Washington State Magazine

Winter 2003


Winter 2003

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In This Issue...

Features

Washington's marine highway :: Washington state ferries appear in a million tourists' photos. But they are also a vital link in the state's transportation system. Mike Thorne '62 aims to keep them that way—in spite of budgetary woes. by Pat Caraher

On call :: Student firefighters at Washington State University have a long tradition of protecting their campus. by Pat Caraher

Boeing's Mike Bair & the 7E7: Dreamliner or paper airplane? :: Wherever Boeing ends up building it, the 7E7 will be lighter, more fuel efficient, and more comfortable. It's up to Mike Bair '78 to get this new airplane off the ground. by Bryan Corliss

A bug-eat-bug world :: If you can put other insects to work eating the insects that are bothering you, everybody wins. Except the pests. by Mary Aegerter

Putting on the Ritz: American management methods meet European hotellerie :: The child of Swiss peasants, no one would have expected César Ritz to become the hotelier of kings. But then, who would have expected WSU to add American business management methods to the fine art of European hotellerie in the town where Ritz got his start? by Andrea Vogt

Panoramas

Departments

:: A SENSE OF PLACE: Pacific Northwest sagebrush steppe

Tracking

Cover: Washington State ferry. Read the story. Photograph by Laurence Chen.

Features

Washington's marine highway

by | © Washington State University

"The ferry system has allowed the state to grow and prosper. It will become more important in the future, providing access to where people choose to live and work, and where housing is available." –Mike Thorne, Washington State Ferries director and CEO

Washington State didn't offer a ferry service until 1951, although a handful of private companies known as "The Mosquito Fleet" transported passengers and goods across Puget Sound in the early 1900s on small steamers. By the late 1920s, the industry consolidated into two companies. In 1935, the Kitsap County Transportation Company was forced out of business by a strike, leaving the Puget Sound Navigation Company, which became the Black Ball Line, to provide the bulk of the service.

In the late 1940s, labor unions representing the ferry workers successfully struck Black Ball for higher wages. The ferry line petitioned the state highway department to allow a 30 percent tariff increase. The request was denied. Black Ball tied up its boats, bringing much of the cross-sound ferry service to a halt.
Black Ball eventually sold its ferries and terminals in 1951 for $5 million to a newly created Washington Toll Bridge Authority–now Washington State Ferries. WSF intended to provide temporary service until a network of bridges could be built connecting Puget Sound's east and west sides. By 1959 the legislature rejected the plan for bridges. WSF continued to ferry people and vehicles across the sound as part of the Washington State Department of Transportation.

Sailing into the 21st century

Today Washington operates the largest ferry system in the country. Twenty-nine ferries ply the inland waterways of Puget Sound. The boats deliver nearly 27 million passengers annually to 20 different terminals in eight Washington counties plus the province of British Columbia.

For daily commuters, commercial users, and tourists, Washington's marine highway provides a critical link between the greater Seattle area and expanding communities west of Puget Sound on the Kitsap Peninsula, as well as to Vashon, Kitsap County, Whidbey Island, and the San Juan Islands.

During fiscal 2001, WSF transported 11.5 million vehicles and 26.6 million riders. This compares with 28.4 million passengers at Seattle-Tacoma International Airport and 23.5 million patrons nationwide served by Amtrak during the same period.

Sailing into the 21st century, Washington State Ferries appeared to be in good financial shape. Reserves exceeded $110 million. Referendum 49, approved by state taxpayers in 1998, designated funds for needed passenger-only ferry service to Seattle from Kingston and Southworth. In fiscal 2001, 19,700 walk-on passengers, or 27 percent of ferry riders, benefited from the service. Referendum 49 allowed for the transfer of monies from the motor vehicle excise tax (MVET) to the state highway system, and the legislature appropriated a record $289 million of that to WSF.

Things were to change dramatically. In November 1999 voters approved Initiative 695. The backwash rippled through state transportation, reducing funds for roads, highways, bridges, and the ferries. In effect, I-695 abolished the bulk of the MVET, including an expected $111 million designated for the 1999-2001 biennium to help finance the expansion of the passenger-only ferry service. The plan to enhance that service had to be scrubbed. The timetable for replacing aging ferries and terminals also was pushed back.

Thorne takes the helm

The task of righting the ship has fallen to Mike Thorne. He was hired nearly two years ago as WSF director and CEO. His credentials include more than a decade as director of the Port of Portland and 18 years as an Oregon state legislator. He grew up on a large wheat ranch in Pendleton, Oregon, and still keeps a hand in the operation that his son now runs. Thorne earned a degree in agricultural mechanization from Washington State University in 1962.

Before he came aboard, WSF was instructed to take a close look at its way of doing business, specifically the relationship between the cost of providing service and the income generated from riders. In 2000, the legislature created the Joint Task Force on Ferries comprising legislators, citizens, ferry management, and workers. The group was charged with examining the WSF operation and recommending its future direction. One recommendation was that WSF increase fares throughout the system to 80 percent of operating cost, and maintain the existing level of service. Historically fares had provided about 62 percent of operating costs.

"We can't capitalize the ferry system from fare box recovery alone," says Thorne. He wants WSF to be "customer-minded and business-oriented."

In September 2002, nine months after he was hired, WSF introduced a new business and capital-funding plan, dubbed the "5+5+5" plan. It calls for the ferry system to cut costs by 5 percent, increase general fares by 5 percent, and generate 5 percent in new revenues via a comprehensive retail, marketing, and advertising program. After designing and implementing the plan, Thorne estimates that fares should cover approximately three-quarters of operating cost by the end of 2003 and near 90 percent by 2008.

Had Referendum 51 not failed in November 2002, it would have provided approximately $750 million for new ferry construction over 10 years. But with the 5+5+5 plan in place, Thorne thinks the ferry system is headed in a positive direction.

"We can do better."

WSF is looking at introducing small retail businesses, like gifts and books, and expanding concessions to include food and beverage items not currently available from galley service or vending machines on the ferry. "What best fits the needs of our customers," Thorne said in late July from his office near the Seattle Center.

He's confident savvy marketing will provide better visibility for WSF and attract more riders, both in-state and beyond.

"When you are pushing hard to make financial goals, it makes good sense to advertise on the ferry itself and in the terminal, if done discreetly," he says. Travel packages could be developed as an incentive for people to ride the ferry during non-peak-hour service to the San Juan Islands, or elsewhere. Ferries on some routes run one-fourth full. Passengers could be added without increasing costs to WSF.

Thorne says two core principles figured in decisions to reduce service: WSF wanted to impact the fewest number of riders and make changes only where riders have other transportation. Three vessels were idled in June 2000, before his watch. Ridership declined slightly in 2001 and likely will continue–without additional promotion–due to sustained cuts in service and ongoing fare hikes.

Immediately after I-695 passed, WSF conducted a thorough review of administrative and staff positions. Management and support staff were reduced by 29 percent, including 43 positions from the management side, representing 2.4 percent of WSF's 1,800 employees.

"We are at a level we would not want to go much [below]," Thorne says. "I think we can find efficiency in other areas of support." He believes basic services are being met, and most riders agree; but, he says, "We can do better."

Statistics show that ferries completed 99.6 percent of 178,500 scheduled runs in fiscal 2001, the best record dating back to 1966, when WSF started tracking the reliability of its service.

Ferry schedules will continue to be reviewed. For example, management concluded that more than an acceptable rate of overtime was being logged on one of the Seattle-Bainbridge runs. The situation was remedied by adjusting the schedule for that route. Keeping WSF running on time, with safety and security, is all-important, Thorne says. "People use the ferry system as a way of supporting their livelihood."

While safe and serviceable, some ferries need to be replaced. The average age of the fleet is 30 years old. Four ferries were built in 1927. Their commercial application is "far outdated." They were designed to haul cars built in the 1920s and '30s, not wide-bodied trucks and long trailer rigs loaded with chips and logs.

Ferry terminals, too, are getting to the point where their pilings and underpinnings will soon be beyond usefulness. Long-term plans call for replacing several terminals on Puget Sound. Terminals at Edmonds and Mukilteo are planned as connection points for rail service extending into Seattle.

Despite the serious financial challenges facing WSF, Thorne remains positive. He's confident goals will be met, that riders will continue to find the service they need and expect. "If I hadn't believed that," he says, "I probably wouldn't have come here in January 2002."

Thorne's office is close to Puget Sound. He rides the ferry. He intentionally schedules meetings that take him to communities served by the WSF. "I go there so people don't have to come to me." During his marine travels, he observes WSF employees carrying out their duties and sometimes visits with patrons.

What commuters say

Even in mid-afternoon, one senses the pace picking up at Colman Dock. Foot passengers begin to arrive, first in a trickle, then in a stream. Some grab the Seattle Times from a bank of newspaper vending machines in the elevated terminal. They flash their tickets while passing through the gate or pay their fare at one of three ticket booths leading to the large, bench-filled waiting room.

Below, on the landing north of the terminal, vehicles feed into lanes 43 through 58, nine-deep, in parallel rows. The arrival of the Wenatchee from Bainbridge is still 15 minutes away. A Mack truck with an image of the Statue of Liberty painted on the side of its black hood stands out. It is burdened with bales of green hay. Ahead of the waiting vehicles, nine bicyclists pinch in near the steel ramp that will be lowered to meet the ferry.

If he had been in the terminal, Thorne might have met commuters like Mike Crotty, dressed in gray shorts and a matching T-shirt with "O'Dea Football" printed on the chest in purple letters. A teacher and coach at the high school on top of Seattle's First Hill, he makes the nine-block hike to and from the ferry each day. He commutes from Bremerton like some of his students, others of whom come from Bainbridge.

Crotty used to live in Des Moines. Now he prefers "the slower pace of life" on the Kitsap Peninsula. "The cost of living is less, even with the commute," he says.

Tracy Hagbo is a WSF information agent at Colman Dock. Her work finished, she takes in the foot traffic on the concourse outside her office through dark sunglasses. She lives in West Seattle. "When housing got high over here, people sought cheaper housing on the Kitsap Peninsula," she says. "They've still got to get across the water. That's the bottom line."

Another woman on the Seattle-Bainbridge run commutes three days a week–"a little over an hour door-to-door." It beats fighting freeway gridlock on I-5. One-third of her commuting neighbors feel the same way. She came to Seattle from Chicago, but moved to Bainbridge Island three years ago. The major appeals–a smaller community, more house and a little more property for the money, and quality schools. Even with two fare hikes in 18 months, the cost of riding the ferry is comparable to taking Seattle's Metro buses, she says.

Being tied to the ferry schedule, particularly missing a ferry or finding it full, can be frustrating, she admits. "But there's always another one." She and most of her friends give the ferry system good marks, although she'd like to see more retail businesses on the ferry or in the terminal–"shoe repair, dry cleaning, and a book store."

At the end of each run, the boat is cleared of all passengers for a cabin sweep. "We want to make sure the ferry is secure for the next trip," says blue-uniformed deckhand LeRoy Augustine. He steps aside to let passengers board at Bainbridge. "It's a Mariner crowd going to the game tonight."

"Every deckhand, galley personnel, and engineer has special duties during fire, abandon ship, and rescue drills," says chief mate Victor M. Lotorto. One drill is conducted weekly.

Here to stay

Those who work with Thorne describe him as a man of "tremendous integrity," driven to be as good a public servant as he can be.

He's sometimes frustrated that things take so long to accomplish. Since early in his WSF tenure, he's wanted to transform Pier 52–Colman Dock–into a more retail-friendly establishment. The remodeling began this fall. For many it is "a very outward sign" that things are changing with the ferry system. WSF will also build two new ferries over the next three to five years. A management team is charged with finding $120 million for that effort. The legislature will help fund a third ferry.

"If there's truly an interesting side of Mike Thorne, it is his willingness to stand up and be held accountable," says a colleague. "At a time when new taxes and revenues are not available, he's willing to do business a different way. He's moving the ferry system towards being as self-sufficient as possible. I think the ferry system can get it done, knowing what I know about Mike Thorne's leadership and commitment."

Public opinion regarding the ferry system is highly favorable in general. That is not to say there aren't opportunities for improvement, Thorne says. "We've identified where we want to make the system run more efficiently–and the general baseline support needed. The people who use the ferries know we don't just have an eye on raising fares."

In June 2002, Washington State Ferries celebrated its 50th anniversary. The occasion clearly signified its service and commitment and that the ferries are here to stay. "The ferry system has allowed the state to grow and prosper," Thorne says. "It will become more important in the future–providing access to where people choose to live and work, and where housing is available."

Does he have a wish list for WSF?

"Yes. We have to think in terms of being as efficient and cost effective as we can. We have to look outside the traditional processes that you find in state government and more in terms of being entrepreneurial in delivering this essential service."

If the WSF is realistic and successful in reaching its goals, he says, "We will have a system that will be worth talking about at the 100-year anniversary."

Categories: Public affairs | Tags: Ferries

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