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98 Guidelines for Ferry Transportation Services the elements, and a secure waiting area. The design of the terminal can also reflect its imme- diate surroundings and home community and can serve as a catalyst for future development, some of which could benefit the ferry authority or the ferry operator. These locations are often infill, brownfield sites, creating good opportunities for many stakeholders to benefit. Intermodal transit connections. Intermodal transit connections at or near ferry terminals are critical components of the overall ferry transit trip. For riders on passenger-only vessels, the connections at the other end of the ferry trip to their final destinations are important if the ferry terminals are not located near employment centers. Ferry operators can also enter into agreements with other transit operators that allow passengers to receive a discounted transfer ticket on either bus or rail to get them to their final destinations. Quality service. Since 1994, Washington State Ferries has used "Level-of-Service" (LOS) stan- dards to ensure that they are providing an adequate level of service to the public. LOS for WSF is measured in "boat waits" (Washington State Ferries, 2007). A one-boat wait means that 85% or more of general vehicle traffic would not have to wait more than one sailing after arriving at the dock before boarding a boat. While LOS is currently limited to boat wait, the Transit Capacity and Quality of Service Manual (Kettleson & Associates, Inc., et al., 2003) uses the LOS concept to apply to transit passenger waits, speed of service, and many other factors. Universal fare media. It is not uncommon for public transit within one region or jurisdiction to issue more than one form of fare media. Regions with multiple ferry operators also have dif- ferent fare-collection methods. Unifying fare media and fare collection into one form that can be used both landside and for ferries greatly increases accessibility for commuters who transfer between modes. Both public and private operators can gain from having a common fare media, especially electronic media that allow for fare discounts and transfer credits between operators. Analysis of the Ferry Alternative Assess Economic and Financial Impacts Project selection varies for a public or a private venture depending on project financing. The "big picture" issues that need to be considered are similar, but have some distinctions. Private-Sector Economic and Financing Considerations In selecting new ferry service or modifying an existing one, private operators must account for a number of factors within their business plan. Private operators often need to publicly discuss their environmental impacts, but their financial projections are usually private. As a result, their internal business plan documents the financial feasibility of the operation. This business plan, discussed further in Section 9 includes issues such as the following: Capital funding. What is the source of the capital funds needed for new vessels and new or upgraded dock or terminal facilities? Operations cost. How do costs for labor, insurance, leases, professional services, regulations, permits, and insurance add up? What is the total cost to operate the service, and are there economies of scale? Do unit costs decrease as service increases? Labor availability. Are qualified maritime personnel and masters available? Operational funding. What is the source for operating and maintaining the service? How will incidental costs such as marketing be covered? Vessel acquisition. What vessel or vessels are appropriate for the new or modified route? Where will vessels be stored? Ridership forecasts. What is the ridership forecast for the route (by day, month, and year)? Does seasonality play a role in ridership levels? Maintenance. Where will the new vessel be maintained? Will it require a specialized service not already under contract?

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Strategic Planning in Ferry Service Development 99 Fares. What are appropriate fares for the service given its length and/or in comparison with other routes in service? Emergency contingency. What does the operator need to consider in the event of a natural or manmade disaster or unforeseen changes in the cost of labor or fuel? Private operators who do not receive public monies may still be subject to environmental analysis for new services especially if landside improvements are required. New routes are generally not regulated, but in some cases states regulate levels of service, which can either hinder or delay business-related changes. In addition, new terminals, docks, or any waterside infrastructure may require permitting from relevant state or federal agencies. It is important for operators to be aware of state and federal regulations that may pertain to their operations. San Francisco Bay Area Emergency Response California law requires the Bay Area Water Emergency Transportation Authority (WETA) to plan and operate new water transportation services on San Francisco Bay and coordinate maritime emergency response using public transportation ferries. WETA coordinates the Bay Area maritime emergency response for the transportation of people by passenger ferry boats during an emergency; provides representation to state emergency authorities; and activates its Emergency Operations Center, which communicates with the Regional Emergency Operations Center (REOC) and the Metropolitan Transportation Commission (MTC), the region's transportation planning and funding agency. WETA anticipates that its emergency operations capabilities will evolve and increase over time as staff, facilities, vessels, and funding become available (it should be noted that WETA is assuming management con- trol of most ferry services in San Francisco Bay). The WETA Emergency Water Transportation System Management Plan provides for several phases of activity (San Francisco Bay Area Water Emergency Transportation Authority, 2009): Pre-emergency planning. This planning includes identification of public transportation ferry assets, size, ownership, location, and capacity; cataloging of existing ferry terminals; development of a primary WETA Emergency Operations Center; and discussions and drafting of contracts and Memoranda of Understanding (MOU) with local, public, and private ferry service operators to enable execution of the WETA emergency response. Response phase. In response phase activities, WETA focuses on working to effectively communicate and coordinate with other agencies. WETA's first priority is to protect life, property, and the environment. The second priority is to provide emergency water transportation services during the response phase and the third is to restore basic water transportation services generally during the recovery phase of the emer- gency. In the response phase, WETA's primary task is working within the regional emergency transporta- tion response and mutual aid coordination process. Recovery phase. Recovery phase activities could occur within 3 days of the emergency. As soon as possible, WETA will begin to restore basic water transportation services. During this time, WETA will work towards restoration of the normal, pre-emergency WETA services, but may also provide additional or expanded service in the event that bridges, highways, and other facilities are inoperable. Non-emergency operations. These operations involve continuing response training and exercises for emer- gency response personnel to become fully familiar with the procedures, facilities, and systems used during an actual emergency. The exercises, drills, and training also provide feedback to maintain a continuously improving plan.

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100 Guidelines for Ferry Transportation Services Public-Sector Economic and Financial Considerations Ferries are just one "tool" in a region's transportation "toolbox" that public agencies use to deliver access. As examples across the country indicate, the appropriateness of ferry service is dependent on the viability of existing transportation modes. All public actions require allocation of resources through a deliberative process. Transportation projects compete for public resources with schools and public safety, health, and other infrastruc- ture programs. Within transportation budgets, ferries compete for funding with other modes. Decisionmakers try to use the limited funding available to benefit the greatest number of people. When thoughtfully planned and implemented, ferry service can benefit a large number of peo- ple. Compared to other investments, ferry service may cost less. A ferry route may open a new development site that is geographically close to important destinations that have previously been difficult to access. Agencies will consider the total life-cycle cost of the ferry investment versus other investments and also consider the economic impact of the ferry route. A private-sector operation must make a profit and must take this into consideration when deciding whether to offer ferry service; the public-sector decision is more subjective and includes consideration of impacts other than economic ones. Determine Efficiency and Effectiveness Criteria In determining efficiency and effectiveness criteria for evaluating potential ferry services, it is important to be aware of (1) the different market segments that ferries can serve and (2) whether the ferry service under consideration will be a public or private entity. In this research, ferry services are understood to fit into two broad market segment categories: Transit (no vehicle access), which includes both urban services (the vast majority) and also passenger-only, intercity services. Urban ferry services do not carry automobiles, and they com- plement a travel market with many choices. Urban ferry services are more like transit opera- tions than traditional maritime operations. Ferries that operate outside the metropolitan area or between metropolitan areas and do not carry vehicles are also ferries--transit/intercity. Highway-oriented essential ferries, which allow vehicle access as well as walk-on passengers, and primarily substitute for a bridge or other fixed crossing in a rural, island, or low-density corridor where travel distances are lengthy or typically interurban or intercity. These ferry services are usually the only choice in the market. In addition to being categorized by the market segments they serve, ferry services can be cat- egorized by whether they are publicly sponsored or private-sector initiatives. Publicly sponsored ferries are designed to meet a public purpose, while private-sector services focus on financial risk and reward. Public sponsorship usually results from a desire or expectation that ferry services will result in a publicly desired end. For example, better access to a location can increase property values, result in faster travel times, and create economic activity. These are benefits that can accrue when using ferry services as a means to achieving a public objective. If the public sector is already engaged in providing metropolitan or urban access and mobility, ferry services can be consid- ered as another tool to increase the economic competitiveness of the region. Private sponsorship is always based on return on investment (or profit). Ferries are capital- intensive enterprises, and investors need to understand the potential risks and rewards with investment in ferry services and a particular ferry route. Since investment capital can be placed almost anywhere, opportunity cost is an important concept for the ferry entrepreneur. In this research, it was found that private sponsors defined "return on investment" broadly. Examples

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Strategic Planning in Ferry Service Development 101 include corporate entities where ferry services share common fixed expenses with other corpo- rate businesses (such as marine yards or other maritime operations), as well as real estate exam- ples, where ferry services provided access to give value to the land development. In all cases, the basic operating principles (and the criteria that accompany them) are the same whether the boat is carrying cars across an isolated river or carrying people into a crowded city center. Figure 7-1 illustrates the sequence in which various criteria should be considered when mak- ing a decision about the establishment of new ferry services. A common requirement for all ferry operators, whether public or private, is to consider permitting criteria. Following the consider- ation of permitting criteria, decisions must be made on the basis of criteria that vary with the type of sponsor (public or private), but include some crossover on publicly regulated services. As the decisionmaking process proceeds, the market (transit--urban/intercity or highway-oriented/ essential) determines the appropriate criteria, and, in the final step of the decisionmaking process, operational criteria are considered, and these are the same for all kinds of ferries. Permitting Criteria Publicly Sponsored / If Privately Privately Regulated Services Operated Services Criteria Operated / Regulated Criteria Transit Highway-Oriented Urban/Intercity Essential Services Criteria Services Criteria Operational Criteria Figure 7-1. Criteria flow chart.

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102 Guidelines for Ferry Transportation Services Permitting Criteria The establishment of any transportation service, including ferry service, will eventually require that a governmental authority issue a permit either for operations (in a regulatory system), or for a land use action (finding that the transportation use is consistent with land use regulations and allowing construction of terminals), or for the use of public lands (such as tidelands, shore and port facilities, or sovereign lands of the state). To issue the permits required for ferry service, the responsible government agency will need to consider the impacts and the benefits of the pro- posed service. The case studies presented herein suggest that an agency should consider the following criteria when reviewing a terminal proposal: Economic criteria The proposed terminal and the range of ferry services proposed are consistent with the community's vision for the area, as articulated in adopted land use plans. The terminal and the service are consistent with a local, regional, or statewide transporta- tion plan and will assist in delivering the goals of that plan. The terminal and the service are not consistent with the current land use plans or conflict with existing transportation policy, but will deliver a major economic benefit to the area that will create an overriding consideration of support. Impact criteria The terminal and service have greater net environmental benefits (i.e., fewer people driv- ing, lower emissions, fewer greenhouse gases, and/or better development patterns) than the no-build alternative. The terminal is convenient to connecting transportation services (transit, rail, and high- way), ensuring seamless connections and reducing impacts on local roads and local transit services. The terminal's location actively increases the ferry service's positive impacts (e.g., sustained ridership, easy access via transit or vehicles, non-environmentally sensitive area, and/or prime potential to include in joint development opportunities). Publicly Sponsored/Regulated Services Criteria A few jurisdictions regulate ferry services economically (the U.S. Virgin Islands and BC Fer- ries are two examples). However, in those areas that do regulate ferry services, the criteria are often the same as those governing expenditure of public funds. These criteria generally involve avoiding unnecessary and wasteful competition, maximizing use of the existing transportation infrastructure, and providing efficient and affordable services to the public. The following cri- teria should be considered in decisions concerning the establishment of publicly sponsored/ regulated ferry service: Economic criteria The proposed service will create additional and necessary capacity and access and will pro- mote economic development and assist in delivering adopted land use plans. The proposed service will not result in diversion of users from parallel facilities or services that already exist and have adequate capacity. The proposed service will provide additional emergency and disaster response capability. Financial criteria (publicly sponsored services) The combined capital and operating cost (life cycle) of ferry services does not exceed the cost of fixed facilities (i.e., bridges and rail links) and their public transit systems. The proposed service can demonstrate sustained projected ridership levels that will not be impeded by other forms of transportation or transit services. Equity criteria Essential, lifeline ferry services are provided in remote and isolated communities to ensure access, provide economic stability, and sustain ridership.

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Strategic Planning in Ferry Service Development 103 Privately Operated Services Criteria A private enterprise has one overriding consideration: to make a profit. There are several financial criteria that correspond to this requirement: The ferry service makes a reasonable profit and return on investment that is competitive with other potential uses of investment funds. The ferry service has a reasonable balance between the risks assumed in investing in and oper- ating the service and the net revenues received from the service. The ferry service sets fares that guarantee a reasonable rate of return based upon seasonal rid- ership demands. Transit Urban/Intercity Services Criteria Urban/intercity ferry services, as illustrated in the case studies presented herein, are almost always subsidized, although the range of subsidies varies. In New York, for example, ferry facil- ities are paid for with public monies, but operating costs are not. In other areas, such as Seattle, operating costs are subsidized. The involvement of public funds in urban/intercity ferry services means that these services typically have to meet criteria regarding efficiency, effectiveness, and the environment such as the following: Efficiency criteria Ferry services reduce the need for additional fixed facilities. Effectiveness criteria The ferry services will be well used to the extent they represent significant additional capac- ity. A reasonable threshold would be 50 percent of the capacity of a freeway traffic lane (about 1,000 people per hour). Ferry service is targeted to areas that have few or poor transit options. Ferry service provides a time savings relative to other alternatives (it is faster due to con- gestion or faster due to a more direct travel route). Ferry service will enable land uses that can create enough demand to use the vessel capacity efficiently. Ferry vessel size and capacity is balanced with demand to achieve a high ratio of seat occu- pancy to seat capacity, avoiding fuel and labor waste. Wherever possible, ferry terminals are simple structures that provide necessary amenities for riders. Environmental criteria The ferry system represents the best practices in vessel design and engine emissions and the per-passenger emissions are equal to or less than comparable transit systems. The ferry system, on a life-cycle basis, including the capital elements, results in lower carbon emissions per passenger for a comparable trip on other modes. Highway-Oriented Essential Services Criteria Essential ferry services typically involve creating links in the highway network that permit vehicles to continue travel in the most direct manner to a community separated from others by a large body of water. Sponsors of highway-oriented ferry services should consider measuring existing and potential services against efficiency and effectiveness criteria such as the following: Efficiency criteria The ferry service will be sized correctly to the market; vessels will be large enough to meet the anticipated demand, but the average vehicle deck occupancy will not be less than 50 percent (aggregated). Ferry services are less expensive to operate and capitalize on a per-vehicle basis than the construction of a bridge or other fixed link. Services are adjusted to reflect seasonal ridership peaks and troughs in demand.

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104 Guidelines for Ferry Transportation Services Effectiveness criteria The ferry services will use best practices to manage peak demand and increase off-peak use to ensure productive use of system investment. Operational Criteria The ferry case studies presented herein suggest several operational criteria for all types of ferry services: Safety and security criteria The ferry operator meets all regulatory requirements for safety, operations, and maintenance. The ferry operator creates a "culture of safety" in the workplace. The ferry operator adequately and comprehensively trains staff and licensed operators. The ferry operator complies with all security provisions outlined by the Department of Homeland Security. The ferry operator complies and participates in emergency disaster relief plans and drills wherever appropriate. Reliability criteria The ferry operator employs best practices to ensure reliable operations (e.g., preventative maintenance and adequate staffing). The ferry operator employs practices to reduce delay caused by passengers or other exter- nal factors (e.g., adequate cut-off times, adequate scheduling of connecting transit services, timely delivery of provisions, and so forth). The ferry operator develops contingency plans that consider the impacts of weather, impacts resulting from unavailable vessels, or impacts from high peaked passenger loads. Efficiency criteria The ferry operator uses best practices in crew scheduling to ensure productive and efficient work schedules. The ferry operator uses competitive processes to procure fuel, equipment, and other provisions. The ferry operator sets performance metrics to measure efficiency (e.g., operating cost per seat, change in operating cost, and so forth). Effectiveness criteria The ferry operator considers the most efficient use of vessels including operating vessels across different routes to achieve efficiencies. Ferry terminals are selected to minimize the water passage but still ensure the most direct travel route for passengers. The ferry operator (passenger ferry) uses terminal designs and operating practices that allow vessels to arrive, alight passengers, board new passengers, and depart within 5 minutes. The ferry operator maximizes the number of passengers on each vessel trip by creating seamless transit and other intermodal connections. The ferry operator (vehicle ferry) operates a reservation system to reduce peak congestion and use available capacity in the off-peak period. The ferry operator uses pre-paid fares to reduce queuing and delays at terminals. The ferry operator sets performance metrics to measure effectiveness (e.g., occupancy per seat, change in occupancy per seat, and so forth). The ferry operator sets fares that are both competitive with other transit modes and ensure a reasonable farebox recovery rate (or profit) for the operator. Environmental criteria The ferry service operates with emissions no greater than generated on a competing mode, based on a comparable trip (i.e., a highway trip might be longer and result in additional vehicle miles traveled). The ferry operator uses the best available engine technology to reduce emissions.