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Ferry Advisory Committee Action Minutes

Salt Spring Island FAC Action Minutes Page 1 of 17 Meeting Date: October 24, 2011

Salt Spring Island Ferry Advisory Committee

Date: October 24, 2011 Time: 5 p.m.

Location: Lions Club Hall, Salt Spring Island

Participants:

FAC Committee BC Ferries Kevin Bell Rob Clarke, Executive Vice President & Chief Financial Officer George Ehring Mark Stefanson, Vice President, Public Affairs Chris Gadsby Capt. Lewis MacKay, Marine Superintendent, Southern Islands Garth Hendren Paul McDaniel, Regional Director, Terminal Operations, South Bob Jones Joanne Carpendale, Director, Corporate Planning Scott Simons Darin Guenette, Manager, Public Affairs Harold Swierenga Others Absent Brian Hollingshead, Chair, SGI FAC Lorne Bunyan Members of the public

1. Call to Order and introductions: 5 p.m.

2. Approval of Agenda: The public presentations were moved to the beginning of the proceedings, and thereafter the agenda was approved.

3. Public presentations:

a. Salt Spring Arts Council– Pat Preston and Janet Halliwell introduced themselves as member of Salt Spring Arts Council and gave an outline of the organization’s structure and functions. They stated that one goal for the Council is to move towards a long-term mutual relationship with BC Ferries, and requested an annual meeting be established between Council leaders and BC Ferries senior management representatives. They said there were two issues of interest for the organization. The first issue was termed ‘early harvest/quick win’, where the Council was looking for opportunities to sell hand-made, local arts/crafts. The second issue was to highlight the effect of high fares on tourists and artists. Overall, the Council sought response for working together.

Mark Stefanson noted that he had received a letter from the Arts Council with their request, and the result would be a meeting with BC Ferries’ Retail Manager, Arensha Garrison in the near future. Rob Clarke pointed out that BC Ferries has limited control over rising fares, as the Province, by how they set service levels, determines policy around overall fare structure. He added that the overall economy and other factors also have as big an impact on people’s personal economic situation as do ferry fares. Rob suggested the Council may wish to let the Commissioner know their concerns about fares.

Discussion followed around selling in a retail environment like that onboard ferries, as there would normally be a wholesale-retail arrangement. That is, BC Ferries may or may not be able to operate on a commission basis. Kevin Bell noted that most arts products cannot be sold on the island in stores because of a need to wholesale, so these items becoming available may not be supported by all in the community.

b. Fulford Study Group – Margaret Day expressed that the Fulford Study Group (FSG) continue to hear from locals that Fulford Village issues are a growing problem. She noted that since Patterson’s store has close, double-parking and dangerous drop-off and pick-up situations have become more common. FSG hopes the ‘right side of the road’ when departing the terminal is still being considered for improvements. Margaret added that the residence at the top of the hill is experiencing the brunt of parking problems, and she suggested BC Ferries buy or lease separate park-and-ride areas. She also said she believed the ‘road widening project’ should be exempt from the current fiscal restraint measures happening within BC Ferries, as this problem has been ongoing too long and beyond needing to be addressed. FSG is of the opinion that this terminal is the busiest and most dangerous on in the Southern Gulf Islands, meaning it should be prioritized over all other projects. Paul McDaniel informed the group that work is continuing in the risk assessment process. Rob Clarke replied that the biggest problem proceeding with the Master Plan Phase I is the land titles along the roadway have not been settled. He noted BC Ferries is in a period of financial restraint, but capital plans are proceeding with very close scrutiny. Rob mentioned the Commissioner’s review is also clouding the issues with respect to how capital expenditures are acted upon. Phase I will not be completed in the spring of 2012 as previously planned, and there is no estimated time for when it may go ahead. Rob stressed that BC Ferries is willing to continue to be a partner in a solution, but other organizations need to participate. Harold Swierenga clarified that Patterson’s lot will be fenced in soon, as pumps will be coming out of the ground. He said there is already a park-and-ride service at the Fulford Inn, where investigation of future plans is happening with the new owners. With these constraints, Beaver Point Road is the area being recommended for parking. George Ehring clarified background information as follows:

- BC Ferries enquired about and engineering study on the road - three private title land parcels were identified as part of the study - George met with the three owners, learning they are all willing to secede titles, and - a land title lawyer is willing to help with title transfers

George wanted to know why nothing further has happened with respect to freeing up these parcels. Rob said the MOTI has to be the ones to receive the titles first, and then BC Ferries and MOTI can come to an agreement on how to make road improvements. Following that, capital expenditures can be confirmed. George replied that, since BC Ferries knew of these title holders six months ago, the Ministry should also be aware. Rob reiterated that BC Ferries can only wait for MOTI to sort out title issues. Bob Jones expressed concerns that it will take a serious accident or injury in the area to see action happen to rectify this problem. Harold suggested that if any procedural process with respect to these land titles can be expedited, this would be valuable. He asked whether the FAC could expect some answer on how this project is prioritized after the capital expenditure meeting in December. Rob responded that this three-day meeting in December is thorough and has a longer list of projects than there is capital available. From there, decisions go to the Board of Directors for approval in February. One final aspect is that the results of the Commissioner’s review may or may not affect some of these capital decisions. ACTION: Rob Clarke will enquire further with David Hendry as to why the land title transfer (Fulford Road) process has not been completed. Garth Hendren pointed out there seems to be a lot of change at MOTI and it is sometimes difficult to find the appropriate person who can act. Kevin Bell suggested that when dealing with multi-jurisdictional issues, he feels one project manager needs to be coordinating and he hopes BC Ferries is working in this manner. To end the discussion, Margaret handed a copy of her


presentation to BC Ferries and the committee. c. Island Pathways – John Rowlandson, a member of Island Pathways (IP), spoke on the mandate and aims of the organization. With safety issues around non-vehicle travel in mind, IP have focused their efforts on ensuring future Fulford plans can accommodate safe bike access. They have submitted a report to the Master Planning team, as they wanted to ensure cycling was properly considered in road plans. In this, they have identified options for designing two, one-meter bike paths along the roadway, and have now received a letter from BC Ferries confirming there is room on both sides of the road for shared foot/bike access. John then submitted the same report to the FAC for inclusion in the record. Ultimately, IP is concerned that bikes are not included as part of the 20-year plan. John says to help ensure inclusion happens, they put forth five proposals:

- the agreement in place between MOTI and Islands Trust around bike lane standards be respected,

- dedicated bike lanes be implemented as part of any roadway project, - BC Ferries engage cycling groups in further plans, - BC Ferries would benefit in a certificate program in mobility or transportation demand

management, and - community benefit included as part of master planning decisions.

Kevin Bell enquired whether aging demographics have been factored into forecasts for growing cyclists, as he suspects bike use may shrink as the general population ages. John argued that electric bicycles will enhance the ability for anyone to move into a bicycle, and that four of the five largest cycling user cities in North America are in the relative vicinity of Salt Spring Island. He feels the reasons holding back cyclers now are safety concerns and needed infrastructure adjustments. Harold clarified that the two, one-meter lanes were realized at the expense of changes for the original lane width plans in the Master Plan. Garth Hendren added that the CRD is about to receive a master bike-plan for all areas in their region, and he feels this will encourage many cyclists to visit Salt Spring. Therefore, he suggests that plans should include cycling access. John submitted the IP report to FAC. To summarize, Harold noted that the FAC is very concerned that the Phase I plan for Fulford not be delayed any longer as situations with traffic and emergencies are only worsening. He expressed hope this project stays high on the priority capital list as non-discretionary, and that the title issues are settled expeditiously so as to see concrete results as soon as possible.

4. Agenda Items:

a. Chair’s report – nothing to report.

b. Fulford Habour update – discussed during item 3.b.

c. Route 9 options update – Harold Swierenga noted that this is an ongoing topic, and Bob Jones has information and analysis to present. Prior to this presentation, Harold wanted to clarify some details related to the analysis. He asked if the committee could be assured that Long Harbour terminal will maintain a link to Mainland. Rob Clarke stated that BC Ferries is unaware of any plan to change this situation, but he is hopeful multi-party (BC Ferries, MOTI, public) discussions will happen sooner rather than later. He explained that Queen of Burnaby and Nanaimo are nearing replacement and BC Ferries had thus identified the need to think of options in the ‘efficiencies report’ of 2010. BC Ferries wants to ensure that before any significant asset investment occurs, analysis of all options be done. A Simon Fraser University group has been hired to analyze current routes and come up with options for the future. BC Ferries wishes to develop a few solid ‘straw men’ and present them to MOTI for consideration


and discussion, prior to going jointly into public consultation. Government policy decision drive service decisions and they need to be included in this exercise. Rob said this SFU report should be received in the near future.

Harold asked how much flexibility BC Ferries may have to modify routes. Rob replied ‘very little’, explaining that BC Ferries must remain very close to the contract levels. Then Harold requested an explanation of service fee allocation. Rob broke this reply into two parts. First, for the three, non-major route groups, the price caps would move together…that is, a change in the percentage would result in the same increase for all groups. Second, a route group forecast of actual route losses in worked into the next Performance Term, and then service fees are allocated accordingly. Rob added that this process is the same for the Federal/Provincial subsidy process except that Route 12 is excluded.

Kevin Bell asked why Route 9 is not included in the major route group. Rob explained that the idea behind this group was to include routes joining Vancouver Island and the Lower Mainland. These routes have never received service fees and are completely ‘user pay’. However, Route 9 serves the Southern Gulf Islands from the Lower Mainland, so it makes sense to include it in the minor route group. Rob noted that Route 3 is now moving into the major route group as it is very close to functioning on user pay and operates like a ‘major’. He added that the basic allocation for terminal cost is based on vehicle throughput, so routes using the terminal share the costs. The key to the allocation process is to consistently apply the formula.

Kevin next enquired why a ferry operates between Port Hardy and Prince Rupert. Rob said this run is tourism-centric, with a prime focus on the Inside Passage. In winter, service changes and reduces. Finally, the service fee that goes to Northern routes is very significant…thus being the route group that is furthest from user pay.

Next, Bob began his presentation of extensive analysis of Route 9’s efficiency by comparing multiple performance measures across many routes. He said the idea came to him when he read about the idea to restructure Route 9 in the 2010 ‘efficiencies report’ issued by BC Ferries. Bob made comparisons of factors such as revenues, fare box revenue, subsidies, utilization and overall traffic, followed by proposals to modify Route 9 and 5 schedules for improved efficiencies. The charts, graphs and tables presented are included as Appendix 1.

Bob noted that, based on current economic difficulties globally, he expects the Province to consider to face serious financial constraints in the near future and there should not be increased funding to the ferry system. He concluded that Route 5 is heavily, and unacceptably, subsidized for the entire minor route group. Rob said that the idea of having route groups is to spread costs across multiple routes, but that there are a number of factors in play for all costs and how to allocate service fees. He agreed that when analyzing Route 9, Route 5 need also be viewed at the same time, as BC Ferries believes this will lead to the most productive decisions with respect to efficiency and best options for future service levels and schedules.

Discussion around these proposed schedules occurred. Bob summarized that he has put forth different ideas and hope that BCF has the ability to include this in any analysis efforts. Brian Hollingshead commented that all service analysis is not just about dollars, but should also include service considerations. He noted that the Southern Gulf Islands service costs are higher because of geography of multiple islands and the complexity of connecting between Tsawwassen, Swartz Bay and inter-island.

d. Overlength fares modification – Rob Clarke provided background on how overheight fares were replaced by overlength concept because of reluctance of all communities to move to a ‘1/20 of base rate for each foot over 20 feet’ rate. The number of complaints received regarding overlength fares is approximately half of those previously received about overheight. He agrees there is a need to revisit something more rationale, as more and more committees are expressing displeasure with current process. Therefore, BC Ferries will determine what


effect may be to basic rate in order to eliminate overlength fares. ACTION: Rob Clarke to forward the estimated changes required for basic, underheight fares in order to implement a “1/20 fare” for each foot length over 20 feet.

e. Solution for Route 4/1 connection - Harold Swierenga suggested that the answer to a Route 4/1 connection may lie in an electronic ticketing solution. This would include an electronic boarding pass, dedicated line and Swartz Bay and a policy change from BC Ferries to allow priority load by throughfare travelers. Bob Jones noted there had been previous ideas put forth to help eliminate ‘queue jumping’ scenarios.

5. Presentations:

a. Financial performance – Rob Clarke reviewed the Route 4, 6 and 9 financial statements for the 2010 and 2011 fiscal years. This included specifics on revenues, expenses and why figures may have changed from one year to the next.

Rob suggested the committee members review the InterVistas report on elasticity analysis, found on the Commissioner’s website. A discussion followed around demographic shifts and possible effect on traffic trends. Rob added there may be a change coming in the fuel surcharge situation, but that is difficult to forecast because of international oil market prices.

b. Operations Report – Captain MacKay reviewed traffic data, on-time performance (OTP) figures, service issues and capital plans pertaining to Routes 4, 6 and 9. He provided some detail around a Route 9 sailing cancellation that happened in early October due to a liner replacement on the Queen of Nanaimo.

6. Correspondence:

a. Delayed Skeena Queen dockings – Harold Swierenga summarized a letter he had received from a professor working in Victoria and commuting from Salt Spring. The writer noted that the Skeena Queen seemed to be the vessel delaying docking at Swartz Bay in the morning behind other ships there at the same time. This procedure was leading to unreliable arrival times and making him consistently late for his work in the city. Harold asked for Captain MacKay’s comments and perspective. Paul McDaniel first clarified that the Coastal Celebration is only using berth two now, so there is an effort to work on minimizing berth congestion until work is completed at berths four and five; as one of the two is out of service until next spring. Captain MacKay replied that, as some route has to be delayed while short one berth, the Skeena Queen is chosen because the vessel is best able to make up time throughout the schedule. 6. New Business:

a. FAC renewal – Darin Guenette reminded the committee that the new three-year term begins January 1, 2012 and the plan is to determine committee composition by end of December if possible. Where committee members are appointed by a municipal/regional government body, Darin will work with these organizations to learn of the appointees after the November elections are completed. b. Spring meeting and FAC feedback – Rob Clarke said that, by and large, the feedback BC Ferries has received about the WebEx meetings held in April has been positive. He added that although face-to-face meetings are ideal, it was felt that the distance meetings were still very effective; all while saving significant time and costs. Rob then noted that in some cases, it makes sense to bring committee members together, and that BC Ferries would be willing to make arrangements for this to happen. Rob also added that, if a major issue needs to be tabled or there is significant committee turnover, BC Ferries would consider a face-to-face spring


meeting. Bob Jones noted it may make sense for FAC to travel to a BC Ferries facility (like Swartz Bay) regardless of which format was used.

7. Next meeting: Planned for spring 2012, with no specific time window at this time. As soon as potential dates have been identified, Darin Guenette will contact all committees and coordinate meeting times.

Approved:

Capt. Lewis MacKay, Marine Sup’t Date: January 31, 2012 Harold Swierenga, Chair Date: February 9, 2012


Appendix 1 – Route 9 Analysis (Bob Jones)











Salt Spring Island FAC Action Minutes Page 17 of 17

Meeting Date: October 24, 2011

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