Public transportation systems like Kitsap Transit are a part of everyday life in the community, even to residents who don’t use their services. Kitsap Transit carries more than 13,000 people to work, school and activities each weekday, easing congestion on roadways and marine highways.
To help understand the economic benefits of fast ferry services across Puget Sound, Kitsap Transit engaged a nationally-recognized economics analysis firm with expertise in evaluating the link between transportation investments and economic benefits. They estimated the economic benefits of just the commute-level service to be over $7.5 million in annual travel savings and about $1.8 million in annual general economic benefits such as greater employment opportunities for Kitsap residents and an improved business environment. They also predicted one-time real estate benefits of nearly $10 million.
Others have studied the economic benefits associated with public transportation investments. In 2014, the American Public Transportation Association commissioned a study of the economic impacts of transportation. They determined that over a twenty-year period, the effect of transportation investments on the economy is in the range of 3.7 times the amount being spent annually. This study showed that public transportation investments can have significant impacts on the economy increasing both business productivity and household disposable incomes while also providing direct travel time savings for both public transportation users and other travelers.
Kitsap Transit will manage the fast-ferry system, setting service schedules and fares locally based on the needs of Kitsap residents. Kitsap Transit will contract with the King County Marine Division, operator of the Water Taxi to West Seattle and Vashon Island, to operate the ferries.
The frequency of departure varies depending upon the distance traveled. Below are the estimated departure frequencies for each route.
From October through April the fast ferries will operate during the morning and evening commute periods Monday through Friday. From May through September additional runs will be added to include midday, evening and Saturday service. This is the maximum level of service than can be funded for start-up at the proposed tax rate. As ridership grows and more fare revenue is generated, additional service can be added through out the year.
Ridership and revenue forecasts are critical to the fast ferry business plan. Kitsap Transit hired a company with experience in public transportation forecasting and planning to prepare the projections. They developed a model specifically for ferry service across Puget Sound that considered current ferry ridership and commute patterns, travel time and costs, and demographic information such as population and employment data.
The model predicts ridership and revenue by route, reflecting KT’s proposed service schedule for each route and the proposed fares. This means that the predicted ridership is tailored to the current proposal and does not simply rely upon the ridership from past fast ferry services.
Kitsap Transit reduced the revenue forecast by 25%, to allow for economic uncertainty, slower ridership growth and to create a financially responsible business plan.
This sales tax source can only be used to support ferry service and cannot be used to fund new bus service. However, Kitsap Transit proposes to use the new funding to pay for operation of the existing Port Orchard and Annapolis foot ferry, which will free up to $1.5 million of current funding that can be re-directed to bus service.
This is a difficult question to answer without the service actually in operation. To test the fast-ferry service’s sustainability over 20 years, the financial model relies on “worst-case” assumptions: The model overestimates expenses (i.e. fuel at $4 a gallon) and underestimates ridership by 25 percent. The projections also assumed no growth in ridership over time.
As a result, the actual subsidy per rider may turn out to be significantly lower than the projected subsidy shown in our financial plans.
In 2021, the first full calendar year when all three routes would be in service, we project a subsidy per rider of $18.45. But if we adjust for the impacts of inflation, ridership and today’s fuel prices, the subsidy is far lower:
*Even at 100% ridership across all three routes, or 778,241 riders annually, that total is less than the 876,000 riders Washington State Ferries carried on just its Bremerton-Seattle passenger-only ferry service in 2000.
In summary, a normalized range for the subsidy per rider in today’s dollars would be less than $8. That would translate to passenger fares covering about 46 percent of the annual cost of operating the fast-ferry service, a higher recovery ratio than for bus service. Under our published financial plan, which is based on worst-case assumptions, passenger fares on fast ferries would cover about 28 percent of the annual operating cost.
Both Washington State’ Ferries (WSF) fast-ferry routes, Bremerton and Vashon, were popular with riders. Ridership on WSF’s Bremerton fast ferry peaked at 876,000 riders in the year 2000. Today the Vashon commute service route, operated by King County, carries over 200,000 passengers a year comparable to the projected ridership for KT’s Bremerton commute service.
Two factors led to WSF discontinuing fast-ferry service — loss of motor vehicle excise tax funding and questions about the beach impact of fast ferries. WSF chose to focus on auto ferry service, leaving passenger ferry service to local agencies.
Responding to community appeals to keep fast-ferry service, the State legislature granted local governments the authority to operate fast ferries and levy taxes to fund them. The Vashon route was turned over to King County leaving the Bremerton, Southworth and Kingston routes to local governmental agencies in Kitsap County. As the only county-wide public transportation provider, Kitsap Transit assumed responsibility for pursuing fast-ferry service between Kitsap County and downtown Seattle.
The demand for fast ferry service remains high in Kitsap County. Over the past decade KT has conducted extensive research to design a boat that can operate at high speeds in Rich Passage without harming the shoreline and has developed a business plan and long-range strategy for sustainable fast ferry-service.
Private ferry operators have tried to operate fast-ferry service in Puget Sound but discovered that they can’t make money. The cost of operations exceeds the revenue collected, even with higher fares.
To attract and retain riders a fast-ferry service must have a sustainable funding source. Nearly every study of ferry service in the Puget Sound region has clearly identified the need for public subsidy to ensure on-going reliable, fast-ferry operations.
Kitsap Transit evaluated the option of contracting with a private company to operate the service. The analysis demonstrated that a private contract operator would not be any less expensive that contracting with the King County Water Taxi.
Passenger-only ferries were part of WSF’s long-range plan to manage growing demand for fast and convenient cross-sound service until initiative 695 approved by voters in 1999 cut deeply into WSF’s finances. The legislature subsequently redefined WSF’s mission to focus on vehicle ferry service and shifted the authority to operate passenger-only ferry service to local governments.
WSF’s passenger-only ferry service in the 1990s generated significant new ridership. Kitsap Transit’s fast ferry is also expected to attract new riders
Still, Kitsap Transit’s projected long-term fast-ferry ridership is less than 6 percent of WSF’s 2015 ridership, which continues to grow.
WSF service is driven primarily by demand for vehicle transport. Kitsap Transit’s fast ferries are unlikely to do real harm to WSF’s vehicle ridership but will provide more travel choices and create new maritime jobs.