In the midst of touring ferry-served communities, Washington State Ferries director David Moseley spoke in Kitsap County last Wednesday about the ferry system’s well-documented problem — most notably its chronic shortage of money.

“I took this job because I thought that after 30 years of experience if I’ve learned anything now is the time to try to apply that to a big challenge,” said Moseley, who took over the system this spring. “And this is a big challenge. The ferry system is not financially sustainable into the future.”

The biggest problem continues to be funding for operations and infrastructure, as outlined in a recent Legislature-ordered study.

The system has struggled since the 1999 passage of Initiative 695, which eliminated the Motor Vehicle Excise Tax funding on which WSF greatly relied.

Proposed solutions are expected to emerge in the 2009 Legislative session.

In the meantime, Moseley said, WSF is focusing on service and vessels. Aging vessels have caused problems on runs throughout the system.

Since no backup boats are available, vessels must be shifted between routes and service is often affected.

The first of five new boats is slated to go into service in spring 2010 on the troubled Port Townsend-Keystone run. No new boats have been built for nearly a decade.

Joining Moseley on Wednesday was WSF Director of Terminal Engineering John White, who said the system’s struggles will directly impact plans for Bainbridge Island.

Bainbridge terminal planning, which two years ago was in full swing, has since ceased. In fact, all ferry capital projects — except maintenance and preservation efforts — are on hold while ferry financing is sorted out.

“While the planning that was going on before the legislation was top notch, I think there’s a certainty in this that there’s no way we could ever deliver all of that in the near-term future,” White said.

A massive overhaul to the Bainbridge terminal was slated to begin next year before the Legislature ordered a WSF slowdown.

Now the ferry system is focusing on short-term safety fixes, like the new crosswalk signal on Olympic Drive, White said. Designed to better manage the dangerous overlap between cars, bikes and pedestrians coming to and from the ferry, the light was supposed to go online Wednesday, but a glitch delayed its use until later in the week.

White cited improved traffic circulation and stormwater treatment, and better access for transit, bikes and pedestrians as other immediate priorities on the island.

Renovation work is proceeding at the maintenance yard, which has been an ongoing source of tension between the city and WSF. (See “In Our Opinion,” Page 4).

The city wanted greater environmental scrutiny of the project, but WSF in February won an appeal to maintain lead agency status on the project.

Many islanders have for decades fought for a public boat haul-out facility at the site, basing their claim on a 1974 ruling by the state Shoreline Hearings Board. Others would like to see the maintenance yard leave the island altogether, something ferry officials have repeatedly said won’t happen.

Moseley said WSF leaders “definitely want to have some conversations with the city about how we can make (the facility) work for you and work for us.”

Council members said the maintenance yard will continue to be an issue until something changes.

“It’s a thorn because of our special crown jewel which we call Eagle Harbor and how we’re not getting highest and best use,” Council Chair Bill Knobloch said. “I’m certainly hoping comments I hear tonight will bear some viable solutions.”

Councilwoman Hilary Franz said ferry traffic continues to be a problem. Planned traffic light synchronization will help, she said, but permanent solutions to worsening traffic at some point should be addressed.

“I live in the northern part of the island and that 305 commute, whether it’s taking my kids to school or getting to a meeting, impacts me significantly. And I know it impacts a large segment of this population,” Franz said. “It’s actually impacting our side-streets.”

Others talked of ensuring a fare structure that doesn’t penalize commuters in ferry communities already facing high fares.

Councilman Chris Snow said the dialogue between WSF and the city should continue. Otherwise, conflicts will invariably arise.

“One of the things that can make it harder is if we somehow get at loggerheads,” he said. “We must avoid that at all costs.”

After the meeting with ferry officials, councilors approved the appointments of three Harbor Commissioners; scoping work on a pair of shoreline projects at Blakely Harbor and Strawberry Plant; and gave conditional preliminary plat approval to the Opal Ridge development, near Gazzam Lake.

A proposal by City Administrator Mark Dombroski to push back the implementation of a biennial budget will go to the council’s Finance Committee before coming back to the full council for a decision.

Councilors last year voted to change to a biennial budget to improve efficiency.

Dombroski said that should still happen eventually, but a delay is needed because the city doesn’t have the policies or projecting tools in place to make such a big change.

Since a biennial budget can only be implemented in odd numbered years, the change would go into effect in 2011-2012.

Councilors will discuss the capital plan in a daytime workshop Wednesday that begins at 10 a.m. at City Hall.