Ferry Advisory Committee Meeting Minutes

Southern Sunshine Coast Ferry Advisory Committee Page 1 of 5 Meeting Date: November 8, 2006

Meeting Details: FAC: Southern Sunshine Coast Ferry Advisory Committee Date: November 8, 2006 Location: Seaside Centre, 5790 Teredo Street, Sechelt Time: 9:30 a.m. – 1:00 p.m.

Attendees: Committee: BC Ferries: Chair, Ed Steeves Captain Steve Graham – Marine Superintendent Pat Barber Ian Downie – Horseshoe Bay Terminal Director Jakob Knaus Chris Morris – Acting Langdale Terminal Manager David Dick Gary Leitch – Manager, Stakeholder Relations &

Consultation Marita Paul-Franke Amar Johal - Director, Sales and Community Relations Betsy Terpsma – Community Relations Manager Captain Janice Lloyd – Senior Master, Queen of Surrey Absent: LeeAnn Johnson Candace Campo Barry Cavens

Guests: 6 members of the public

1. Call to Order: The meeting was called to order at 9:35 a.m.

2. Introductions: Round table introductions were completed.

3. Approval of Agenda: The agenda was amended to include four more items: Langdale Terminal Issues, Request from the Gibson’s library, Langdale terminal upgrade update, TV in children’s play area.

4. Correspondence: There was no correspondence.

5. Public Presentations: Captain Steve Graham gave the Operation’s report updating the committee on the status of Route 3 including traffic, major service issues and vessel and terminal

Southern Sunshine Coast Ferry Advisory Committee Page 2 of 5 Meeting Date: November 8, 2006

updates. (Attached). Overall traffic is increasing and on time performance is improving for the Langdale to Horseshoe Bay route.

There was a discussion of customer issues at Langdale Terminal: a. Boarding Passes

BC Ferries reported that extra boarding pass ticket dispenser machines are on order which may alleviate some of the problems with line-ups for boarding passes and customers taking multiple tickets. It was pointed out that the location of the machines may also be an issue.

b. Access to Washrooms Customers report that there is no foot passenger access to the washrooms at the Terminal first thing in the morning. The Terminal Manager will look into this issue.

c. Parking machine issues Ongoing issues are reported with the parking ticket dispensers at Langdale Terminal. The Terminal Manager is working with the ticket dispenser company and Langdale staff to resolves these issues.

d. Travel Assistance Program (TAP) and Assured Loading There was a discussion of TAP travel and assured loading for medical reasons. BC Ferries pointed out that TAP forms alone do not guarantee assured loading. TAP forms are for non-emergency medical procedures. If assured loading is required for urgent medical appointments a Doctor’s letter is also required.

FAC members pointed out that the process seems to be different between Langdale and Horseshoe Bay Terminal. Ian Downie confirmed that he and the new Acting Terminal Manager Chris Morris will be meeting with Langdale staff to discuss many of these issues and ensure that a standard process is in place. One of the committee members pointed out that under the BC Ferries livestock policy, livestock received better treatment than medical patients. BC Ferries noted that there is a new livestock policy in place which requires livestock owners to make a reservation in advance of traveling. Livestock no longer receive automatic assured loading.

Action: Betsy Terpsma to provide a copy of the revised livestock policy to all committee members.

Action: BC Ferries to clarify the process for assured loading for medical reasons with committee members.

FAC members raised a question around route pricing versus population growth. Ferry traffic growth is not keeping up with population growth on the Sunshine Coast. Is BC Ferries over priced? BC Ferries replied that there are a number of factors involved in traffic demand analysis outside of pricing. For instance the growth of services and businesses on the Sunshine Coast will be a factor in year round travel.

Southern Sunshine Coast Ferry Advisory Committee Page 3 of 5 Meeting Date: November 8, 2006

Action: Captain Graham to provide more detailed traffic statistics (overheight and underheight) for committee members.

FAC members raised a question around the allocation of costs to Route 3. Gary Leitch provided a handout on the fleet wide allocation of costs. A percentage of corporate overhead is allocated to the route based on annual traffic. It was pointed out that the current berth upgrades at Horseshoe Bay Terminal do not directly benefit Route 3, but Route 3 still has to bear a percentage of the costs. How will the new Super C’s costs be allocated to Route 3? Gary Leitch replied that these questions are best directed to Robe Clarke, Executive Vice President, Finance and CFO. Gary Leitch advised the committee members to express their concerns in writing.

6. Minutes of the Previous Meeting June 12, 2006– Review of Action Items:

a. Report to FAC on overnight bunkering at Langdale Captain Steve Graham reported that additional information is required on the fuel contract from the purchasing department. He will continue to pursue this item to see if improvements can be made. b. Status of Bike Racks Gary Leitch reported that a survey of all ships in the fleet is underway to see where it is possible to deploy bike racks. There are currently three prototype designs. These prototypes are being tested on the Spirit of Vancouver Island on the Tsawwassen to Swartz Bay route. BC Ferries is moving forward with the bike rack program but can not give an exact date for possible installation on the Queen of Surrey. c. Revised Terms of Reference FAC Chair Ed Steeves pointed out that there are several copies of the terms of reference in existence. The chair sent the Southern Sunshine Coast version to BC Ferries last May. In the meantime a new generic version was sent out. Action: Gary Leitch will find the terms of reference for the Southern Sunshine Coast sent in May and advise the committee of current status.

7. New Business:

a. Coast Card update - prepaid discount tickets (attached) Amar Johal presented an update on the development of the Coast Card platform and associated products. Why is BC Ferries doing this? BC Ferries can save on costs of printing and administration and there are additional applications for customers in the future. The concern from customers is that price increases could be added to the Coast Card. BC Ferries will be doing research to find the best product for BC Ferries and for our customers.

b. CRA Commuter Card (attached) Amar Johal reported on the Federal Government initiative to develop a program to allow tax credits for ‘monthly commuter passes’. BC Ferries will develop a product to meet federal requirements. In the future this product will likely be presented on the Coast Card platform but in the short term will be a paper based product. Committee members commented that there is no

Southern Sunshine Coast Ferry Advisory Committee Page 4 of 5 Meeting Date: November 8, 2006

information on the new federal tax credit for commuters on Route 3. Amar Johal noted that the monthly pass product is expected to be out to customers in January, 2007. BC Ferries does not know the price of the product yet. However it will be targeted to high volume commuters. Action: BC Ferries will keep the committee advised as more information becomes available from federal government and BC Ferries.

c. Second Performance Term (attached) Amar Johal advised the committee that BC Ferries filed its report on the costs of service in the second performance term with the BC Ferry Commission on September 30. He advised that BC Ferries would work with the FACs to assist them in determining what interventions they wished to make with respect to future service levels. Critical dates and roles of participants in the process on determining the service levels for the second performance term were outlined. There is a FAC Chairs meeting planned for November 17 in Victoria with Ministry of Transportation representatives and Ferry Commissioner Martin Crilly. The Islands Trust has already made an extensive submission to government. An additional submission from the chairs of the FAC will go forward; the basic position is that government should also pay for the infrastructure costs of terminals and vessels. Ferry fares must remain affordable. In addition the Southern Sunshine Coast FAC has sent a letter forward expressing their viewpoint. The committee asked if it would be possible to have the summer schedule on a year round basis. BC Ferries replied that this is not possible with the current fleet of ships. The Queen of Esquimalt is assigned to relieve for refits in the winter. Action: BC Ferries will meet with all FACs between now and March 31 to assist FACs to articulate their service requirements for the next performance term.

d. Northern Vessel Update (attached)

What is the percentage that the provincial government is paying for the new vessel? The provincial government is increasing the service fee for this route.

e. Library Request

The committee has been approached by the Gibson’s Library to see if they could do some promotions on the Queen of Surrey. Action: Captain Graham will consider the Gibson’s Library request and respond.

Southern Sunshine Coast Ferry Advisory Committee Page 5 of 5 Meeting Date: November 8, 2006

f. Langdale Terminal Upgrade (Master Planning) Update

Gary Leitch reported that the Master Planning process is on hold due to the planning for MV Sonia. A redesign of the Northern terminals and berths is required to accommodate the new vessel. The Master Planning process at Langdale Terminal is set to resume in January 2007.

g. TV in children’s Play area on vessel. The committee has heard requests to turn the TV off in the children’s play area on the Queen of Surrey. Senior Master Janice Lloyd responded that some customers do request the TV. The Chief Steward tries to balance the requests for the TV in the children’s play area. The comment was made that the consistent announcements from the bridge crew are very much appreciated on Route 3.

8. Next Meeting: At the call of the chair and/or BC Ferries.

9. Meeting adjourned: The meeting adjourned at 11:35 p.m. Approved:

Captain Steve Graham, Marine Superintendent Date: December 5, 2006 Ed Steeves, Chair Date: December 12, 2006

Attachments:

1. Operations Report

2. Coast Card

3. CRA Commuter Card

4. 2nd Performance Term

5. Terms of Reference

6. Northern Vessel Update

Operations Report

Southern Sunshine CoastFerry Advisory CommitteeNovember 8, 2006

Table of Contents

TrafficMajor Service IssuesVessel UpdateTerminal UpdateCorporate UpdateQuestions

Traffic

Vehicle Traffic – Month to Month Comparison

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

Octobe

rNov

embe

rDec

embe

rJa

nuary

Febru

aryMarc

hApri

lMayJu

ne July

Augus

tSep

tembe

r

04/05 Vehicles

05/06 Vehicles

06/07 Vehicles

Traffic

Passenger Traffic – Month to Month Comparison

050,000

100,000

150,000200,000250,000300,000

350,000400,000

Oct

ober

Nov

embe

r

Dec

embe

r

Janu

ary

Febr

uary

Mar

ch

Apr

il

May

June July

Aug

ust

Sep

tem

ber

04/05 Passengers

05/06 Passengers

06/07 Passengers

Traffic

Combined Traffic – Month to Month Comparison

Month04/05 Vehicles

05/06 Vehicles

06/07 Vehicles

04/05 Passengers

05/06 Passengers

06/07 Passengers

October 91,732 89,542 210,596 201,706

November 81,372 80,703 179,073 173,393

December 89,906 89,526 209,551 206,469

January 68,782 75,751 153,283 166,201

February 74,082 73,840 164,006 160,169

March 89,692 87,437 206,595 194,391

April 89,423 87,470 91,671 210,798 197,062 207,409

May 94,672 99,734 95,816 226,307 234,150 221,330

June 97,027 99,641 99,437 225,984 230,081 230,453

July 121,157 121,585 123,034 318,541 316,078 319,221

August 128,323 130,210 131,150 342,504 342,138 342,892

September 97,227 98,986 100,651 228,759 230,617 230,945

Major Service Issues

On Time Performance

CENTRAL COAST - Route 3

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar

% o

f Sai

lings

With

in 1

0 M

ins

ofSc

hedu

led

Saili

ng T

ime

05/06 Rt 3

06/07 Rt 3

Major Service Issues

Cancelled Sailings

Missed Round Trips

April 05 May 05 June 05 July 05 Aug 05 Sept 05 2 0 0 2 3 0

Oct 05 Nov 05 Dec 05 Jan 06 Feb 06 March 06

0 2 0 0 0 2

April 06 May 06 June 06 July 06 Aug 06 Sept 06 2 0 3 0 4 0

June – cancelled trips when Queen of Surrey returned to service

August – cancelled trips when Queen of Esquimalt assigned to Rte 2

Vessel Update

Queen of Surrey annual refit scheduled Feb 14 – Mar 15, 2007.

Queen of Coquitlam to be replacement vessel

Terminal Update

Langdale

New Acting Manager, Terminal Operations

Extra Boarding Pass Ticket Dispenser Machines on Order

Terminal Update

Horseshoe Bay

Berth closures September – June at Horseshoe Bay Terminal Berth one and two to be upgraded to prepare for the arrival of the New

Super C-class vessels late in 2007Approx $14 M investmentWork includes:

demolition of old marine structures modifying wing walls constructing new dolphins upgrading the foot passenger walkways building a new flow deflector wall adjacent to Sewell’s Marina upgrading the electrical sub-station feeding the berths with shore power

Corporate Update

Seven new vessels to be added to fleet:

• M.V. Sonia - Queen of the North Replacement • Three new Super C-class vessels – Rtes 2 and 1• New Build – Queen of Prince Rupert Replacement.• New Intermediate Vessel - 125 car ferry, Queen of Tsawwassen replacement• M.V. Kuper – 32 car ferry, for the gulf islands

MV Kuper at Allied Shipyards Friday, Nov. 3

Questions

Coast Card Platform

Products

AssuredLoadingTickets

PrepaidDiscountTickets

MonthlyPass

Product

Ferry$ TBD

• Coast Card is an intelligent service delivery platform (smart card based system)• Intelligence is not based in the card - back end systems have all of the intelligence• Provides an efficient delivery mechanism to put products into customers hands.

Prepaid Discount Tickets

Summary of Consultation

March – June 2006

BC Ferries meets with 11 Ferry Advisory Committees specific to Pre-Paid Discount Tickets

Committees provide feedback on features of proposed program

Committees suggest extensions of program to provide different products

Summary of Consultation

Issues raised during discussion

Potential introduction of expiry date on Prepaid Tickets (loss of unused trips)Non-transferability, particularly to cohabiting family membersPrivacy issuesGroup Travel

Proposed Features of Pre-paid Discount Tickets

Expiry date ??????Transferability – Coast Card Platform is designed to allow this feature.No community is forced to initially accept Plastic Pre-paid Discount TicketsCo-existence of plastic and paper media for a timeThreshold for plastic conversion??????Project is ‘piloted’ on a route with large number of commuters to test systems and uptake by users.Privacy protected as per current Privacy LegislationLoss protection IF registeredAuto re-loading feature

Proposed implementation Schedule & Process

Further IT development work required

Market research on Pre-paid Discount Ticket usage and features –6 months

Route specific pilot project

Remediate any issues identified

Roll out to other routes on a route by route basis as resources allow

Conclusion Prepaid Discount Tickets

Monthly Pass Product

Canada Revenue Announcement

Federal government announced a new transit tax credit as part of the May 2006 budget. Local ferry travel is included in the types of public transit that is covered under the credit. BC Ferries has been in discussions with the Department of Finance in Ottawa about how customers may benefit from this credit.BC Ferries is seeking more details from the federal government and will update customers and ferry advisory committees when more information is available.

Canada Revenue – some details

The new transit tax credit will apply to the cost of public transit passes effective July 1, 2006.The types of public transit that will be covered by the credit include travel by bus, streetcar, subway, commuter train, commuter bus and local ferry.Individuals making claims will be required to retain their receipts or monthly passes for tax verification purposes. As BC Ferries offers pre-paid discount tickets, not monthly passes, we are in discussions with CRA on how our customers can qualify for the credit.The federal budget proposed to allow individuals to claim a non-refundable tax credit of 15.25 percent for 2006 and 15.5 percent for subsequent years.

Monthly Pass

BC Ferries is currently developing a monthly pass productAdditional legislative clarification from CRA requiredExpect pricing and features will be different than Prepaid TicketsTargeted to frequent high volume commuters

2nd Performance Term:Roles, Process, Schedule

Second Performance Term

The changes to the Second Performance Term are defined in the Coastal Ferry Act (CFA) and the Coastal Ferry Services Contract (CFSC)− As per the CFA, the British Columbia Ferries Commissioner

(BC Ferry Commissioner) must determine the Price Cap (the amount that BC Ferries can charge for tariffs) for each route group

− As per the CFSC, the Province must make a determination of the following:

Establishment of core service levels to be provided on each routeEstablishment of Provincial service fees for each route

− The next performance term (a 4 year period) begins April 1, 2008 and ends March 31, 2012

Roles

Commissioner Province BC Ferries FAC

Sets price capSets Service Levels Sets Service Fees

By Sept 30, submits information to the Commissioner that will assist the Commissioner in establishing price caps for each route group

Advocate your community's views to your MLA, the Province and the BC Ferries Commissioner

PRICE CAP

The price cap is a ceiling on the average tariffs that BC Ferries can charge for a route groupCommissioner must set the price cap at a level that ensures BC Ferries earns a return to remain financially viable and is able to make necessary capital investmentsThe price cap will be higher or lower depending on what the provincial government decides are appropriate:− service levels; and− service fees

Roles

Price Cap

Service Levels Service Fees

Set by Commissioner

Set by Province

Key Dates and Roles of Participants

Sept 30 2006 BC Ferries files a price cap submission with the BC Ferry CommissionerApril 1 2007 BC Ferry Commissioner publishes preliminary report to the BC Government and BC Ferries indicating the price cap assuming current service fees and service levelsBC Government determines changes to service fees and/or service levels, if any June 30 2007 BC Ferries provides report to the BC Ferry Commissioner indicating changes to either core service levels and service fees, if anySept 30 2007 BC Ferry Commissioner issues final price cap for Performance Term 2

BC Ferries’ Role

BC Ferries provide price cap submission to the BC Ferry Commissioner – September 30− Estimate assumes the cost of delivering the same core

service levels and service fees for the years 2008-2012

BC Ferries to hold FAC meetings to explain the process and the schedule

BC Ferries provides information to assist communities and FACs develop their positions for discussion with the provincial government and the commissioner

The FACs’ role

Decide what is desirable from your perspective

Discuss this with your community

Meet with the BC Ferry Commissioner to discuss process

Reach consensus if possible

Articulate your views to your MLA and the Provincial Government

Share your views with the BC Ferry Commissioner

Process

BC Ferries briefs FACs – fall 2006

BC Ferries meets with FACs to provide information to assist FACs and others to understand the possible implications of any service changes the FACs may desire

FACs articulate their views to the government & to the BC Ferry Commissioner

Provincial Government Contacts

Mr. John Dyble, Deputy Minister of Transportationjohn.dyble@gov.bc.ca 250 387-3280Ministry of Transportation970 Blanshard St, Victoria V8W 3E6Liz Kenny – Executive Coordinator

Ms. Kathie Miller, Assistant Deputy Minister of Transportationkathie.miller@gov.bc.ca 250 387-5062

Ms. Nancy Merston, Director, Marine Branch,Ministry of Transportationnancy.merston@gov.bc.ca 250 356-0297

Questions?????

Ferry Advisory Committee Terms of Reference

Draft terms of reference

Attempt to create a simple generic terms of referenceBC Ferries recognizes the unique nature of each areaTherefore expect feedback on how these may need to be modified to suit your situationPlease advise gary.leitch@bcferries.com by Nov 30 for desired modifications

Northern Vessel - Information

In August BCF announces that a contract has been awarded to construct a new vessel to replace the Queen of Prince Rupert. This ship is expected to enter service in the spring of 2009.

On September 18th BCF announces the purchase of the replacement vessel for the Queen of the North – MV Sonia

− Vessel is 2 years old and currently in Spain

− Cost for the MV Sonia $50,600,000

− Will be in service for the busy 2007 summer season

Northern Vessel - Information

Vessel will undergo $9,000,000 in extensive modifications at the Victoria Shipyards starting mid December to improve customer amenities and meet safety requirements to operate in Canadian waters.

Ship modification work to be undertaken includes:•Mechanical work on main engines and auxiliary systems•Change to Canadian registry•Modification to stern ramp to become compatible with BC Ferries’docks•New lifejackets, fire hoses and monitoring cameras•Car deck upgrades to accommodate higher loading capacity •Expansion and reconfiguration of galley and food service area•New seating•Expansion of washrooms•Relocation and expansion of giftshop

Northern Vessel - Information

MV SONIA VESSEL SPECIFICATIONS:MV Sonia

Year Build 2004Gross Tonnage 9,925Length Overall 117 metresBreadth 20 metresDepth 7.2 metresMaximum Draft 4.7 metresEngine Output 16,000 kW at 750 rpm# of Passengers 600+# of Vehicles 101# of Cabins 70Speed 20.3 knotsDamage Stability Two compartment

Northern Vessel - Information

Northern Vessel - Information

Northern Vessel - Information

Northern Vessel - Summary

Queen of Prince Rupert -refit 2007

Queen of Chilliwack -

MV Sonia – April 2007

New Build – 2009