Earning public trust, enhancing quality of life, protecting public health and safety
Metropolitan King County Council 516 Third Ave., Rm. 1200 Seattle, WA 98104 Phone: 206-296-1000 Toll Free: 800-325-6165 TTY/TDD: 206-296-1024 Fax: 206-296-0198 council@kingcounty.gov |
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November 8, 2007 The Honorable Larry Gossett Chair, King County Council Room 1200 C O U R T H O U S E Dear Councilmember Gossett: Enclosed for review and consideration by the King County Council as an addendum to the 2008 King County budget is the proposed plan, budget, and legislation related to operating and funding passenger-only ferry service by King County on behalf of the new King County Ferry District. The plan requires a property tax levy of 5.5 cents per $1,000 of assessed value over ten years and lays the groundwork for a revived waterborne transit network that can provide transportation alternatives to our congested roads. The plan assumes the Ferry District will take over financial responsibility for Vashon Island passenger-only ferry service and the Elliott Bay Water Taxi beginning in 2008 and supports up to five future demonstration routes with the capacity to make them each permanent. The Ferry District Board would need to recommend a property tax levy to be adopted by the council by November 30, 2007 for collection to begin in 2008. Today, the Washington State Supreme Court struck down Initiative 747 as unconstitutional. We have not yet had time to evaluate this decision and its potential implications for either the Ferry District or the Flood Control Zone District levy rates. I am choosing to transmit this legislation today regardless so that the council can begin its deliberations and evaluation of the proposed plan. However it may be that our analysis of the Supreme Court decision leads to a changed levy rate recommendation. The purpose of the plan and legislation I present to you today is to assist the Ferry District Board in determining how and what level of service to provide, the estimated operating and capital cost of that service, and the projected level of a county-wide property tax necessary to support this program. Assuming the Ferry District will contract with King County to perform the majority of the activities identified in the proposed plan, the plan also informs the council regarding the budget request included in the enclosed legislation to fund the operations of a proposed marine division within King County’s Department of Transportation. As you all know, the process of developing a final proposal has been an on-going and iterative partnership with the council. Initially we were asked to evaluate a plan that assumed the Vashon service and the Elliott Bay Water Taxi and supported up to three demonstration routes with some financial capacity to apply toward future costs of making some of the demonstration routes permanent. Funding that plan would have required a property tax levy of 3.4 cents per $1,000 assessed valuation. However, several things happened to change that recommendation to 5.5 cents. First, the council asked me to include funding for two additional demonstration routes. More importantly, the council requested that any proposal have sufficient capacity to convert any or all of the demonstration routes to permanent service. The approach to developing a final plan with a higher levy rate was also done in response to extensive legal review which identified some risk associated with increasing the levy in the future. The most conservative view of that legal advice was to set the rate at the level necessary to fund the needs, since the possibility exists that the Ferry District would be constrained in raising the levy in the future. Based upon this legal review, I believe it is prudent to take that more conservative approach and set the levy at a sufficient level this year to fund all the necessary service and capital projects as determined by the Ferry District Board. Therefore I have proposed a rate high enough to accomplish the Vashon and Water Taxi services, all five demonstration routes and the financial capacity to make them permanent. If in the future the demonstration routes do not prove to be viable in terms of their productivity or cost-benefit, the Ferry District Board could decide not to convert these routes to permanent service, and lower the levy rate accordingly. I must make clear that my support for a 5.5 cent property tax levy associated with the enclosed plan to provide passenger ferry service as envisioned by the Ferry District Board is based upon the assumption that the Flood Control Zone District Board will take the same conservative approach to financing proposed improvements outlined in the King County Flood Hazard Management plan and will therefore be adopting a sufficient levy (10 cents) this year to cover the proposed improvements as recommended by the Flood Control Zone District Advisory Board. I know we all agree that protecting the public safety and economy of King County is the highest priority for property tax dollars. The enclosed legislation includes a proposed amendment to the 2008 budget ordinance (Proposed Ordinance 2007-0544), and also includes a proposed ordinance to establish a marine division within King County’s Department of Transportation. This proposed ordinance assumes that the King County Ferry District and King County will enter into a contract for King County to provide and manage marine transportation services on behalf of the Ferry District. Additional actions by the Ferry District Board, including an interlocal agreement for the contracting of services and resolutions to adopt a Ferry District budget and proposed property tax levy rate are being prepared by the Clerk of the Council, Anne Noris. King County also would have to approve an interlocal agreement for the contracting of services. Also enclosed are a proposed financial plan and 2008 budget for the King County Ferry District. Background King County is made up of expansive bodies of water that touch a growing number of communities and employment centers. Years ago, a “mosquito fleet” of small passenger ferries was used to move people and goods throughout the region. In recent years as traffic congestion has become an increasing problem, the idea of again looking to passenger ferries as a possible transportation option has become more and more attractive. As the population of the Puget Sound region continues to grow, so will the pressure on our transportation system. By expanding the set of transportation choices to include passenger-only ferries, the county can prepare for continued population and economic growth and address the quality of life issues related to managing traffic congestion and its impact on our environment. In addition, King County will be faced with at least two major road construction projects in the coming years, the Alaskan Way Viaduct and the 520 bridge replacement. Adding these projects to an already struggling traffic situation will further complicate our ability to move people and goods in our county. An established passenger-only ferry system will assist in the mitigation of these projects and expose more potential customers to the benefits of this transportation option. Finally, with our region’s vulnerability to earthquakes, we need only look to San Francisco’s experience with their last major earthquake to understand the vital role a passenger-only ferry system can play in providing the support necessary to help a community survive and move forward after such a catastrophic event. In 2006, the Washington State Legislature directed that state funding for the Vashon Island passenger-only ferry service, currently operated by Washington State Ferries (WSF), end on June 30, 2007. Engrossed Substitute Senate Bill (ESSB) 6787 provided that a county with a population greater than one million persons and a boundary on Puget Sound, that is proposing to create a ferry district, may submit a business plan to the Governor no later than November 1, 2006 for assumption of this service by the ferry district. The state was willing to extend their operation of the Vashon service beyond June 2007 provided a county proposed a business plan for eventually assuming the service. Because I believe that passenger-only ferries can play an important role in addressing our local and regional transportation issues, I directed staff to proceed with the development of a business plan for assuming the Vashon Island service with the idea of providing not only the Vashon service, but the eventual creation of a Ferry District that could pursue a county-wide ferry program. This business plan was submitted to the Governor in November 2006, and a final agreement was reached in spring 2007 for how this service would become part of a King County Ferry District by 2008. On April 30 2007 the King County Council unanimously adopted ordinance 15739 that established the framework for a King County Ferry District that corresponded with the boundaries of King County with members of the King County Council serving as its board of directors. Under legislative authority provided by the State in 2003, local ferry districts are eligible to receive funding for operations through a property tax levy. To move this program forward in accordance with our agreement with the state, the enclosed plan was developed addressing the operations, capital and financial requirements needed for providing the Vashon Island passenger-only service, assuming responsibility for the Elliott Bay Water Taxi and proposing the creation of demonstration routes for future program expansion. I believe it is critical to begin implementing the ferry district’s program by 2008, so I have prepared and transmitted this plan to the council so that the council can take all actions necessary for the Ferry Board to adopt a budget and a sufficient levy rate by the end of November. Such action is necessary to allow the collection of tax revenue in 2008 to support the start-up of this ferry service program. The following is a summary of the important elements of the proposed plan for this service: Governance The new Ferry District formed by the King County Council is a separate government entity with the council acting as the Ferry District Board of Directors. The Ferry District would have overall governance, policy making, and funding responsibility, including adopting fare policies, service planning and identity branding. The Ferry District is also able to establish partnerships and contractual relationships with other entities as appropriate. In my proposal, a new marine division will be created within King County’s Department of Transportation (DOT) that would perform any work under a contract King County may enter into with the Ferry District for the provision and management of ferry service. Pursuant to an interagency agreement between the Ferry District and King County, DOT’s marine division, with assistance from other county agencies, will lease and purchase vessels, negotiate labor agreements, implement terminal improvements, establish outside service agreements, manage grants and operate ferry service in accordance with the District’s policies. In turn, the Ferry District will pay King County DOT for the costs associated with the provision of this service program. Operations Under the agreement with the state, beginning July 1, 2008 the Ferry District will assume the financial responsibility for the operation of the Vashon Island passenger-only ferry service. Washington State Ferries will continue to operate the service with its employees and vessels, but will be reimbursed by the Ferry District for the operating costs. The Ferry District will contract with DOT’s marine division to assume full operation of the Vashon service starting in July 2009. It is envisioned that the service will be operated with King County employees and will use a leased vessel for at least the first two years of service. It is anticipated that a new vessel will be procured eventually to replace the leased vessel. The plan further calls for the Ferry District to assume operation of the Elliott Bay Water Taxi and that the sailing period for the Taxi to be extended to April through October in 2008 and 2009. The plan assumes the necessary upgrades to the Seacrest dock facility would be in place by the beginning of 2010 allowing the Water Taxi to move to year-round service. However, this is a conservative schedule and upon completion of preliminary engineering and design work, it may be possible to have these upgrades in place to begin year-round service at an earlier date. Under a year-round schedule, winter season service (November – March) will be commuter only hours and during April – October will provide a full service schedule similar to the sailing schedule operated the last several years. Year-round service will be operated by DOT’s marine division using King County employees and a new vessel purchased as part of a three-vessel procurement. In addition to the Vashon and Elliott Bay service, the plan includes the implementation of up to five future demonstration routes, with the financial capability to convert these demonstration routes into permanent service. It is envisioned that each of the demonstration routes would be operated for a two-year period, with a third year for transition of the routes designated to become permanent as determined by the Ferry District Board. The first demonstration route would begin in 2009 followed by additional routes in subsequent years. Demonstration routes may include service across Lake Washington to serve the communities of Kirkland, Kenmore, and Renton. Other demonstration routes may include service on Puget Sound to serve communities in south King County such as Des Moines and communities in Seattle such as Shilshole. To minimize the capital investment required for a demonstration, consideration will be given to potential routes with existing dock facilities capable of supporting service for a two-year period. With support from King County, the Ferry Board will determine exactly where and when any demonstrations will be implemented and will attempt to provide equitable access to passenger only ferries throughout King County. The cost of the shuttle service for each route has been included in addition to funds for initial demonstration route studies. Capital Assets Vessels To begin service operations in 2009, the Ferry District will lease three (3) 149-passenger vessels, one for Vashon, one for the Elliott Bay Water Taxi and one back-up. These vessels will be leased for the first few years while new vessels are procured. The new vessels will be fuel-efficient, low-wake, low-emission boats capable of carrying up to 149 passengers and reaching speeds of up to 30 knots. Ultimately, a fleet of up to nine vessels may be purchased, one for each of the six routes and three back-up vessels. Terminals The existing terminals for the Vashon Island passenger-only ferry service will continue to be owned by Washington State Ferries (WSF). Use of these terminals will be leased from WSF including the services required for on-going repair and maintenance. In cooperation with the City of Seattle, the dock facility at Seacrest Park in West Seattle would be upgraded to provide a safer and more accessible terminal for the Elliott Bay Water Taxi. To support this ferry program, an overnight moorage and maintenance facility would be established near Harbor Island/Duwamish waterway for the Vashon and Elliott Bay service and any other routes that the Ferry District may implement on Puget Sound in the future. Additional docks would be constructed or upgraded for each of the demonstration routes once a decision is made to convert the routes into permanent service. Other capital improvements might include a moorage and maintenance facility on Lake Washington. Financial Proposal Impact on Executive Proposed 2008 Budget: The enclosed documents include financial plans for the new King County marine division – both operating and capital. This also includes addenda to the 2008 Executive Proposed Budget that is currently being reviewed by the King County Council. The addenda include:
Source of Funding for Marine Division
This property tax rate of 5.5 cents to be adopted by the Ferry District would fund the service and capital projects identified above and would require borrowing to support the capital program. In addition to funds raised through the levy, the Ferry District will leverage funds from the state passenger ferry account (an estimated $8.5 million) and federal grants. These funds will be used for vessel acquisition and shore-side improvements. This budget would be sufficient to reimburse King County for any services it provides to the District. No assumptions have been made for mitigation funding from the Alaskan Way Viaduct or 520 Bridge Replacement projects, or for future ferry discretionary federal funding. |