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HomeMy WebLinkAboutPublic Works September 27 20051 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 DISCLAIMER: This document contains the Whatcom County Council or Committee minutes, as approved. However, unless an attested signature page is attached, they are not the final approved minutes. WHATCOM COUNTY COUNCIL Public Works and Safety Committee September 27, 2005 Committee Chair Barbara Brenner called the meeting to order at 1:30 p.m. in the Council Chambers, 311 Grand Avenue, Bellingham, Washington. Present: Absent: L. Ward Nelson None Sam Crawford Also Present: None COMMITTEE DISCUSSION 1. PRESENTATION REGARDING FERRY SYSTEM COSTS AND RATE - SETTING POLICY (AB2005 -357) Jeff Monsen, Public Works Department Director, submitted and presented a presentation (on file). There are seven parts to the system, from the Gooseberry Point parking area through to the Lummi Island parking area. Nelson asked the portion of the Gooseberry Point dock area that belongs to the County. Monsen indicated the area on an aerial photo that the County leases from the Lummi Tribe. He also indicated on the photo the areas available for parking during ferry dry dock. Brenner asked if parking is still available on the water side of Lummi View Road, where the ferry terminal is. Monsen indicated the parking locations on the photo. Brenner asked if vandalism to cars parked during dry dock is still an issue. Ken Richardson, Accounting Supervisor, stated they had no vandalism this year. There are about 90 parking spaces during regular times of the year. During dry dock, there are 378 parking spaces, which is still not enough. Those 90 spaces fill quickly during an event. Most nights, about 60 spaces are full. Monsen continued the presentation regarding total system costs. Each of the seven components of the system has six system operating costs related to it, however, the term "operating costs" doesn't normally include capital expenditure, financing, or depreciation. Those six system operating costs for each of the seven components of the ferry system are shown in a matrix. Public Works and Safety Committee, 9/27/2005, Page 1 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 42 43 44 45 46 47 DISCLAIMER: This document contains the Whatcom County Council or Committee minutes, as approved. However, unless an attested signature page is attached, they are not the final approved minutes. Crawford stated depreciation and capital expenditures seem to be connected together. He asked if depreciation is calculated for the old ferry, and if depreciation is ultimately an accounting function of a replacement cost. Monsen stated depreciation is applied in the rate recovery today. They haven't purchased a new boat, so they haven't seen bigger costs. However, they have put in new engines. The rental rate charged includes depreciation of those capital investments. They are not collecting money to replace the boat. Brenner asked if they are collecting money to service the boat. Monsen stated that is correct. They are not putting money aside for a new boat. When the County gets a new boat, they will include in the rate structure the depreciation for a new boat in the future. Crawford asked about if a new paint job may not be fully depreciated, for example. Richardson stated the paint would be a maintenance expense. Capital expenses are radars, engines, and other major components that are depreciable. They will be included in the rental rate for ferry depreciation next year. Monsen stated they deal with capital, financing, and depreciation separate from fare setting. They focus on the daily running expenses, maintenance expenses, and administration for the entire system except the docks when setting fares. Other jurisdictions include all seven of the system components. Their fare box recovery includes depreciation in their rates. Brenner asked how Whatcom County is different from the State. Monsen stated that per the code, Whatcom County would include depreciation in the rates, except for docks. The State includes the docks, but not depreciation or any other capital expense. Brenner stated it seems like the County should be the same as the State or the other counties. Monsen stated they all need to be on the same formula for calculating operating cost, fare box recovery, and other things. If Whatcom County changes how it calculates operating costs, it will influence the rates. Now, Whatcom County is at about 50 percent recovery rate. When a second boat is in service and without a rate change, there is a gap. He looked at operating costs using current definition and also a new definition to include the docks and exclude depreciation. Both scenarios are close to being the same because of the new boat. Nelson asked if they are looking at the operating cost for new boat as well as old boat. Monsen stated he is. Nelson asked if those fare rates are for two boats. Monsen stated the influence of the second boat on the rates is not small. Public Works and Safety Committee, 9/27/2005, 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 42 43 44 45 46 DISCLAIMER: This document contains the Whatcom County Council or Committee minutes, as approved. However, unless an attested signature page is attached, they are not the final approved minutes. Brenner stated she would like to see how it changes if they get rid of the old boat. Richardson stated that in general, if they did not have the Whatcom Chief, the County would save about $100,000 per year, which is not much. Brenner asked to have a graph showing that information. Monsen stated that even a rate change of five or ten percent is large to the community. Crawford stated that without the second boat, the reduction to the rates would be about seven percent. Richardson stated that there is a difference between expected collection at current fares and the fare they would need to have to get 55 percent of about $500,000. That $100,000 would be about 20 percent of the gap between what they collect and what they should collect at 55 percent. Monsen stated that is a much smaller percentage of the overall system costs. Brenner stated the gap is where people are going to get upset. Richardson stated it's a little less than five percent of the cost of the total system they'd be operating at that time. Brenner stated she didn't think people will feel better when the rates go up as high as they have to go. Monsen stated assuming the County stays at a 55 percent recovery rate and defines operating costs in a new way, there is an existing shortfall from 55 percent. The County will need a five percent increase simply to meet that policy goal. Over the next five years, as the County finishes the parking projects, acquires a new boat, and continues to hold on to the Whatcom Chief, they have a $1.1 million shortfall in those five years. That is a five to ten percent increase over each of the next five years. If put in place all at once today, it would have to be a 30 percent increase in fares. Nelson asked how much of the increase is attributable to the new parking lot on Lummi Island. Monsen stated it is not much now. The calculation now does not include the recovery of the capital expenditure. The repair and maintenance of a parking lot is not a big cost, unless an overlay or refurbishment is needed. He read the slide on summary and next steps. To be more businesslike, create an independent enterprise fund for the ferry to track costs. The first three items on the Summary and Next Steps slide are where they are going when setting fares. Define how big a gap in costs they are going to have. Public Works and Safety Committee, 9/27/2005, Page 3 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 42 43 44 45 46 47 DISCLAIMER: This document contains the Whatcom County Council or Committee minutes, as approved. However, unless an attested signature page is attached, they are not the final approved minutes. He read a slide on comparing the cost of the new ferry to a bridge replacement. Both assume a life of 40 years. Brenner asked if the comparison uses the most expensive bridge. Monsen stated it does not use the most expensive bridge, but the bridge with a use most like the use of the ferry. The Hannegan or Slater Road bridges are more expensive than High Bridge, but they have many more users. The amount shown for cost per vehicle does not include the capital cost, only routine operating and maintenance expenditures. Brenner asked if another bridge comparison would be less per vehicle because so many vehicles would use it. Nelson stated that it would. Monsen stated a bridge like the one on Slater Road would be comparable in capital cost to the ferry. However, there are many more users, so the cost per vehicle would be less. Brenner stated she would like to see a comparison with a more major bridge. Richardson stated the cost to maintain High Bridge is quite high, compared to other bridges in the county. Brenner asked if it's the ferry operating costs that are so expensive for the County. Monsen stated it is. Crawford stated this is an excellent time to let the community know that this is a road in the road system, but that it is a very expensive portion of the road system. Brenner asked if the cost to operate and maintain the ferry for a year is $1.3 million. She asked the cost if they didn't get the new ferry. Richardson stated the annual operating cost would be more than that. That is the cost today. Fuel and crew costs are going up. All their costs will go up three to five percent over the next five years. Brenner stated this information is good. They're talking about the boat as it is. She asked if they calculated this information for the new boat. Richardson stated they have not. They wanted to use known costs. Brenner asked if there is a big percentage difference in what it will cost the County to run the new ferry, compared to the Whatcom Chief. She asked if the cost of operating the new boat will be significantly higher. Richardson stated the operating cost of the new boat only will be higher. They are running a 40 percent bigger boat that burn run more fuel and may take more crew. However, they are expanding service more than they are expanding cost. It won't cost 40 percent Public Works and Safety Committee, 9/27/2005, Page 4 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 42 43 44 45 46 47 DISCLAIMER: This document contains the Whatcom County Council or Committee minutes, as approved. However, unless an attested signature page is attached, they are not the final approved minutes. more to have the bigger ferry. The costs won't be the same as running a smaller boat. Brenner asked if the increase will be closer to 40 percent than nothing because there will be more runs. Richardson stated they will probably have fewer runs with more people and more cars. Brenner asked if it will cost significantly more per vehicle. Monsen stated that in these investments, they are putting a lot of money into a jump in capacity, which is consumed over time. The first day, the cost per vehicle will go up substantially. As more vehicles use the boat, the costs per vehicle will go down, probably at a rate more than the inflation rate for operating the vessel. There has been so much talk about the cost of the boat. The increases here aren't just to the boat, but to the entire system. The one big change about the new boat is that they may not need more crew, however three crew on the boat can't sell tickets as they go across, with twice as many vehicles. The County would have to have a fourth crew person to do that, or the County would have to do ticket automation on land, which they should do now anyway. Some of the costs along with a new boat they would incur anyway with this boat. Richardson stated the cost per vehicle will be at its lowest point right now, when the capacity they have is completely consumed. They are at capacity right now. As soon as they expand the amount of available product per vehicle, the cost will expand. Brenner asked the number of lots left on Lummi Island that can be developed. Richardson stated he couldn't say. One constant debate is land use versus transportation planning. Some people say that a bigger boat means they can develop more land. Others will say that the land is being development so they need a bigger boat. The fact is, the majority of residents out there said they wanted more capacity, so that's where the County has headed. Monsen stated that if all the lots on Lummi Island were developed, the new boat is not big enough to provide the current level of service. Brenner stated that's good. The County probably won't develop everything out there that it can. She asked where the Lummi Island residents are and why they are not at this meeting. Monsen stated they will be here as soon as the County puts forward a rate proposal. Richardson stated the residents are aware of this discussion. He's talked to several residents out there. Brenner stated she would like the Public Works Committee to have a meeting out there to show the residents these graphics and comparisons. Give the residents a couple of scenarios about the cost. Then, request that the Executive's Public Works and Safety Committee, 9/27/2005, Page 5 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 42 43 44 45 46 DISCLAIMER: This document contains the Whatcom County Council or Committee minutes, as approved. However, unless an attested signature page is attached, they are not the final approved minutes. Office appoint a committee of the residents about where the breakout should happen and to define who should pay a percentage of what. Nelson stated the councilmembers are elected to make those decisions. They need to go out there and educate and talk to the people. Then the Council will have a public hearing process. Brenner stated that the residents should have a say in how fare money is distributed, but not the recovery percentage. Crawford stated the community's transportation committee dissolved when it no longer agreed with the community board. The County has a lot of survey data available from the recent past. It seems that this change is to go with the way the State calculates rates, adding the cost of the docks, which will represent a slight increase. They may want to ask if 55 percent is still the target recovery rate. The committee generally agrees to have a system of calculation that is similar to the State's. The whole county will be involved in subsidizing this system somehow. They just need to determine what level that will happen. He wouldn't use the Slater Road because the cost would be so much less. bridge because they know those costs. or another big bridge for comparison, Instead, use the costs for the Frost Road Monsen stated another option is to build the depreciation costs into the calculations. That will raise the cost per vehicle for both the bridge and the ferry. If they use Frost Road as a comparison, the cost per vehicle is low unless they add the cost of replacement. The operation costs for something like Frost Road is really small. Crawford stated it is a low -use road. He supports whatever the staff thinks is the best comparison. Brenner asked staff to also do comparisons for the Frost Road and the Slater or Hannegan bridges. Have several comparisons available that people can see. (Clerk's Note: End of tape one, side A.) Nelson stated the concern is how to collect the 55 percent. Brenner stated add a monthly pass option. Richardson stated that if they decide users will pay 55 percent of basic operational costs plus the enterprise fund, then they must decide how the exact cost equals 55 percent and who should pay. There are a lot of options for fare structure. They have information to allow them to consider different rate scenarios. Staff is looking for a way to have a five -year plan, and not come back every year for five percent increases. Public Works and Safety Committee, 9/27/2005, Page 6 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 42 43 44 45 46 47 DISCLAIMER: This document contains the Whatcom County Council or Committee minutes, as approved. However, unless an attested signature page is attached, they are not the final approved minutes. Brenner asked if staff thinks it's worthwhile to create an advisory committee to come up with a breakdown on where the 55 percent is spent. Monsen stated it's not a waste of energy. They got good feedback from the transportation committee. However, advisory committees only work as well as how well they represent the community's interests. The big challenge has always been substantial doubt from the community on whether the transportation committee represented the community truly. An advisory committee will help refine options, but it won't replace a dynamic public hearing process. Having a community advisory committee will help the County narrow the focus, but won't bring them to an answer. Richardson stated they wouldn't know who to invite to get good, solid, accepted feedback. There are a lot of organizations and individuals on Lummi Island who don't agree with each other. Over the next few months and years, he will try to come up with a group to talk about transportation issues on Lummi Island. It's not something that can happen in five minutes. It will take a lot of relationship - building. Monsen stated it will be challenging to create a committee that will have enough standing in the community that the community will accept the outcome. However, any committee will help refine the options. It won't save any energy when engaging the community to set the rate. Crawford stated the County Council is the appropriate committee. Nelson stated he would rather the residents come to the Council and talk to them directly. Richardson stated that if the Council agrees with the costs and the percentage the users will pay, then 80 percent of the argument is gone. The discussion simply becomes who picks up certain pieces of the pie. That's an argument amongst the users, not the County. The Council will get input on it from the residents. Brenner moved to accept these findings as accurate and to collect 55 percent in fare recovery. She agrees with the costs given and the percentage of collection. Crawford asked if the motion incorporates the dock costs as part of the operating costs. Brenner stated it does. Crawford suggested a friendly amendment to not specify 55 percent cost recovery. Brenner stated she wanted to see the cost recovery at 55 percent. She did not accept the friendly amendment. Public Works and Safety Committee, 9/27/2005, Page 7 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 42 43 44 45 46 47 DISCLAIMER: This document contains the Whatcom County Council or Committee minutes, as approved. However, unless an attested signature page is attached, they are not the final approved minutes. Crawford asked if the motion is to include the dock costs and to request staff to provide a fare breakdown at a 55 percent cost recovery. Brenner stated that is correct. That is her motion. Monsen stated they can compare a cost recovery of 55 percent with other percentages if they speak in terms of average cost per user rather than a rate formula. Brenner asked if 55 percent is what the County has been collecting. Monsen stated it is. There are two parts. One is the definition of system versus capital. The second is the enterprise fund. Each year, they calculate what the recovery rate has been. It's never been exactly 55 percent. It ranges around 55 percent. Once they do the calculation, they know what the number was at the end of the year. With the enterprise fund, anything collected over 55 percent is put to something in the future. If under 55 percent is collected, then they will need to look to get back on track. Over time, keep the recovery rate at 55 percent. Richardson stated the cost is the same at all recovery percentages. The difference is the County road fund subsidy. Nelson stated the motion should be approval of items one through four on the Summary and Next Steps slide. Monsen stated that is correct. An enterprise fund influences the fare box rate structure. Brenner agreed. Make sure the rate structure of 55 percent includes information on what everyone would pay if everyone paid the same amount. That way people would understand what happens if everyone pays the same. Richardson stated he would calculate the cost to move a person. Nelson asked if parking is included in the true operating costs. A walk -on passenger may use parking. Richardson stated the calculation would include everything except capital expenditures, depreciation, and interest for all seven components of the system. Brenner restated the motion to move forward with all four steps on the Summary and Next Steps slide, with a request that staff provide a breakdown in rates if every body paid the same fare. Monsen stated that if the first three items on the slide are agreed upon, staff can determine ways to create a rate structure. Motion carried unanimously. Crawford asked if there has been progress on negotiating to get the Whatcom Transportation Authority (WTA) bus schedule synchronized with the ferry. Public Works and Safety Committee, 9/27/2005, Page 8 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 DISCLAIMER: This document contains the Whatcom County Council or Committee minutes, as approved. However, unless an attested signature page is attached, they are not the final approved minutes. Richardson stated the issue is not that the bus leaves five minutes before it should. The issue is that the people aren't taking the right ferry. There is always a bus to catch if they take the right ferry, and there is always a ferry to take coming off the bus. The problem is that the waiting area for passengers is not conducive to doing so. Therefore, they don't want to spend 20 to 45 minutes waiting for the bus. There is a radio on the ferry. The boat captain can call the bus driver and ask them to wait. The shelter size is small. Monsen stated staff is looking at that shelter seriously. They should make some adjustments in the level of service to pedestrians, to make those alternatives desirable. The State has a recovery rate policy of 80 percent, not 55 percent. When he talks about State financial help with ferries, he can't ask for or expect to get more than 20 percent. Brenner stated that's the way it's always been. OTHER BUSINESS There was no other business. ADJOURN The meeting adjourned at 2:40 p.m. Jill Nixon, Minutes Transcription ATTEST: Dana Brown - Davis, Council Clerk WHATCOM COUNTY COUNCIL WHATCOM COUNTY, WASHINGTON Barbara Brenner, Committee Chair Public Works and Safety Committee, 9/27/2005, Page 9