State ferry workers to forgo pay raises

OLYMPIA — About 1,500 state ferry workers will forgo pay raises with the hopes of staving off layoffs.

On Monday, Gov. Chris Gregoire and leaders from five unions announced the agreement, which likely will save the state $18 million over the next two years. The raises, ranging from 1.6 percent to 10.7 percent, had been negotiated with Gregoire last year.

Transportation Secretary Paula Hammond said the ferry system could have faced significant cuts without the agreement.

Brett Olson, executive secretary for the Puget Sound Metal Trades Council, said the decision came down to saving jobs.

"It's not in our DNA to forgo raises. We chose to be part of the solution," said Olson, who is also with the International Brotherhood of Electrical Workers Local 46.

Gregoire and the state Legislature are trying to plug a state budget deficit that could reach $6 billion over the next two years.

The ferry system is under particular pressure. The Governor's Office said if the existing level of service continues under the same financial constraints, there will be a $3.5 billion shortfall over the next 22 years.

Washington State Ferries chief David Moseley said the ferry system "is not financially sustainable."

By renegotiating their contracts, he said, the unions have "recognized that, they've stepped up to help us take the next step, to make it financially sustainable."

The unions are: Inlandboatmen's Union; Masters, Mates and Pilots (both deck and watch supervisors); Puget Sound Metal Trades Council; Marine Engineers Benevolent Association; and Office and Professional Employees International Union.

Also Monday, the House Transportation Committee held a hearing on a bill that would allow companies outside the Washington state to bid for ferry-construction contracts.

Last year, lawmakers directed transportation officials to place the first ferry order in more than a decade, but the purchase came with one major clause: The vessel had to be built in Washington.

Todd Pacific Shipyards was awarded a contract in December for construction of a 64-car ferry to serve the Port Townsend-Keystone route. The Seattle company's bid of more than $65 million was about $16 million more than the state's estimate.

Rep. Christine Rolfes, D-Bainbridge Island, who is sponsoring the measure to allow ferries to be built outside Washington, said the move would generate competition and qualify the state for federal stimulus dollars.

Gregoire said she supports ferry construction in-state but believes in the need for competition.

Todd Pacific, which won't lose its contract if the measure passes, opposes the legislation. Steve Welch, the company's chief executive officer, said the bill wouldn't necessarily save money because it is unclear how much the state may receive in federal funds.

"I think when all of the costs are considered, I think the best policy is to build in-state," Welch said.

Todd built the state's last two new ferries in the 1990s. It was the only bidder for the Port Townsend-Keystone project.

Information from The Associated Press is included in this report.

Jennifer Sullivan: 360-236-8267 or jensullivan@seattletimes.com