Having followed the planning process for the Water Emergency Transportation Authority’s (WETA) proposed Berkeley ferry project, most analyses to date appear to have focused on environmental and traffic issues. I would like to address what I perceive to be another important issue—the probability that the City of Berkeley will be expected to subsidize this expensive amenity.
Berkeley residents should take the time to closely read the published WETA documents on their website—prior to the expected review of this project at a City Council meeting in early June. In particular, the WETA draft Transition Plan (WETA-TP) indicates the need for ongoing operational subsidization and financial responsibility of the cities involved: http:// www.watertransit.org/files/TransitionPlan/ DRAFT TP04029.pdf
Unfortunately, WETA’s financial projections do not account for the recently proposed $20 million two-story, 650-car parking structure covering the entire His Lordship’s restaurant parking lot.
In addition, there are other problems with the information contained within the WETA Transition Plan . Perhaps the most obvious is that Table 4.1 indicates “22 weekday ferry trips” with “5,930 weekday riders.” This table is confusing because it implies that each weekday ferry trip would handle 270 riders (far exceeding vessel capacity). John Sindzinski, WETA’s Manager of Planning & Development, has stated that the total projected ridership is approximately 1,700 riders each day, with a roundtrip representing two trips. He has also indicated that the projected 1,700 per day ridership level would not be reached until after 2020. It is critical that accurate and consistent figures be used for both economic and environmental impact planning, and that decision-makers and all communities be fully informed of the financial consequences if actual ridership does not meet projections.
In the case of the Berkeley route, capital costs for the terminal are estimated to be $31 million, and the ferries are estimated to cost $9 million each. Thus, the service would have an initial capital cost of $49 million—rising to $69 million if the proposed garage is built. In the unlikely event that ridership actually equals capacity (1,700 riders/day, 5 days/week, 52 weeks/year) that projection would result in a total of 442,000 riders per year. At a modest discount rate of 3.5%, that represents an opportunity cost of capital of $2.61 million per year over 30 years, or the equivalent of $5.90/rider, without consideration for operating costs. If a garage is built, that opportunity cost rises to $8.30/rider, increasing further if more realistic ridership levels are used. In any case, consistent and unambiguous figures must be used, with all assumptions clearly noted and the potential impact of those corrections on the financial plan for this service revealed in advance of public decision-making.
In addition, the WETA-TP indicates that the majority of public funds available for this project are “fixed, and do not escalate over time.” Thus, fare increases and/or project subsidization through tax increases are expected to offset the projected 2.5% annual operating cost inflation assumption, in spite of the fact that these sources are not currently the primary source of financial support for this project.
The WETA-TP states that “options for cutting expenses or increasing revenues” will be required for this ferry service to remain budget neutral by 2013. The WETA-TP also states that “cities become a vital partner in future development around water transit services. City responsibilities could include: Support for use and passage of local sales tax measures, or other local funds to support ongoing operating expenses.”
Taken together, the projected deficits, lack of inflation cost support, and expectation that local sales tax increases may be required all must be more clearly addressed prior to any decision by city governmental authorities. It would be a gross disservice to our community to impose this project on the city of Berkeley without clarifying the potential financial liabilities involved.
In conclusion, it appears clear that the expected environmental and societal impacts of this program do not justify this use of increasingly scarce public resources, particularly when the entire projected WETA ferry ridership could easily be accommodated by adding the service of only one additional BART roundtrip per day and at lower cost per rider.
David R. Fielder has been a Berkeley resident for 40 years.