Amendment to Ferry Rates Ordinance to Be Introduced

At the County Council meeting on Tuesday, June 5, the County Council is being asked to introduce an Ordinance amending  the Ferry Rates Ordinance:

Ordinance amending Whatcom County Code 10.34, Ferry Rates (AB2012-197) (hearing to be scheduled)

By accepting the introduction of this ordinance, Council is agreeing to enter it into their process for scheduling a public hearing, and consider taking action on it at some future date. They will not be voting on the ordinance at this time. 

Though the proposed amendment document itself does not say a hearing is required, the Council agenda (quoted above) indicates one will be scheduled.

This proposed amendment to the existing Ferry Rates Ordinance aims to change the way the County’s 45% contribution to ferry operating expenses is currently calculated. According to the proposed changes, which would go into effect as of January 1, 2012 (the current year):

…[A]ny interest income, miscellaneous ferry fares income, or income from the State of Washington specifically identified as the Ferry Deficit Reimbursement and the credit for County Employee ferry trips will be deducted from the actual operating costs before the actual 55% fare box recovery rate is calculated and before the actual 45% Road Fund subsidy is calculated. The goal of this method of calculation is that the Road Fund will not contribute more than 45 percent of the adjusted operating costs each year.

Currently, here’s how the Ordinance is worded (since 2007):

…[A]ny interest income or income from state motor vehicle fuel tax for ferry operation will be deducted from the actual operating costs before the actual 55% fare box recovery rate is calculated.

The effect of the current wording is to first subtract interest income and fuel tax money the state pays to the County for ferry operations from total operating expenses before calculating the 55% of expenses which must be recovered by fares. These amounts are not subtracted when calculating the County Road Fund’s 45% share. This proposed change is intended to make the calculation method the same for both.

This new proposed ordinance would also change how some of the state money is described. Instead of the current “state motor vehicle fuel tax for ferry operation,” the description would become “income from the State of Washington specifically identified as the Ferry Deficit Reimbursement.”

Under the current method, 55% of the state fuel tax amount (and any Ferry Fund interest) were used to offset fare recovery, and the remaining 45% was left in the Ferry Fund to help reduce any deficit between expenses and fare and Road Fund contributions. With the proposed method, that 45% of the state revenues will be used to reduce the County’s contribution to expenses, and annual shortfall (if any) would be increased by that amount. Then 55% of that additional shortfall will have to be made up through future fares.

According to a letter from Frank Abart, Whatcom County Public Works Director to County Executive Louws, the amount involved over the past four years has ranged from about $53,000 to $80,000 last year, totally about $250,000. Using the proposed method, ferry fares would have been expected to recover 55%, or $137,500 more than under the existing method.

Changing the description of the state fuel tax monies received from the State of Washington specifically because the County operated the ferry at a loss is intended for this purpose:

There have been concerns expressed regarding other state funding and confusion about whether it applies or not. This language change is intended to eliminate the confusion.

There is another revenue from the state paid to the County because they operate a ferry which Public Works has insisted does not have to be accounted for as part of the Ferry Fund. They argue that, though the County receives those funds because they operate the ferry, the state does not earmark those funds for ferry use. In the past, some Islanders (including the 2011 Task Force) have argued that any revenue the County receives because of the ferry operation should be treated as revenue to the Ferry Fund for accounting purposes, and then reallocated to other parts of the County budget as the County wishes.

This amendment ordinance will be introduced at the County Council meeting next Tuesday, June 5, at 7pm in the Council Chambers, 311 Grand Avenue, Bellingham.

3 thoughts on “Amendment to Ferry Rates Ordinance to Be Introduced

  1. For me this makes no sense AT ALL! If the County receives money BECAUSE it has the responsibility for the Lummi Island Ferry/Transportation across Hales Passage, then it seems like a no-brainer that the money should be a part of the Ferry Fund. This ordinance/amendment seems like a kind of “slight of hand” magic trick and it’s outcome will be to cheat the Islanders, once again in meeting the 55% we are expected to furnish from Ferry Fares. Oh, and then cut services and people who can afford the Ferry Fares as they continue to rise to pay for the 55%! Am I wrong, or is this a blatant unfairness to residents of Lummi Island?

  2. –A Math Issue–
    In response to: “ferry fares would have been expected to recover…$137,500 more than under the existing method.”

    The $250,000 has already been factored by the 55%. So fares would have had to recover the full $250,000. Last year, if this change had been in place, fares would have had to recover an additional ~$80,000.

    –And Something on Equity/Accuracy–
    I am conflicted on the MVFT funding issue. On one hand, it seems like the deal continues to change. The 45/55 split was developed under a set of conditions that no longer exists. That has many islanders upset.

    On the other hand, the MVFT deficit funding is intended to mitigate the County’s cost to operate a ferry. MVFT deficit funding is not intended to reduce our cost to live here. But as previously applied, the MVFT deficit funding did nothing to reduce County ferry operations. 100% of the benefit accrued to ferry riders.

    While PWA’s proposed ordinance change might be irritating, it actually seems more consistent with the state’s purpose. If anything, we may still be lucky. After all, ferry riders will still receive 55% of the benefit from a funding source that the state targets to County ferry operations. I find it very hard for me to argue that that treats islanders unfairly.

  3. I agree with Chandler that the part of this amendment that specifies how the MVFT funds will be applied is difficult to argue as some other county ferry systems deal with it the way this proposal states.
    I do object to the provision that the credit for ferry fares not paid by County Employees is applied before the 55/45 split. If county employees paid fares, the total amount would fall into the 55% ferry income side. Many of the trips made are by the Health Department, Building Services Department, and Assessors Department – none of which are a cost to the Road Fund. If the intent is to deal with the ferry crew and their families’ free passage, that is better specified as a dollar amount in the benefits expense. Those other department trips are not a ferry operational expense, they are a legal obligation of the county to perform certain duties in every area of the county. A rough estimate by the 2011 Ferry Task Force was that this is not a large amount, but would fulfill the stated intent that the Road Fund not have to pay more than 45% of the ferry operational costs.
    Corrected wording (not showing changes, as I can’t add those characters here): “…[A]ny interest income or income from the State of Washington specifically identified as the Ferry Deficit Reimbursement will be deducted from and the cost of providing ferry crew and families with free passage will be added to the actual operating costs before the actual 55% fare box recovery rate is calculated and before the actual 45% Road Fund subsidy is calculated. All miscellaneous ferry fare income and the fare that would have been charged to all crew and family of crew members, and to all other county employees not on duty as crew or while performing inspections and repair services on the ferry system will be credited to the 55% fare box recovery. The goal of this method of calculation is that the Road Fund will not contribute more than 45 percent of the adjusted operating costs each year.”

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