Ferries study warns: no money for projects

Washington State Ferries are in such tough financial shape, there's no way to pay for $410 million in capital projects such as new boats and ferry terminals.

Further, because of high labor and fuel costs, ferry management "has little opportunity to control operating costs effectively. The gap in capital funding is likely to be the largest financial problems facing Washington State Ferries."

These were among the findings in a draft of a new, 67-page ferries-financing study given Wednesday to the state Legislature's Joint Transportation Committee.

The study, ordered by the Legislature, was conducted by a team of consultants, including the Cedar Rivers Group.

Among other suggestions was one certain to be controversial: raising peak-hour ferry fares.

"The ferry system has a big gap on the capital-finance side and no idea what to do with it," said Doug MacDonald, secretary of the state Department of Transportation. "The consultant said ... with 80 percent of the costs driven by fuel and labor, we can't rescue the capital program."

He said the consultants say the state needs to make peak hours more expensive to encourage off-peak travel.

"This is very controversial," MacDonald said, "but it's time someone put this on the table. Peak pricing is a really good discussion to open up."

In 2005, 23.9 million riders rode Washington State Ferries' 28 boats, 45 percent in cars and 55 percent on foot. More than half rode ferries in Central Puget Sound.

The study was ordered to try to figure out how to finance the state's ferry system after it took a huge hit in 1999 with the passage of an initiative that slashed the state's motor-vehicle excise tax, which helped finance ferry operations.

Among other findings and recommendations:

• The consultants said the state may have miscalculated the number of cars that will use the new Tacoma Narrows Bridge rather than ride ferries. Consultant Mirai Associates recalculated cross-sound ridership projections and found 4.6 million fewer ferry trips than the state forecast. That means an 11 percent decrease in the 2030 ridership estimate.

• The state needs to manage demand by encouraging riders to walk on and, if driving, to drive during non-peak periods.

• Farebox recovery — the percentage of operating costs covered by fares — ranges from a low of 23 percent on the Vashon-Seattle passenger-only ferry to a high of 111 percent on the Seattle-Bainbridge Island route.

• The ferry system needs to do more accurate ridership projections.

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