HomeMy WebLinkAboutSpecial Committee of the Whole August 9 20111
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
WHATCOM COUNTY COUNCIL
Special Committee Of The Whole
August 9, 2011
CALL TO ORDER
Council Chair Sam Crawford called the meeting to order at 12:30 p.m. in the Council
Chambers, 311 Grand Avenue, Bellingham, Washington.
ROLL CALL
Present: Barbara Brenner, Sam Crawford, Kathy Kershner, Bill Knutzen, Ken Mann, Tony
Larson and Carl Weimer
Absent: None
SPECIAL PRESENTATION
1. PRESENTATION OF THE FINAL REPORT AND RECOMMENDATIONS OF THE LUMMI
ISLAND FERRY TASK FORCE (AB2011 -187) (12:32:06 PM)
Barbara Ryan, Lummi Island Ferry Task Force Chair, introduced the Task Force members:
Riley Stark, Jim Dickinson, Patricia Dunn, Diane Harper, Kathy Berg, and Chandler Johnson.
Chandler Johnson, Lummi Island Ferry Task Force member, submitted and read from a
presentation (on file). Ferry ridership has fallen because people don't have enough money to visit
and people aren't building houses. A shrinkage ridership pool is paying for a larger portion of the
costs. To reconcile the cost to the ferry riders and the cost to carry a passenger, they must reduce
total costs. If they can reduce the total operations expense, then the total paid in ferry user fees
and the total contribution from the road fund will also be reduced.
(1:03:23 PM)
Brenner asked for feedback from the Public Works Department Director. She's not sure if
all the recommendations are legal.
Frank Abart, Public Works Department Director, stated that at this point, he does not have
any comment, but would like to thank the Task Force for all of the hours they put in. There a lot of
good ideas, and some need review. There may be a conflict with eliminating the parking lot. He's
not sure how the elimination of the parking lot will be received, but there might not be a choice
because the County doesn't own the lot.
Brenner asked about reducing the amount of crew people. She understood that the Coast
Guard requires three crew. Abart stated the Coast Guard requires three crew during operation.
He's not sure about the required staff during startup. He will have to check on that.
Mann asked about the amount of the motor vehicle fuel tax that is attributable. Abart
stated there is a long- standing debate about how that's defined. If they want that in their budget,
he will vigorously pursue an equal offset to the County's percentage of contribution from the road
fund.
Knutzen asked and there was discussion of whether the Coast Guard would allow the ferry
to operate on one engine.
Special Committee of the Whole, 8/9/2011, Page 1
Jim Dickinson, Lummi Island Ferry Task Force, explained the history of running on one or
two engines. The second engine has to be available. The recommendation is that the second
engine will be idle and burning no fuel.
Knutzen asked if the Task Force is suggesting that they reduce the fares. Johnson stated
the recommended fares are lower than or equal to the current fares. That's made possible by cost
cuts.
Larson asked if they discussed reducing the contribution from the road fund and shifting the
revenue. Abart stated the total costs that are reported to the Council include capital expenses, and
average $1.86 million.
Larson stated the Task Force exceeded his expectations. He appreciates their work. He
voted against the surcharge because of the elasticity of demand. He would like information on
what the ticket prices did relative to ridership declines. Because of elasticity of demand, they can
increase total revenue because lowering the cost of something can generate more revenue. He is
looking for that in this situation. They must try it and study the trends. If it doesn't work, they
must be prepared to adjust it. Look at exactly what happened relative to the fare price changes.
He's not convinced that raising prices is the answer. He asked how they arrived at the fares used
in the recommendation.
Johnson stated they arrived at the recommended fares from input received at community
meetings.
The elasticity of demand generates a lot of discussion on the Island. Islanders would love it
if cutting fares generated more revenue. A study for the Washington State Ferry system indicates
that the price elasticity of demand for the Washington State Ferry system was -.2. If that number
is less than -1, the system will lose money by raising fares. If the number is more than -1, the
system will make money by raising fares because it will increase total revenue. The Washington
State Ferry system is not exactly comparable. There is a different scale of operation. However, no
study done in the U.S. in 20 years shows price elasticity of demand for infrastructure that is less
than -1. The amount is almost always -.2 to -.3, and the biggest determinates of elasticity are the
number of tourists and GDP growth.
The issue with assessing available data is that there are many observations of ridership, but
few observations of ridership plus price changes.
Larson stated this is a challenge. They must start thinking creatively.
Mann stated he thanks the Task Force. He asked for more information about reducing the
number of ferry runs. Johnson stated the Task Force recommends adding a ferry run at 10:20
p.m. run and eliminating the 11:00 p.m. and midnight run Sunday through Thursday. That would
eliminate two hours of service at the end of the day, five days per week. Don't eliminate two hours
of service in the middle of the day. Traffic at the end of the day is so small that it doesn't pay the
cost to operate the ferry. Traffic in the middle of the day is substantial. They would have to take
three hours out of the day to get a two -hour service cut because they still have to shut the boat
down and start the boat up. They lose revenue for three hours to get a two -hour service savings.
Traffic during a two -hour period pays for two hours of service.
Mann asked about the Task Force's decision to not include capital costs in their analysis.
Johnson stated it was a decision the Task Force made for several reasons. First, they are focusing
on the ferry fund. Capital costs are not included in the ferry fund.
Mann asked if the Task Force would be willing to look at those capital costs.
Special Committee of the Whole, 8/9/2011, Page 2
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
Diane Harper, Lummi Island Ferry Task Force member, stated the resolution establishing
the Task Force asked the Task Force to consider the capital needs of the Lummi Island ferry
system. They did look at capital, but the members don't have much expertise on it. Their
recommendations on capital have to do with investigating new options.
Mann stated that regarding the elasticity of demand, there are differences between
discretionary expenditures. Ferry use by the residents isn't discretionary. They depend on the
system. He imagines that the demand would be less elastic.
Weimer stated he thanks the Task Force for their work. The presentation today is very
clear. The Council will have to struggle with the problem of incentives versus disincentives for
capital and operations. The recommendation is that revenue from a ferry district would go towards
operations. However, the Council is hearing that revenue from a ferry district should go toward
capital costs.
Crawford asked the Public Works Committee to further discuss this report.
Brenner stated that is fine. She attended a couple of the Task Force meetings. She was
very impressed. They worked well together.
Kershner stated she thanks the Task Force. This group became organized right away,
identified their tasks, and got down to work. They did a wonderful job of including the community,
took public input at every meeting, and did well communicating with each other. She presented
each Task Force member with a certificate of appreciation from the County Council.
Crawford stated the Council will begin reviewing the recommendations this fall.
OTHER BUSINESS
There was no other business.
ADJOURN
The meeting adjourned at 1:28 p.m.
The Council approved these minutes on September 13 , 2011.
ATTEST:
WHATCOM COUNTY COUNCIL
WHATCOM COUNTY, WASHINGTON
Please contact the Council Office to obtain an
official, signed copy:
360- 676 -6690 or council&o.w hatcom .wa.us
Special Committee of the Whole, 8/9/2011, Page 3