Whatcom County  
Council Special Committee of the Whole  
COUNTY COURTHOUSE  
311 Grand Avenue, Ste #105  
Bellingham, WA 98225-4038  
(360) 778-5010  
Committee Minutes - Draft Minutes  
Tuesday, June 2, 2026  
9 AM  
Hybrid Meeting - Council Chambers  
FERRY DISTRICT WORKSHOP - HYBRID MEETING - ADJOURNS BY 10:55  
A.M. (PARTICIPATE IN-PERSON, SEE REMOTE JOIN INSTRUCTIONS AT  
www.whatcomcounty.us/joinvirtualcouncil, OR CALL 360.778.5010)  
COUNCILMEMBERS  
Elizabeth Boyle  
Barry Buchanan  
Ben Elenbaas  
Kaylee Galloway  
Jessica Rienstra  
Jon Scanlon  
Mark Stremler  
CLERK OF THE COUNCIL  
Cathy Halka, AICP, CMC  
AB2026-415  
1.  
Work session to help the Whatcom County Council (acting as the Ferry District  
Board of Supervisors) learn more about the ferry system, ask questions, and consider  
what level of service the Ferry District could provide through establishing a levy rate  
Elizabeth Kosa, Public Works Director, introduced a presentation on the  
ferry district levy rate. She stated that the purpose of the work session is to  
get feedback from Council regarding a potential levy rate. She provided an  
overview of the ferry district process so far, noting that today's work  
session is the second step in developing the ferry district that Council  
established on May 12th. She stated that, in fall 2024, ferry replacement  
was estimated to cost $93 million. At that point, Public Works worked to  
reduce the scale of the replacement project, and a diesel-electric battery  
hybrid 20-car vessel was identified as the replacement. These changes  
reduced the project cost to $54 million. However, even with the reduced  
cost and federal and state grants, the county does not have existing reserves  
or in-hand funding to cover the $19 million replacement project funding  
gap (for debt services). Kosa stated that the levy rate must include debt  
financing. She stated that the RAISE grant will be forfeited, and the county  
may be responsible for repayment of allocations to the state and federal  
government if the county does not go ahead with the new build as designed.  
Kosa provided an overview of work on the project, which started in 2017, to  
date.  
Carla Sawyer, Public Works, provided an overview of cash flow analysis,  
potential funding level requirements, and corresponding property tax levy  
amounts, noting that levy yields should be confirmed and projected by the  
Assessor's Office. The lowest levy rate of $0.01 would result in a 2027  
yield of $700,000 while a $0.10 levy rate would result in a 2027 yield of  
$6.6 million. Sawyer outlined four potential funding level scenarios:  
·
Level 3 would offer full funding, and would cover annual operating  
expenses, near-term capital improvements, tidelands lease, uplands  
lease repayment, replacement project debt repayment, operating  
reserve, future Gooseberry Point Terminal, mid-cycle vessel  
refurbishment, and future vessel replacement reserve.  
·
Level 2 would provide core program offerings, including annual  
operating expenses, near-term capital improvements, tidelands lease,  
uplands lease repayment, and replacement project debt repayment.  
Level 1A would provide replacement debt payment only.  
Level 1B would provide the replacement debt payment and uplands  
lease repayment.  
·
·
Sawyer provided information about expenses, stating that annual uses of  
funds were projected to the year 2027 using actual expenditures adjusted  
for new vessel profile, the replacement project financial plan, and marine  
industry data. She shared the following fund amounts:  
·
·
·
·
·
·
·
Annual operating expenditures =$5.5 million  
Near-term capital investments = $1 million  
Tidelands lease payments = $200,000  
Uplands lease repayment =$400,000  
Annual debt payment = $1.6 million  
Operating reserve = $200,000  
Gooseberry Point Terminal = $1.3 million (approximately 50% of  
project cost)  
·
·
Mid-cycle vessel refurbishment = $600,000  
Vessel replacement = $900,000.  
Sawyer identified and quantified existing fund sources:  
·
·
·
·
·
Federal Ferry Boat Program $700,000  
Farebox (Ferry Users) = $2.2 million  
Capital Surcharge (Ferry Users) = $200,000  
Other State funding = $500,000  
Crab Grant = $500,000  
Sawyer stated that $1.1 million is the minimum amount needed to keep the  
replacement project moving forward. She also noted that the maximum levy  
rate is insufficient to fund the full ferry program. Variations on the three  
options could be considered to strike a balance between levy revenues and  
funding goals.  
Kosa stated that she hopes to get feedback and have an open discussion  
about potential levy rates with councilmembers. She said the next work  
session on June 30 will focus on updating Whatcom County Code language.  
She said that they hope to introduce a draft ferry district levy ordinance and  
submit a MARAD-RAISE grant agreement on July 14 with a Council vote  
on the ordinance on July 28.  
Sawyer stated that the funding gap might decrease if the county receives a  
MARAD grant.  
Kosa stated that Level 1A is the minimum required for moving the ferry  
project forward. She said that going with Level 3 would impact their ability  
to go forward with the replacement vessel because it would require a vote  
from the public and would create a timing problem that could result in the  
loss of the RAISE grant. She opened the floor to questions from the  
councilmembers.  
Stremler asked about savings of running a new, more efficient ferry vessel  
versus the current vessel.  
Kosa stated that the new vessel will be larger, which may be more costly in  
terms of fuel consumption and dry dock. She added that it will likely not  
break down as much as the current ferry, but the new vessel is also a diesel  
hybrid, which is more complex and may require more specialized  
maintenance. She stated that, similar to new vehicles, new marine vessels  
have some proprietary elements, which may require specialized  
maintenance.  
Stremler asked a follow up question about mid-cycle refurbishment.  
Kosa stated that they estimate a 50-year vessel life with mid-cycle  
refurbishment at 20 years.  
Scanlon asked for clarification on the mechanics of the levy.  
Kosa stated that the levy is similar to the flood control zone district.  
Chris Quinn, Prosecuting Attorney's Office, stated that Council can set up  
to $0.10 per $1,000 worth of property value. Once Council establishes the  
levy rate, it will result in a levy amount. Quinn stated that $0.10 is a hard  
ceiling. Beyond that, voter approval is required. Therefore, if Council starts  
by setting the rate at $0.10, there is some risk if property values plummet.  
Scanlon asked if there is a way to adjust the levy rate year-to-year below 10  
cents.  
Quinn stated that 1 percent is the constitutional limit for increases, but  
there are no restrictions on decreases to the levy. He said that, if Council  
does not take the 1% increase in a given year, they would likely be able to  
use that banked capacity in a future year.  
Scanlon asked how many of the fund uses would extend for the length of the  
levy.  
Sawyer stated that the operating reserve is one example.  
Jed Holmes, Executive's Office, stated that the Crab revenue will end in  
about 17 years.  
Sawyer stated federal ferry boat program funds have historically been pretty  
reliable. She said that other state funding includes the ferry deficit fund  
appropriated by the legislature and the motor vehicle fuel tax.  
Scanlon stated that the use of the fund and the availability of other revenue  
sources may change at some point in the future.  
Rienstra asked about market volatility.  
Sawyer stated that in 2021-2022, there were 20 percent swings in shipyard  
costs.  
Stremler asked about the relationship between Level 3 and Level 2 funding  
options and the Road Fund.  
Kosa stated that there would be a $3 million positive impact to the Road  
Fund (or other eligible fund) annually. She added that they could potentially  
use the funding to restore maintenance and operation positions and begin  
building up the fund balance.  
Scanlon asked if there are other uses councilmembers would like to see for  
the Road Fund in the future.  
Councilmembers expressed agreement with the priorities stated by Kosa.  
Scanlon asked what people around the county would see if those positions  
were restored.  
Kosa said that they would see more chip seal work, ditching, and other road  
maintenance.  
Boyle asked about mid-cycle vessel refurbishment.  
Kosa stated that if inflation or costs overcome the levy amount, the county  
could put the levy up for a public vote or look at reducing services.  
Boyle asked about the impact of the levy rate on families. She estimated  
that at the average property value of around $616,000, the impact would be  
about $43 annually.  
Stremler asked about electrification at the ferry terminals.  
Kosa stated that they are not going to build out the infrastructure for full  
electric, but the boat could be converted to full electric if desired at a later  
date. Electrification was projected to add approximately $10 million to the  
project.  
Scanlon asked about the operating reserve fund.  
Kosa stated that the ferry fund operates without a meaningful fund balance.  
The reserve would be available to pay for unanticipated emergency expenses  
such as a significant breakdown.  
Scanlon asked how emergencies are currently handled.  
Kosa stated that they may look to the Road Fund or the General Fund for a  
loan.  
Scanlon asked what the levy rate would be to include the operating reserve  
fund and the future Gooseberry Point Terminal.  
Sawyer stated that she would calculate the rates.  
Scanlon asked for clarification about the cost of ferry fares.  
Kosa stated that the fares would be flat as they relate to their 55% target  
and 1% if necessary for inflation.  
Stremler asked about the labor pool for new maintenance and operations  
staff.  
Kosa said that there is a labor pool out there, though many do not have  
commercial driver’s licenses (CDL).  
Boyle asked if there are any concerns with selecting Level 2 or lower.  
Kosa stated that the preference is for sustainable funding.  
Buchanan asked about the Gooseberry Point property acquisition.  
Roland Middleton, Public Works, stated that the county did not purchase  
any property, and Lummi Nation has stated that the county should prepare to  
move at the end of the lease, which is October 27, 2046. He said the goal is  
to move out of the way of the Lummi commercial properties but stay in the  
same general area.  
Satpal Sidhu, County Executive, stated that it would be good for the county  
to acquire property.  
Stremler asked for clarification about the next steps.  
Kosa provided an overview of some key upcoming dates.  
Middleton stated that the funding for the RAISE grant goes away on  
September 30.  
Kosa stated that if they added the operating reserve fund, the levy rate would  
stay at $0.07. If they added the Gooseberry Point Terminal, it would go to  
$0.09. If they added both operating reserve and future Gooseberry Point  
Terminal, the levy rate would stay at $0.09. If they added the operating  
reserve, future Gooseberry Point Terminal, and the refurbishment, they  
would need to levy the full $0.10, and it would still be $100,000 short.  
Scanlon asked if there are any other potential revenue sources for the future  
Gooseberry Point Terminal.  
Kosa stated that there may be opportunity to apply for more grants.  
Sawyer clarified that the $1.3 million estimate assumes that the county  
receives 50% of the funding from grants or other sources.  
Kosa clarified that the levy cannot be used for the Road Fund, but pressure  
on the Road Fund can be alleviated with the levy, as Road Fund dollars will  
no longer need to be expended at the same rate in the Ferry Fund.  
Scanlon asked for an overview of the annual report regarding the ferry fund.  
Laura Frolich, Public Works, shared information about ferry system  
operations for fiscal year 2025. She provided an overview of cumulative  
fund balances over time, noting that there is a surplus, which is important  
for a system with this level of expense. Frolich highlighted some of the  
different revenue sources that flow into the ferry fund, as well as the  
expenses for the year. She continued to detail aspects of the annual report.  
Julia Green, Public Works, stated that the farebox would have been about  
$9,000 short of the goal without the trial ruling and the youth zero-fare  
policy grant.  
Frolich returned to describing the annual report.  
Kosa stated that Public Works looks at the need for ferry rate adjustments  
each year.  
Elenbaas asked for clarification about the farebox projections.  
Green stated that there was a typo on the farebox projections slide.  
Scanlon asked where the payment for the lawsuit came from.  
Green stated that it was a Road Fund transfer into the Ferry Fund.  
Scanlon asked where the MVFT recalculation landed.  
Green stated that it went into the Ferry Fund and is a split between the local  
portion of 45% and the farebox portion of 55%.  
Scanlon asked if the fare increase impacted ridership.  
Frolich stated that ridership remained consistent.  
Scanlon thanked the presenters.  
Kosa asked councilmembers to email questions and potential levy scenarios  
to Public Works.  
Boyle asked what other councilmembers are thinking in terms of potential  
levy amounts.  
Rienstra stated that she is interested in seeing the impacts of the potential  
grant funding. She added that $0.08 might be a limit for her due to potential  
volatility.  
James Lee, Public Works, stated that a grant was submitted on June 1 and  
there is no timeline for a decision, though staff are hoping it will happen by  
the end of the year.  
Kosa stated that they might be able to provide language to address the grant  
if it occurs after the vote on the levy.  
Sawyer stated that a clear plan for local funding is essential before trying to  
finance debt.  
This agenda item was PRESENTED AND DISCUSSED.