Food really threw us a curve," he said.

Dorn said the only solution would be for Washington State Ferries to add Sound Food to its insurance policy, but state officials say that can't happen. "We're not set up to be in the insurance business," said Brian Volkert, business-development manager for the ferries. That would put the state ferry system on the hook to pay Dorn's $25,000 deductible.
 
Poulsen agrees that the only option left is for the ferry system to extend coverage to Sound Food employees, and he's exploring what's involved legally to make that work.

"(The ferry system) told us no, but not hell no," he said.

The state Legislature might be able to pass a law requiring the ferry system to cover the concessionaire — but Poulsen isn't sure there's the political power to do that, and it's complicated by the Jones Act.

"This is too big an issue for political muscle to solve outside the legislative session," he said.

The state ferries have been without food since January when Sodexho, which held the contract for the ferry galleys, pulled out with four years to go on a 10-year deal because it said it wasn't making enough money. About 130 employees were given pink slips.

The state rebid the contract, and the main routes were awarded to Cascade Concessions of Vancouver, Wash.; Sound Food got the contract for the one route.

But Cascade has been unable to reach a labor-contract agreement with the Inlandboatmen's Union, which represents the galley workers, and said it won't be able to start food service this summer.

Susan Gilmore: 206-464-2054 or sgilmore@seattletimes.com