Prince of Wales-Ketchikan ferry loses state subsidy

The Inter-Island Ferry Authority ship Stikine sails through Ketchikan’s Tongass Narrows. Photo by Ed Schoenfeld, CoastAlaska News.

Southeast’s Inter-Island Ferry Authority will soon be short on cash. The authority sails between Prince of Wales Island and Ketchikan.

Officials say what’s known as the IFA has only about four-fifths of the money it needs for the next budget year, which begins in July.

General Manager Dennis Watson says that’s because the authority did not get an appropriation from the Legislature.

“Generally, in one form or another, we get some assistance from them every year. It’s a very important part of our operation. But the request was not granted. So it left us short and we are scrambling right now to try to identify alternative funding sources,” he says.

The Hollis-based IFA ferry Stikine sails daily, year-round, except for some holidays. It’s a nonprofit operation separate from the Alaska Marine Highway System. (Read more about the IFA.)

Watson, who is also mayor of Craig, says the authority looked at dropping one of its two crews and reducing service to four days a week.

But it’s locked into personnel costs it would still have to pay. And dropping sailings would lower revenue and hurt Prince of Wales communities dependent on the ferry.

“We have people who actually have businesses that are built around us operating. We have a large fish-receiving plant out here in Craig and they use our service 100 percent. And if we don’t operate seven days a week, there are a lot of people who suffer because of it,” he says.

Watson says running the system costs about $4 million a year. Three-quarters of that comes from passenger and vehicle fares. The federal government also chips in.

That leaves a three-quarter-million-dollar gap, which the Legislature usually fills.

“We are working with the staff of the federal delegation to see if we can identify federal sources to help us with this,” he says.

Watson says raising rates won’t work either. Past experience shows ridership drops when ticket prices are much higher than they are now.

The Inter-Island Ferry Authority has a second ship, the Prince of Wales, which is tied up except for when the Stikine is in for maintenance.

Officials have considered selling it, to raise some revenue and cut docking and insurance costs.

But Watson says it’s needed as a backup vessel in times of emergency.

“Last year we swallowed two valves in one of our main (engines) in our primary vessel. And by that evening we had them swapped out and the people who were waiting in town, we got them over to Prince of Wales. Had we not had that vessel, things like that would have not been able to happen,” he says.

The IFA bought a second ship to sail a northern route between Coffman Cove, Wrangell and Petersburg. But ridership was low, and the sailings were dropped. The separate North End Ferry Authority plans to resurrect that route soon.

Meanwhile, there’s no threat of an immediate shutdown, because the IFA has financial reserves that can take it through early next year. But draining those would leave the system vulnerable to future shortfalls.

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