House Appropriations, Transportation Ferry Division Jed Dixon, - PowerPoint PPT Presentation

House Appropriations, Transportation Ferry Division Jed Dixon, Assistant Ferry Director April 1, 2015

Ferry Division – System Overview • 2 nd largest state operated ferry system in the US • 7 scheduled routes • 1 emergency route • 12 terminals • State owned shipyard • 4 field maintenance shops 2

North Carolina Ferry System Vehicles Carried - 10 Year Trend 1,200,000 1,000,000 800,000 600,000 400,000 200,000 0 04 - 05 05 - 06 06 - 07 07 - 08 08 - 09 09 - 10 10 - 11 11 - 12 12 - 13 13 - 14 FERRY DIVISION SOUTHPORT CHERRY BRANCH CEDAR ISLAND SWAN QUARTER PAMLICO HATTERAS CURRITUCK 3

Route Comparison FY 14 Vehicles Carried Swan Quarter 3% (29,325) Hatteras 34% (305,744) Cedar Island 7% (63,152) Southport Currituck 19% (176,039) 3% (24,450) Cherry Branch Pamlico River 26% (238,681) 8% (71,044) 4

Seasonality Average Vehicles Carried 60,000 50,000 40,000 30,000 20,000 10,000 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Southport Cherry Branch Pamlico River Cedar Island Swan Quarter Hatteras Currituck 5

North Carolina Ferry System Route Profiles 2015 Route Crossing Vessels Toll (miles) (mins.) Currituck 4.69 45 1 - Pamlico River 3.38 30 1 - Neuse River 1.92 20 3 - Hatteras 8.68 60 9 - Swan Quarter 26.43 150 2 Yes Cedar Island 22.63 140 2 Yes Southport 3.43 35 2 Yes 7

Tolling Rates Fare Class Southport Swan Quarter Cedar Island Pedestrian $1 $5 $5 Bicycle $2 $3 $3 Motorcycle $3 $10 $10 Vehicles < 20 ft. $5 $15 $15 20 ft. to 40 ft. $10 $30 $30 > 40 ft. $15 $45 $45 8

Toll Revenue – 5 Year Trend 2.20 2.10 2.00 1.90 Millions 1.80 1.70 1.60 1.50 FY10 FY11 FY12 FY13 FY14 9

RPO/MPO Actions on Ferry Tolls • Albemarle RPO – No Action Taken • Mid East RPO – No Action Taken • Down East RPO – No Action Taken • Wilmington/Cape Fear MPO – Voted to raise tolls from $5 to $7 for vehicles 20 feet or less.* *Anticipate implementation 2015. 10

Economic Benefits North Carolina Ferry System Table 3 from ITRE Report 2009 11

O&M Expense - Five Year Trend Expense by Major Category* $45 $40 $6 $7 $6 $35 $6 $7 $6 $6 $30 $5 $6 $4 $25 Millions $20 $15 $29 $29 $27 $26 $26 $10 $5 $0 FY 09/10 FY 10/11 FY 11/12 FY 12/13 FY 13/14 LABOR FUEL + LUBE OVERHEAD + SERVICES + MATERIALS *Expenses prior to offsetting revenue. 12

FY14 O&M Expense Detail - $41.5M $2,084,802 $1,051,215 Labor 69.6% $3,305,675 Lube Oil 0.4% $6,005,140 Fuel 14.5% Overhead 8.0% $171,235 Materials 5.0% $28,885,365 Services 2.5% 13

Staffing Summary - Headcount Temporary Emp. Pool Created in 2010 & New USCG Staffing Requirement Average Headcount 560 540 520 500 480 460 440 FY 09-10 FY 10-11 FY 11-12 FY 12-13 FY 13-14 14

Factors Driving Recent O&M Cost Increases • 2010 USCG requires crew changes for 11 vessels. This change required hiring 44 crew members. Approx. + $2.2M per year • 2012 Added Turnpike for reservations and toll collections. Up to + $500K per year • 2013 USCG mandates 10 new homeland security positions. +$500K per year • 2014 Hatteras Alternate channel becomes permanent route. + $2.0 Million per year. • Combined annual increase of + $5.2 Million 15

O&M Cost Containment Measures • 2015 Schedule Adjustments  Sound Routes - projected annual savings $500K  Pamlico River - projected annual savings $790K  Continue to evaluate demand on a monthly basis to determine possible areas for additional efficiencies • 2015 Change in Dry-dock Requirements for M/V Hunt  Estimated savings of $2.0 Million over the expected life of the vessel • Innovative Maintenance Practices 16

Supplemental Revenue Generating Activities • Wanchese Fish Company  2012, 30 day lease, $38K • Maintenance Services for Other Agencies:  Army Corps of Engineers – 4 dredges  NC Cultural Resources – Elizabeth II  NC Division of Marine Fisheries – Various Vessels  Potential for Commonwealth of Virginia 17

Supplemental Revenue – Other Opportunities • Advertising and Sponsorship • Utilization of Surplus Real Estate (cell phone towers, billboards, etc.) • Wi-Fi • Increased Vending and Concession Items 18

Operational Challenges • Attracting and retaining skilled employees • Peak period capacity constraints – especially at Hatteras • Shallow water with shifting shoals • New maintenance requirements – Shipyard schedule • Aging fleet and facilities 19

Operational Challenges - Shipyard Schedule US Coast Guard requires ferries to be dry-docked twice every 5 years • Dry-dock requirements  Prior to 1998:11 of 21 ferries  Current: 22 of 22 ferries • Shipyard workforce  Prior 1998: 100  Current: 62 • Man-hours per dry-dock  Approximately 8.5K to 12.5K 20

Operating Challenges / Shoaling Hatteras - Ocracoke Alternate Route Hatteras Ferry Channel CLOSED 21

Operating Challenges / Shoaling Hatteras - Ocracoke • Hatteras Ferry Channel – 4.3-miles  Emergency Area Federally Maintained  Constant Dredging  52 departures/day (peak) • Alternate Route – 8.6 miles  Natural Deep Water Channel  Approx. increase of $175K per month in labor/fuel  42 departures/day (peak) 22

Hatteras Shoreline Erosion 23

Army Corps of Engineers Funding for Hatteras Ferry Channel Dredging Fiscal Year Regular Federal Supplemental Fed. Non Federal Appropriations Appropriations/ Contributions Hurricane Relief 2009 $210,000 $191,000 $0 2010 $50,000 $142,000 $0 2011 $50,000 $0 $0 2012 $49,000 $2,000,000 $1,433,000 2013 $49,000 $2,000,000 $0 24

Operational Challenges Aging Fleet and Facilities • Ferry vessel replacement funded through:  Ferry tolls dedicated to route via capital reserve accounts  Division funds through STI  Division generated receipts • MAP 21 - FHWA formula based program  NC Ferry estimated receipt approximately $1.5M • Current sources do not meet projected needs for fleet replacement and capital improvements 25

Fleet Condition Hatteras River Age (years) Sound Class Condition Class Class 0 to 5 0 2 1 Good 6-15 0 0 5 Good 16-25 7 2 2 Average 25+ 0 2 1 Critical • Replacement Cost (FY14$):  Sound Class Vessel New Construction approx. $18M  River Class Vessel New Construction approx. $12M 26

Capital Improvement Plan Summary 20-Year CIP and O&M Plan Vessels & Facilities CIP (Unit) CIP (YOE $) O&M (Rehab) O&M (Rehab) (Unit) (YOE $) Tug 3 $9,532,618 0 $0 Barges 3 $643,029 0 $0 Synchro-lift 0 $0 1 $1,781,529 River class ferry 6 $80,172,525 7 $28,333,525 Sound class ferry 3 $37,385,460 1 $8,040,413 Hatteras class ferry 0 $0 3 $17,808,127 Facilities Projects 1 $1,634,957 17 $37,029,406 Total Number of Vessels 15 12 Total 20-Year Cost $129,368,589 $92,993,000 Average Cost Per Year $6,468,429 $4,649,650 1 CIP facilities include new mooring facilities 2 3.5% p.a. escalation assumed based on 2004-2014 historical escalation indices for labor and material used by the Navy for steel vessel building, Bureau of Labor Statistics. Year-over-year escalation presents significant http://www.navsea.navy.mil/Organization/SEA05/indices.aspx 27

Other Unfunded Short-Term Capital Needs Item Cost Compliance with new USCG $1,125,000 Regulations Shipyard (HVAC, Roof, Boiler) $1,100,000 Shipyard Equipment Replacement and Water $700,000 Tower Repair* Fire System Refurbishment $600,000 * Included in Governor’s Recommended Budget 28

Recent Budget Actions Spoil Site Rehabilitation • Project Cost $1.15M • Estimated Completion 2016 Location Planned Remaining % Complete Southport $100,000 $67,311 32.7% Fort Fisher $150,000 $66,733 55.5% Cherry Branch $400,000 $276,790 30.8% Swan Quarter $500,000 $446,644 10.7% 29

Recent Budget Actions Dredge Carolina Replacement • Project Cost $ 7.9M • Anticipated Delivery Date Fall 2015 30

Passenger Ferry Feasibility Study • Research all aspects of passenger ferry operations including:  Vessel type  Pedestrian Usage  Parking  Shore side improvements  Transit needs • Study Complete – Dec 2015 31

Passenger Ferry Route 32

Hatteras Congestion Vessel Information: Length – 91 feet Width – 30 feet Draft – 2.5 feet forward, 5 feet aft Speed – 28 knots Capacity – 149 passenger Crew – 1 Captain, 2 Deckhands 33

FY2015-16 Budget Request Based Recurring Non-Recurring Net Change Total Appropriation (Hatteras Route) (Shipyard) $38,900,395 $850,000 $700,000 $1,550,000 $40,450,395 The Ferry Division continues to seek new efficiencies to offset increased operating costs due to external factors and USCG requirements, and to also explore revenue opportunities – while improving customer service. Key initiatives in 2015 include evaluation of a passenger ferry service between Hatteras and Ocracoke Village to reduce congestion and lower operating and capital expenses, and development of new maintenance practices. 35

Jed Dixon Assistant Ferry Director jedixon@ncdot.gov Jeff Mann Deputy Secretary for Transit 36