Readers,

Here are comments about Washington State Ferries being tossing around via email today and into the weekend by local economic-development people. Former Port of Bremerton CEO starts the conversation, followed by Former Port of Bremerton Commissioner Bill Mahan suggesting Bozeman head the ferry system. This is a good time to add your two cents. — Rachel Pritchett, reporter:

This is a Op-Ed piece that was in todays Seattle Times on the problems facing the ferry system. Those who believe that the Washington State Ferry system is important to this state should be concerned about the future of the service that will be made available. The New Normal I assure you will be made up of fewer trips and higher fares, unless we find leadership needed to solve the problem.
— Cary Bozeman

Cary,
You are spot on with your opinion regarding the Washington State Ferry System! It is time for new leadership and as I have told you, I think you could provide that leadership at the helm of the WSF.  We need to speak with Governor Elect Inslee and convince him that the state needs a proactive, creative and dedicated director of the WSF and you are the person for the job!
 — Bill Mahan

No thanks Bill.  The leadership has to come in Olympia, from our legislators and governor.
— Cary Bozeman

While I concur with Cary re need for leadership from Olympia. Like Bill, I also believe that it will take bold leadership from WSF. And, I believe it will also require bold leadership from business and community leaders around the Sound. If you think about the 520 and 99 projects — some of the loudest voices seemed to emanate from the business community — both private sector enterprises (like Microsoft, Boeing, Costco) as well as NGOs (like PSRC- EDD / EDCs, WA Round Table, and Chambers). This needs to be a Central Puget Sound transportation priority with strong support from both I-5 Corridor and West Sound leaders. Sixty percent plus of the state’s workforce resides and works in the Central Puget Sound Economic Development District (Snohomish, King, Pierce and Kitsap counties ) accounting for nearly 75 percent of the state’s non-farm economic output. The WSF is an essential component of the Central Puget Sound’s transportation infrastructure — critical to the success of businesses located East, West, North or South in the Sound. Many of the senior business leaders in the Seattle area rely upon West Sound talent to succeed; and, many have other close ties to Kitsap and other West Sound communities (property, homes,  customers, suppliers, etc.) We need to team with these folks to build a broad coalition of support for “OUR” WSF System. Cary – perhaps designing a true “regional” campaign to sustain the WSF system could become the Olympic Group’s focus.
 — John Powers, CEO, Kitsap Economic Development Alliance

Cary;
Most European and Asia-Pacific countries have ferries that are operated by commercial firms. It is time for us to seek a professional company to manage our state’s ferry system. Maersk or Norfolk Line (both subsidiaries of A. P. Moller-Maersk Group). Several large firms in Europe have excellent models for ferry fleet sizing, individual vessel mix, and employee management. They deal with more regulations than we have in the US. Sorry, but our government does not need to be in this ferry business, the liquor business, or any other business. Perhaps a another read of our State constitution. http://www.leg.wa.gov/LAWSANDAGENCYRULES/Pages/constitution.aspx
— Guy Stitt, president, AIM International

I think Guy is on the right track. We need a large reputable company, unlike Black Ball, to take charge of the ferry system.
— Paul Pazooki, The Pazooki Group

Without getting into the debate about merits of public or private systems of transportation, you should find of some interest that your debate occurs on the centennial of auto ferry service in Western Washington. Leschi, first auto ferry in Western Washington, begins operating on Lake Washington on December 27, 1913.
http://www.historylink.org/index.cfm?DisplayPage=output.cfm&file_id=2040 — P. Stephen DiJulio, attorney, Foster Pepper PLLC

For what it’s worth – two failed passenger only ferry attempts in Kingston in the last 7 years. One private, one public. The circumstances under a for-profit can own and run a system are few and far between. I believe the Bainbridge boat is the only one which returns its operating cost through the fare box. The best hybrid model (which is replicated in many, many areas) is for the state to own the boats and put the operations out for bid to the private sector. The state provides the financial certainty that is needed. The competitive bid process reduces waste and profiteering.
Jon Rose, President,
Olympic Property Group
a Pope Resources Company

Let’s keep this simple.
There are two problems. 1. Not enough money to maintain present service, and 2. No courage to face the union and the public with drastic cost cutting moves.
To the credit of the private sector, the bloat and redundancy in our present system would not be allowed.
All problems require courage. It is a commodity in short supply in many of our elected officials. (not all)
The other thing we need to be honest about is that we are hoping the rest of the state will subsidize our rural, “other culture” lifestyle. This is going to be a tough nut to crack.
I do think that the time has come, they can not go much further on this present tank of gas. (see “plan” below). Cary is right, without infusion of money and cost cutting, we will see fewer boats, fewer runs, a new normal.
Let’s be informed voices. I find this information interesting and helpful, hope you will too. Check out the Bainbridge numbers vs. Bremerton.

http://www.wsdot.wa.gov/ferries/traffic_stats/

and the present plan: http://www.wsdot.wa.gov/Ferries/Planning/ESHB2358.htm
Jim Boldt

I have followed this on-line discussion with great interest. As someone who considers herself a “super-commuter” (daily plus many weekends, particularly during Seahawks season), I face the ferry system daily and see the low standard of performance being practiced. Ferry management is up against a formidable foe in a system designed to defeat it, both on the state government and the union sides.
Imagine being in a bureaucracy where you report to the Governor, the Transportation Secretary, the State Legislature, the Senate and House Transportation Committees, and the Transportation Commission. Picture what it would be like to deal with ferry advisory committees and constituents from 17 communities around the Sound. Layer in the labor side of the equation, where a moribund idea of representation has resulted in 20+ bargaining units for a relatively small number of employees, any one of which could throw a bollix into ferry operations. And finally, top it off with the Coast Guard, and we all now know where they are going to come from in their decision-making. It is a structure destined for failure, no matter how effective the management team is.
It is true that there is a significant difference between Bainbridge and Bremerton numbers. Bainbridge/Seattle is one of two runs that actually is self-supporting and contributes money to the system; Edmonds/Kingston is the other. Mukilteo/Clinton is close. All other runs cost the system money. Are you suggesting that only profitable runs should be maintained? Are Bainbridge and Poulsbo residents prepared to handle the hundreds of vehicles that would pour their way as the rest of us try to get to work? Should we shut down all trains, buses, airlines and roads that are not self-supporting?
I agree change is imperative and will require a collective intestinal fortitude the likes of which does not yet exist. But before we abandon this public system in favor of a privately-run operation, I would ask that we consider the following:

1. When we talk about taxpayer dollars supporting our rural lifestyle, let’s pause and think about the hundreds of people who commute every day from Kitsap County to Seattle for work and from Seattle to our largest employer, the shipyard. Think of the hundreds of sailors who commute from Bremerton to Everett. All of those people spend money here and are the backbone of Kitsap County’s economy. I can assure you that if this form of public transportation is removed, all of these people will move to the other side where the jobs are, and any economic vitality Kitsap County currently enjoys would collapse. (We should at a later time have a discussion about the tax-free benefits private businesses realize operating on Naval Base Bremerton, the military discounts being offered by local businesses at the expense of the rest of the population, and the tax-free shopping tens of thousands of active duty and retired military enjoy to the detriment of local businesses – a conversation that needs to occur.)

2. I am certain ferry captains earn $100,000+ in salaries, but it is an exaggeration to suggest that all ferry employees expect and earn that much. At an educated guess, deckhands probably cost the ferry system $80,000, including benefits. Perhaps current and former naval engineers in this discussion could ballpark what WSF engineers earn and compare it with other like public and private sector jobs. However, the privately-operated Black Ball line in Port Angeles pays its non-union employees the same wages, farming out any work to the private sector that is outside daily operations.

3. The thorn in my side is the condition of the boats. I continue to be amazed that ferry captains tolerate dirt being left to collect on the floors and then polished over to be engrained into the ambience. This is one significant difference in the expectations of public and private operations. If ferry captains and the Coast Guard demand more staffing for emergencies, the daily maintenance standards need to be much higher. Perhaps the current and retired naval personnel could help in the conversation about that expectation and how all hands on the proverbial deck need to do all tasks to maintain a vessel. We should not be expected to pay for personnel sitting (or sleeping) in lounges during sailings. And we should not have to tolerate floor polishing at 6:30am just to make a point if we complain.

4. It would be very helpful to have these same military personnel explore the relationship of the ferry system and the Coast Guard.

5. When we choose to take on these particular unions, let’s be sure we do it thoughtfully. When the IBU decides to flex its muscle, are you prepared to shut down all west coast ports and shipping operations?

It is going to take a tremendous collective effort to change a system so desperately in need of it. Other public transportation systems manage to operate far more efficiently. A water-borne system makes perfect sense in an area like Puget Sound. I don’t know that the current hybrid state highway/transit model is the right one, but it will continue so long as we collectively feel that having our vehicles instantly accessible is a right that should be supported by public dollars.
— Joan Dingfield

Readers,

I stopped in to say hi to the people at the Port of Tacoma yesterday before I visited Safe Boats International’s new facility. They have me this aerial, taken this past September, of the port. The port has four peninsulas that extend west in to Commencement Bay. To the north Brown’s Point overlooks the port. To the south, downtown Tacoma is right there.

In the photo, Safe Boats is on the left-hand peninsula, the one with the docks. The facility is right at the end, between the two white buildings.

Rachel Pritchett

By Don C. Brunell, president, Association of Washington Business

With all the class warfare these days, “rich” has become a four-letter word. To hear some tell it, high-income earners are greedy misers who don’t pay their “fair share.”

Well, not quite.

When it comes to taxes, the IRS reports that, in 2009, the latest year figures are available; the top 1 percent earned 17 percent of all income and paid 37 percent of federal income taxes.

As for contributing to charity, Americans are a generous people. According to the Urban Institute’s Center on Nonprofits and Philanthropy, private donors contributed $202 billion to charities in 2010. The Chronicle of Philanthropy reports that last year the top 10 wealthy individuals donated $8.3 billion, the top 10 U.S. foundations gave $8.1 billion, and the top 10 corporate foundations donated $8.7 billion.

Microsoft co-founder Paul Allen donated $372.6 million in 2011, including a $295 million gift to his Paul G. Allen Family Foundation and $70 million to the Allen Institute for Brain Science.

Like Allen, many wealthy people and companies form their own foundations. The Bill & Melinda Gates Foundation has a $37 billion endowment that funds their global charity efforts. In 2010, Gates and business magnate Warren Buffett announced that 40 of America’s richest people — including themselves — had agreed to sign a “Giving Pledge” to donate at least half their wealth to charity, which works ut to an estimated $115 billion.

Washington companies that gave generously last year include Microsoft ($105 million), Intel ($90.6 million), Starbucks ($30.5 million) and PACCAR ($5.85 million).

As impressive as those numbers are, charitable giving is not about the “big guys,” it’s about the local folks and small employers who consistently and quietly give back to their communities.

For example, Ed Schweitzer, who started his engineering company in his garage in 1982, now runs a multimillion dollar engineering laboratory that employs 1,700 people in Pullman. A partial list of the Schweitzer family largess includes $2.4 million to build and upgrade the city’s aquatic center, $1.7 million for the Girl Scouts and $1 million to the Palouse Discovery Science Center.

In western Washington, The Fulcrum Foundation depends on local donors and patrons to provide low-income families with tuition assistance so their kids can attend Catholic schools. In every community, fundraising drives solicit local business owners for donations for the Salvation Army, United Way and families of fallen police officers.

In Olympia, The Rants Group, a property management company owned by father and son Ron and Pat Rants, has led drives over the years to support the local Boys & Girls Clubs. In Grays Harbor, the Quigg family, owners of Quigg Bros., Inc., led the fundraising to build a new YMCA.

Ironically, these very donations are now being targeted by the federal government. In search of more tax revenue, President Obama is proposing to reduce the federal income tax deduction wealthy people get for their charitable gifts from 35 percent to 28 percent. Since many small business owners file their taxes as individuals, they’re defined as “wealthy.” Some Republicans have suggested that, instead of searching for tax “loopholes” to close, the feds could just impose a $50,000 cap on tax deductions.

Those proposals sparked a firestorm of protests from charity managers who argue that limiting tax deductions for charitable donations would undercut support at a time when the need is greater than ever. While the changes target “the rich,” the greatest impact would fall on the poor.

At its core, the notion of severely limiting charitable tax deductions presumes that the federal government will do a better job helping community groups and causes than the local people who live there.

Do we really think that’s true?

Having a Hobbit party before the 12:01 showing? Got special plans? Call and tell me about them as I prepare my story about Kitsap seeing — finally — “The Hobbit.”

Rachel Pritchett, reporter
360-475,3783
206-498-0920

Readers,

Work is about to start on extending the Port Orchard Marina Park eastward to the Marley Apartments, adding a pedestrian path, viewing platform and stairs to the beach.

The Port of Bremerton is leading the work, and at a meeting Tuesday night, an interested citizen onlooker of the project, John Allen of Long Lake, questioned whether planners had given enough consideration to handicapped people’s access to the beach.

Stairs won’t cut it, he told commissioners, but a ramp might.

Commissioners agreed to have staff look into making the plan more handicapped-friendly. Larry Stokes said the area of the ramp could be too steep. Roger Zabinski said, “I don’s know if we want a ramp down to the beach.” Axel Strakeljahn said, “I’m in full support of what you’re saying.”

Other than commissioners agreeing not to change moorage rates at the Bremerton Marina in 2013, not much else happened at the last port commissioners’ meeting of the year.

— Rachel Pritchett

By Rachel Pritchett

KINGSTON — Come next May, the Puerto Vallarta restaurant at George’s Corner will be in a much bigger space in the same shopping village.

Ground work now is underway for the new location of the Mexican restaurant, to be the south side of George’s Corner just feet from its present location. The shopping village that also has a popular Albertsons grocery store is at the northeast corner of Highway 104 and the Hansville Road.

The new Puerto Vallarta location will have 6,000 square feet of space. The owner, Sergio Andrade, leases the current location but will own the land and building at the new location, according to Robert Baglio, one of the owners of the general contractor of the project, BJC Group of Port Orchard.

Andrade also owns the Puerto Vallarta restaurant in Port Orchard.

The enlarged restaurant will be the only tenant in that area of George’s Corner, for now, since it lacks sewer infrastructure beyond the construction site.

AAA says the average price for a gallon of unleaded was $3.31 this Monday morning, down 13 cents from a month ago. National analysts predict the downward trend will continue through the holiday. The price of a barrel of oil Monday stood at $87.

Gas on the Port Madison Reservation, historically selling for less, continues to hover at or near the state average. Today, it also was at $3.31.

— Rachel Pritchett

The state Department of Employment Security estimates that three-fourths of Washington employers will pay the same or even lower amounts in unemployment tax rates.

Overall, the average total tax per employee will rise by $37, to $499 for the year. However, each employer’s actual tax bill will depend on the amount of wages paid to employees and the employer’s rate class, according to a statement from the department sent out this morning.

Some employers will pay more in 2013 because their layoffs increased in the past four years, while others may see a slight increase due to the amount of wages that are taxed. Taxable wages will increase from $38,200 in 2012 to $39,800 in 2013 because the state’s average wage grew in 2011.

In 2013, 14 percent of employers will move into lower rate classes, 61 percent won’t change, and 25 percent will move into higher rate classes. More than one-third of all employers will be in the lowest rate class because they had no layoffs in the past four years.

Thanks to a permanent tax cut approved by the state legislature and the governor in 2011, unemployment tax rates in each of the state’s 40 rate classes will remain unchanged from 2012, ranging from 0.14 percent to 5.82 percent.

Beginning in 2014 and beyond, many employers will begin to slide back down the rate scale as recession years are gradually dropped and post-recession years are added to the calculation, according to the department.

— Rachel Pritchett

By Don Brunell, president, Association of Washington Business

We’re seeing a lot of news stories these days about the projected costs of the new federal health care law known as Obamacare. Employers of all sizes, from small companies to warehouse stores and restaurant chains, are warning that compliance costs will force layoffs and price hikes.

Even some of the lesser-known provisions will cost employers billions of dollars.

For example, tucked away in the 2,000-plus pages of the legislation is a requirement that restaurants and “similar” food retailers display calorie counts on their menus. Sounds reasonable in this health-conscious age, but according to the Office of Management and Budget, the calorie display requirement was the third most burdensome statutory requirement passed in 2010. OMB estimates it will take more than 14.5 million work hours every year to comply and $69.8 million for recordkeeping alone.

A big part of the problem is how regulators interpreted the new requirement.

The Food and Drug Administration decided that, in addition to restaurants, the requirement would apply to coffee shops, delicatessens, take-out food, grocery stores, convenience stores, movie theaters, airplanes, cafeterias, bakeries and vending machines.

Even the White House was apparently caught off guard by the sweeping scope of the FDA regulation.

The New York Times reports that Nancy-Ann Deparle, President Obama’s chief health adviser, personally complained to the FDA Commissioner, after which the agency relented — slightly. The federal government will no longer require published calorie counts for movie snacks or airline food.

But the agency’s concession is of little comfort to all the other businesses caught in the crosshairs of this new regulation.

Take grocery stores, for example, an industry with average profit margins of just 1 to 2 percent. The Food Marketing Institute estimates that initial compliance costs for grocery stores will top $1 billion. Supermarket chains will be required to post calorie information on thousands of items, from chicken cooked in the store to potato salad sold in the deli, says Erik Lieberman, FMI’s regulatory counsel.

“If we sell an individual blueberry muffin, that has to be labeled,” he said. “If we sell a pack of six, that’s got to have a separate label.”

But pizza chains could face the biggest hurdles if companies like Domino’s Pizza are required to display calorie counts for each of the 34 million possible topping combinations the chain offers.

“If they want to put in new products or change pricing or add new toppings, they have to buy new menu boards,” said Jenny Fouracre-Petko, director of legislative affairs for Domino’s Pizza. “That’s where it gets expensive.”

The problem is that, too often, bureaucrats don’t understand what it takes to comply with government regulations.

A recent editorial in The Washington Times pointed out that suppliers, ingredients and recipes constantly change. If a store wants to offer something different, it will have to pay around $500 to ship the product to a lab for testing and certification.

The major questions are, will this regulation make people eat less when they dine out and at what cost to our struggling economy?

The Center for Science in the Public Interest strongly supports the requirement and touts the effectiveness of similar rules. CSPI reports that, “A study conducted by the New York City Department of Health and Mental Hygiene found that 1 in 6 customers used the calorie information at chain restaurants….”

That means 16 percent of people used the information, while 84 percent did not.

Congressional opponents led by Rep. John Carter, R-Texas, have introduced the Common Sense Nutrition Act to limit the scope of the labeling requirement largely to restaurants.

That makes sense.

Kitsap County home prices are a lot cheaper in Kitsap County than those in King County, but the real bargains are in Pierce County.

While the median closing sales price for a home in King County stood at $353,250 in November, it was only $245,000 in Kitsap County and a mere $195,000 in Pierce County, according to the Northwest Multiple Listing Service.

The November home price in King County amounted to a 22 percent increase over November 2011. But in Kitsap and Pierce, the prices only increased 5 percent year over year.

The highly volatile number changes month to month. So far this year in Kitsap, eight months had lower median closing prices and two had higher closing prices than November.
Those numbers are for single-family homes and condominiums combined. The modest price increase disappears with just condos.

The median closing sales price for condos in Kitsap in November of $169,750 was a steep 22 percent drop from a year ago. Only a dozen condos sold last month in Kitsap.

The price of single-family homes in Kitsap taken alone rose 8 percent.

Some 288 sales were pending locally last month, a 26 percent increase over November 2011.
Inventory, meanwhile, continued to shrink 10 percent from a year ago in Kitsap. Some 1,345 homes for available for sale. That number, however, does not include the “shadow inventory” of homes in financial distress that banks are holding off the market in order to not further depress prices. That’s several hundred more that at some point will come on the market.

The latest sales price for a home in Mason County was $159,000, and in Jefferson County, it stood at $284,000.

— Rachel Pritchett, reporter