Dec. 12, 2007

Ferries funded in 2003 still have not been built or designed
New ferries were scheduled for 2008 delivery

During the recent special legislative session, regularly scheduled committee work continued aside from the primary focus of state lawmakers to reinstate Initiative 747.

The Joint Transportation Committee held a hearing on November 28 to discuss the failure of the state to build four new ferries approved in 2003. The following is an exchange between Deputy Republican Leader Rep. Doug Ericksen and state Transportation Secretary Paula Hammond on the issue.

Ericksen: "In 2003, when we passed the Nickel Package [gas tax increase], we put $285 million into four new ferry boats – and the first one was to be delivered in 2008 with the finish of that by 2010. Now here we are in 2007, 2008 coming up, and my understanding is we are still in design phase?"

Hammond: "We are nearing design phase…"

Ericksen: "Nearing…what happened?"

Hammond: "The consortium…last year you passed a law that agreed we could because we were having trouble finding a procurement process that was going to work. We have a lawsuit pending, we have been plagued with lawsuits on this procurement process, um, and we have also had the problem with, uh, when we did our financial screening of the eligible Washington builders in a build it in Washington program, we were faced with one bidder. And that is why we came back to you last year and asked for a different kind of opportunity for a procurement process which you granted, um, and we are now working with a consortium of boat builders, Todd, Nichols and Martinac, to build up to four 144’s. And I am saying that now because as I look at our financial situation, we are really questioning whether we can afford three or four, um, but we are, uh, we have terms and agreements for the first phase of the contract ready to go. I have not signed it yet with recent events we are questioning how we’re going to move forward, but our intent is to move forward with that design process, uh, and get I think the first boat delivered by 2010? Steve, is that the path we are on? Summer of 2010?"

Ericksen: "Is the $285 million still there?"

Hammond: "Yes…well it, it, yes. I hesitate because some of that money has been spent as we moved into the procurement of the, um, propulsion systems and some pre-design work we’ve done."

Ericksen: "Should we be able to get the ferries done quicker now...was it phased-in money before so there was a time lag?"

Hammond: "There was a cash flow…"

Ericksen: "So now we should be able to get it all done right away?"

Hammond: "Uh, what do you mean? I’m not sure…"

Ericksen: "You had a cash-flow issue for the first four, but since those are supposed to have been done by 2008, shouldn’t the money now be available so those should be constructed quicker?"

Hammond: "In the 07 budget we adjusted the cash flow based on the path we’re on now. But one of the questions we’re asking ourselves is, if we now need to build two or yesterday’s concept of three smaller steel-electric replacements, if we need to do that and the time, uh, issue is so prevalent, do we move those ahead or how do we insert them in a cash flow way, uh, to the other procurement process? So those are the questions we are asking right now."

Statement from Rep. Doug Ericksen:

"In 2003, I helped construct and voted for a transportation budget that included funding for four new car ferries to replace our aging boats. Those ferries were supposed to be online beginning in 2008. The state Department of Transportation has failed – and the current leadership in Olympia has failed. It is vital that the state start regaining the trust of the people by keeping the promises it has made."

Timeline for ferry problems

• April 27, 2003 – Legislature passes Nickel Package gas tax increase with $285 million to replace the four Steel Electric boats. The first vessel is scheduled for delivery in October 2008.

• Dec. 3, 2003 – Washington State Ferries (WSF) issues Request for Proposal for prequalification to build four new ferries.

• Feb. 11, 2005 – WSF disqualifies Martinac from bidding on the vessel construction contract.

• Feb. 18, 2005 – Martinac appeals disqualification.

• June 1, 2005 – State Administrative Law Judge rules in favor of Martinac and says the state should not have disqualified the company from bidding.

• June 22, 2005 – State appeals judge’s ruling.

• Sept. 17, 2005 – State reverses itself and does not act on the appeal. Martinac is allowed to bid on the contract.

• March 8, 2006 – Legislature passes Supplemental Transportation Budget increasing the size of the four boats from 133 to 144 cars. Costs increase by $13.8 million.

• April 21, 2007 – Legislature passes 2007-09 Transportation Budget. Costs to build the four boats increases $25.7 million and delivery of the first boat is delayed until 2010.

• Sept. 27, 2007 – WSF says $3.6 million spent on emergency repairs for Steel Electrics.

• Oct. 27, 2007 – WSF plans for the new boats call for not replacing two Steel Electric vessels (contrary to the original plan).

• Nov. 20, 2007 – WSF orders all four Steel Electric vessels tied up, shutting down service on the Port Townsend - Keystone route.

• Nov. 21, 2007 – Gov. Gregoire says lawmakers need to make replacing the four 80-year-old ferries a top priority.

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For more information, contact: John Handy, Assistant Director: (360) 786-5758