Suddenly Almost Half A Million For Ferry Insurance

June 5, 2023

Commissioner Lisa Janicki
Commissioner Peter Browning
Commissioner Ron Wesen

Dear Skagit County Commissioners,

On the 2022 Guemes Island Ferry Expense Report, the Insurance category was charged $572,868. The budgeted amount for 2022 was $120,799 - $452,069 over budget - 374% over budget.

The explanation I received for this unexpected and unbudgeted expense was that it stemmed from Resolution #R20230020 on how to allocate insurance costs across different county departments.

From the information I received from my Skagit County public records request, in 2022, four cars in four separate occurrences sustained minor damage to their vehicles on the Guemes Island Ferry - each determined to be the responsibility of an action or inaction of a ferry worker. The grand total paid to the individuals for all four occurrences was $5,366.93.

This $5,366.93, somehow, turned into $59,348.37 - which was 27.36% of an entire “fund.” From there, it ballooned to $448,878, which was added to the regular ferry insurance premium of $123,990 for the grand total of $572,868 charged to the ferry.

The 2023 Preliminary Budgeted Insurance Expense is $124,423. My understanding is that as the Resolution stands, theoretically, if the ferry sustains even one claim for $1.00 and no other department has a single claim, the entire $1.4 million could be charged to the ferry.

The proposed new ferry model does not take into consideration a variance of $1.4 million in looking ahead next year or the year after.

It is of concern to me that this $448,990 was included as an expense for the following reasons:

  1. 1)  This “expense” goes directly into the operation and maintenance expenses that are used in the ferry fare calculations.

  2. 2)  If you removed this expense from the 2022 expenses, the Guemes Island Ferry would have been under budget by $395,704 - not over budget by $53,173 as was stated on the 2023 Ferry Fare Revenue Target Report.

2022 Budget - $2,851,420
2022 O&M Expenditures (without the $448,878) - 
Difference -  $395,704


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  1. 3)  This artificially inflated actual expense was used in the Ferry Operations Report given to Washington State to determine the distributions of the Ferry Deficit Fund. It is not a regular operation expense to pay an exorbitant percentage of the overall insurance premium for the entire county. For example, just because the County Fair did not have any claims in 2022 doesn’t mean it didn’t benefit from having insurance. This could artificially benefit Skagit County, thus potentially taking dollars away from Whatcom and Pierce counties.

  2. 4)  It concerns me that the additional $448,878, an unprecedented and unexpected expense, was not even mentioned on the 2023 Ferry Fare Revenue Target Report. In fact, “the year 2022 was a typical year for ferry operations” was how the year was described. Is it a typical year to have a new expense that is 16% of the total $2,904,594 O & M expenses?

In addition to my concerns regarding the additional unexpected 2022 expense and the consequences of it, I have further concerns regarding our annual insurance premiums. Not only have they increased 36% since 2018, (excluding the additional $448,878 from 2022) ($90,912 - $123,990) they are significantly more expensive when looking at some comparable ferries - many which insure multiple ferries:

2023 Budgets
Whatcom County Ferry - $85,134
Pierce County - $38,000 (total for 2 ferries)
Casco Bay Island Transit ( KPFF used this ferry line in Guemes Island Ferry System 2023 Rate Study) - $79,200 (total for 5 ferries)

Guemes Island Ferry’s insurance is nearly $39,000 more annually than Whatcom County ferry. In my search to further understand why our insurance premiums are significantly higher for our ferry - even higher when compared to multiple ferry systems - I have asked who our ferry is insured through. Despite requesting this information through a public records request and a phone message to Risk Management, I have not received an answer to this question. What I did learn was that the Washington County Risk Pool (WCRP), which insures Skagit County, does not insure ferries. So my question of who is the insurer of the ferry still has not been answered, and creates even more questions as to how the ferry was charged for $448,878 from the overall county insurance if it isn’t even included in that fund.

My hope in writing all of this to you today is you will take the time to look further into the cause and effect of Resolution # R20230020 and make the necessary changes to prevent this misallocation of funds from happening in the future. Also, please consider adjusting the expenses from 2022 that are being used in ferry fare calculations. And finally, please look into our actual insurance premiums to try and reduce expenses.

Over the past few months there have been many conversations regarding how to increase the ferry fares. At the same time, we have gone from Public Works Director Grace Kane thanking Ferry Captain Rachel Rowe for her efforts to slash $200k from her budget at the beginning of


this year to not only adding the $200K back in, but looking ahead for expenses to be around $4 million in 2 years - about $800K more a year. The proposed model creates the opportunity for operational expenses to continue to balloon without an incentive to control costs. We have no idea where we are going to be in 2 years with the new ferry. Please focus on fixing the issues we currently have, keep the existing ferry fare model, and reevaluate when we have the new ferry operational.


Cindy Kamp
Guemes Island Homeowner

Tags: ferry