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Auditor’s report questions costs of Chetzemoka

Washington’s ferries are among the most expensive in the nation, and the Chetzemoka, which serves Vashon, was especially costly to build, according to a recent state audit.

The Chetzemoka was highlighted in a 70-page special audit on ferry construction released last week by the State Auditor’s Office, which recommended several moves that could bring down the cost the state pays for ferries.

In the audit, the $80 million Chetzemoka — which has been criticized by some Islanders and lawmakers for its high fuel consumption and perceived mechanical problems — was highlighted as an example of a vessel the state paid a high price for.

The 64-car ferry, which was built in 2010 and replaced the Rhododendron on the Point Defiance-Tahlequah run early last year, cost the state nearly twice as much as the Massachusetts ferry it was modeled after, the Island Home. What’s more, in an auditor’s study that compared what ferries should be expected to cost with their actual costs, the Chetzemoka topped the list of 39 ferries nationwide, costing more than $25 million more than expected. The report went on to explain that the Chetzemoka’s high costs were largely due to the tight timeline under which the state built the vessel.

Three other ferries — the Chetzemoka’s two sister ships and one other — also cost more than expected, according to the report, while two ferries built in the late 1990s cost less than expected.

Washington State Ferries (WSF) director David Moseley said in an interview that there were some lessons the agency could take away from the audit, but he defended the high cost of the Chetzemoka.

Moseley said the auditor’s office failed to take into account a number of factors that can drive up ferry costs, including the wage difference in Washington compared with other states. What’s more, he said, the state needed to get the Chetzemoka on the water quickly after the Steel Electric class was suddenly pulled from service, and expediting the project greatly added to its cost. In WSF’s official response, included in the audit report, the ferry system said that by removing costs resulting from factors out of the agency’s control, such as the expense of having to expedite construction, the Chetzemoka’s cost is comparable to the Island Home.

“It’s not an apples to apples comparison,” Moseley said in an interview.

Indeed, according to the audit, the largest cost difference between the Chetzemoka and the Island Home, which WSF purchased the design for, were the changes ordered after construction began. Change orders for the boat — which the state began to build before a design was finalized — amounted to $10 million, compared to just $625,000 in the construction of the Island Home.

Moseley noted that the Chetzemoka’s sister ships, nearly identical and both built after the Chetzemoka, cost significantly less. As a class, the three boats were under budget.

“The second two boats were so substantially lower. That indicates that we payed a premium to get the Chetzemoka into service as quickly as we could,” he said.

Also in the report, the auditor noted that in adjusted 2011 dollars, the six WSF ferries built in the last 20 years are among the more expensive in the United States. Among 39 ferries built in the country since 1991, the 202-car Jumbo Mark II ferries, also some of the largest in the country, topped the list of most expensive boats. The 64-car Kwa-di Tabil ferries — the Chetzemoka and its two sister ships — were also high on the list, ranking sixth, 11th and 12th most expensive.

While the auditor identified a few practices the state could improve to bring down ferry construction expenses, such as completing vessel designs before construction begins, it largely attributed the high ferry costs to strict state regulations. State law requires that ferries be built in Washington, preventing more competitive bids by out-of-state builders, the audit report says. In addition, a law requiring that ferry-building shipyards have a specific apprenticeship program in place prevents some local shipyards from bidding.

In the case of the Chetzemoka, just one shipyard bid on the construction, and it won the project despite bidding higher than the state expected to pay. The same shipyard also built the Jumbo Mark II vessels and is currently constructing two new 144-car boats.

The audit report recommended that state lawmakers enact legislation to encourage greater competition among shipyards, perhaps opening projects to out-of-state builders when in-state bids come in high. It also recommended that the state reexamine the apprenticeship program requirement for shipyards, making it possible for more companies to participate.

The ferry audit will likely be a topic of conversation this legislative session, said Rep. Joe Fitzgibbon (D-Burien). Fitzgibbon, who serves on the Joint Transportation Committee and is part of the ferry caucus, said he thought lawmakers would be open to making changes to the apprenticeship program but likely wouldn’t lift the requirement that ferries be built in the state. Ferry construction, he said, brings countless jobs to the state and boosts the local economy.

“I think we get a large economic benefit from building here in Washington state, and I don’t think we want to have all those jobs go out of state,” he said.

As for the Chetzemoka, Fitzgibbon said he understood the ferry’s short construction timeline drove up costs, but he thought the state, which is always looking for ways to save, learned a lot from the project.

“I think there were a number of issues with the Chetzemoka that we don’t want to repeat,” he said.

 

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