Reeling From Potential Losses Of I-695

FERRY-DEPENDENT communities voted in favor of Initiative 695. But its passage means cutbacks in service, in particular to the passenger-only ferries. The potential economic consequences are so dire that city officials are contemplating filing a suit against the initiative.

BREMERTON - This town can't catch a break.

Over the years, it convinces Washington state transportation officials that a key missing ingredient to the city's renewal is fast, dependable ferry service to Seattle. The state builds two passenger-only ferries and puts them into service.

How do Bremerton and north Kitsap County residents respond?

By voting for Initiative 695, eliminating the motor-vehicle excise tax, the biggest source of money that keeps ferries afloat.

So dire are potential economic consequences in Bremerton and in other communities served by the ferry system that elected officials are contemplating political suicide by challenging the constitutionality of I-695. In King County, the Vashon/Maury Island Community Council has authorized its attorney, David Vogel, to sue, joining the Amalgamated Transit workers in a constitutional challenge.

"The ferry system has proposed a number of ways to deal with the loss of revenue, and all of the ways adversely affect the people on Vashon Island," said Vogel, who plans to file a lawsuit in King County Superior Court tomorrow.

"The population has boomed here because of the ferry system. It's a large reason why people moved here. Property values will decline, and people will have to give up their jobs because of this."

In Bremerton, where nearly 53 percent of voters supported I-695, the city's legal department quietly is considering options and awaiting guidance from Mayor Lynn Horton and the City Council.

Knute Rife, Bremerton's assistant city attorney, says several cities are contemplating their next move - prompted, in part, by private attorneys trying to put together a broad legal challenge to I-695.

One attorney looking to have some questions answered is Hugh Spitzer, bond counsel for a number of utilities and special-purpose districts.

"There are at least two dozen important, unanswered questions about I-695," said Spitzer, who worries that his clients will find it harder and more expensive to sell bonds and raise money. "One way or the other, the courts will have to resolve each and every one of them. But I can't predict the order they'll be presented to the court and dealt with."

Spitzer has been trying to line up clients to ask for a declaratory judgment to determine whether I-695 applies to utility rates and charges. Other legal concerns generally focus on whether the initiative will take away the constitutional authority of governing bodies to raise taxes and fees, and whether it violates a state law requiring that initiatives deal with only one subject.

Dent in city's optimism

Bremerton officials last summer thought the city and its downtown were finally on the cusp of an urban renewal after years of decline.

There were sound reasons for that optimism. Washington State Ferries and Kitsap Transit were building a regional transportation center. The mayor unveiled a redevelopment plan, and relatively low property values fueled a dramatic increase in residential sales, many of them to people who planned to commute to Seattle by high-speed ferry.

A legal challenge to the high-speed ferries, brought by homeowners in Rich Passage, has temporarily slowed them down. Bremerton and ferry officials expect to win that case and resume speeds that get the ferries from Bremerton to Seattle in 35 minutes.

Passage of I-695 could have more permanent effects. It eliminates the motor-vehicle excise tax, which has provided 70 percent of the ferry system's capital budget and nearly one-third of its operating budget.

If I-695 is upheld, commuters from places such as Vashon Island, Southworth and Bremerton may discover just how expensive it is to operate a dependable ferry system.

Regular commuters who take passenger-only ferries now pay $2.60 for a round-trip ride to and from Seattle. Pat Patterson, spokeswoman for the system, said the fares covers less than one-quarter of the cost of operating the system between Bremerton and Seattle, and 15 percent of the cost of running passenger-only ferries out of Southworth.

Under I-695, the ferry service has proposed a revised budget that eliminates passenger-only service.

"It's a dollars-and-cents issue," Patterson said. "We still think it's very good public policy to operate passenger-only boats, but we are not going to be able to in the future. Our new budget simply doesn't allow us to continue service."

Possible sources of funds

Of course, the Legislature could bail out the ferry system with money from the state's contingency fund, but that solution wouldn't be received well by the rest of the state.

For communities served by state-owned ferries, more likely options include considerably higher fares and, possibly, privatization of the system. Kitsap Transit is talking with the state about leasing passenger-only ferries and running the service between Bremerton and Seattle.

"We'd like to see them make a go of it," Patterson said.

Of course, people on this side of the Sound have the option of driving to their destination. Not so in places such as Vashon Island, where voters rejected I-695 but may have to live with major consequences of its passage.

"It's gonna hurt the economy to a significant extent, no doubt about it," said Gardner Perry, a member of the island's community council and Ferry Advisory Board. "The cuts they're making are definitely going to stunt the island economy and, I would assume, will cause property values to drop on the island.

"The bulk of the people on Vashon commute off it for work. There is absolutely no alternative. We're absolutely dependent on the ferry system. For us, the ferry system is a lifeline."

Robert T. Nelson's phone message number is 206-464-2996. His e-mail address is rnelson@seattletimes.com