Cost estimates have nearly doubled for Whatcom County’s Lummi Island electric-battery hybrid ferry project.
Now adding up to more than $85 million for the full project — not including associated financing costs — the county’s public works department presented three scenarios and potential funding options to the Whatcom County Council on Tuesday, July 23.
On the table are options to defer electrification or simply opt for a diesel ferry to replace the aging Whatcom Chief. The county is also considering creating a new county ferry taxing district to make up the funding gap.
The project, as envisioned in 2022, includes replacing the aging Whatcom Chief with a new electric ferry at an estimated cost of $32 million, and also includes costs associated with terminal electrification, design and terminal modification and restoration.
Part of that cost might be borne by the federal government: In 2022, the county was awarded $25 million by the U.S. Department of Transportation’s Rebuilding American Infrastructure with Sustainability and Equity (RAISE) grant.
Costs have escalated since 2021 due to increased costs in the shipbuilding industry, additional costs from changing the replacement vessel from diesel to hybrid-electric propulsion and other project costs not previously considered, Kelly Lesoing, a consultant from KPFF Consulting Engineers, told council on July 23.
Lesoing and financial consultant Carla Sawyer presented three potential scenarios to the council.
The first scenario is to continue on the same path: construct a 34-car, battery-electric ferry in a single phase. Without financing costs, the total project expenses would amount to $85.8 million, leaving the county $45.1 million short.
The second scenario would defer electrification: the county would replace the current vessel with a 34-car hybrid diesel propulsion system and defer full electrification and shoreline charging equipment to a later phase.
While Sawyer suggested that Puget Sound Energy may not have the shoreline capacity to install the full charging infrastructure in the very first phase — one of the reasons the county explored this option — deferring wouldn’t save the county any money. The full project would cost $92.1 million, leaving a funding gap of $52.7 million, without financing costs factored in.
The third scenario includes replacing the Whatcom Chief with a 15-car diesel propulsion ferry. This option would still cost $42.8 million due to the need to address the deferred terminal maintenance, and with the RAISE grant cancelled in this scenario, since it was based on the ferry being electric, the county would still be short $27.1 million, not factoring in financing costs.
Council members asked about alternatives — Todd Donovan suggested a 15-car electrified vessel. Public Works Director Elizabeth Kosa said public works is still considering “all options.”
To meet the funding gaps in any scenario, Kosa said the council should consider seeking additional state appropriations, setting up a countywide real property taxing district (a ferry district), seeking supplemental federal or state grant funding, or increasing the fare surcharge.
The consultant’s financial modeling suggests that the county may be able to secure up to $18.7 million from the state, based on the amount Skagit County was able to receive for its ongoing Guemes Ferry replacement project, a $35.4 million project as of 2023.
But council member Kaylee Galloway said Skagit County had hired an additional lobbyist to lobby specifically on ferry funding, and it still took several years. Galloway expressed interest in a ferry district.
Roland Middleton, special projects manager for public works, told CDN July 24 that the county would have the authority to set up a ferry district through an ordinance and public hearing process.
Middleton said that public works has strived to have most capital construction paid for by grants and state funds, but the escalation of costs in regards to the boat are “astronomical.”
“Nobody wants to add additional taxes, burdening the taxpayers in Whatcom County, but it’s the reality about having a boat that is 60 years old and ready to be unable to serve the people of Lummi Island,” Middleton said on the possibility of a ferry district.
Despite the large costs, the county doesn’t have a lot of time to decide what to do.
“We can’t really delay the project for long drawn-out funding discussions,” Kosa told Council July 23. “In fact, this time next year we need to have that financial plan that demonstrates the ability to fully fund the project. I should note here that an indecision with funding by this time next year will automatically default in a loss of the (federal) RAISE grant.”
Council agreed to work sessions in the future to discuss options. No decision was made at the July 23 meetings.
Charlotte Alden is CDN’s general assignment/enterprise reporter; reach her at charlottealden@cascadiadaily.com; 360-922-3090 ext. 123.
