Summary of Recommendations by Priority

January 2, 2018

Tier 1: Urgent Attention Required

The KT Board needs to decide if the KT ferry service will be operated Reference Tab 2 of
and maintained internally at KT or through KCMD, as stated in the POF the Final Report.
Business Plan. My recommendation is that KCMD should operate the KT Vessel Operations
ferry service for a three (3) year period. KCDM already has the staff and and Maintenance
infrastructure required. For KT to operate and maintain the ferry
service, they will need to develop a full in-house organization to
professionally operate the service internally in preparation for arrival of
the Finest and beyond.

KT needs to work with KCMD to negotiate and finalize a charter Reference Tab 3 of
agreement for the SOK for its service as a back-up vessel to the RP I. the Final Report.
Movement on this process has been glacial and it needs an advocate M/V Spirit of
who recognizes the need to finalize an agreement in an expeditious Kingston (SOK)
manner.

Scrap the existing reservation system and select a consultant to identify Reference Tab 11 of
KT’s specific requirements and research potential systems domestically the Final Report.
and internationally that can meet those requirements. Reservation System

Passengers can currently book a reservation without payment and Reference Tab 11 of
penalty if they no-show, which is a financial impact to KT and results in a the Final Report.
loss of goodwill amongst customers. To prevent these losses, KT needs Reservation System
to determine if there should be a reservation fee that can be credited
toward a specific reservation if the customer travels and forfeiture if
they no-show.

To gain additional feedback from passengers, establish several mid-day Reference Tab 11 of
or late afternoon open houses for commuters who cannot meet prior to the Final Report.
the ferry’s morning and/afternoon sailings to discuss their issues and Reservation System
recommendations regarding the current reservation system.

Summary of Recommendations by Priority January 2, 2018

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 As KT’s number one (1) priority is to ensure service reliability, I believe Reference Tab 4 of
that the Caterpillar C-18 engines would be the most reliable to the Final Report.
incorporate into the Rich Passage build program. Rich Passage Build
Program

Establish a project board (e.g., white board) to be used by all applicable Reference Tab 13 of
departments identifying key tasks required to be ready for the the Final Report.
inauguration of the Kingston service, preparing the Finest for back-up Communications
service, big vessel build program, etc. and Relationships

Electronic and interior work is needed on the Finest. The KT Marine Reference Tab 5 of
Director needs to give direction to Purchasing to determine the the Final Report.
appropriate replacement electronic equipment that is required, as well M/V Finest
as the lead time needed for delivery and installation. A decision needs
to be made regarding retaining the existing seats or having new seats
made and identifying the seat manufacturer and lead time required for
installation.

Note: This recommendation may already be underway. Reference Tab 6 of

Commence discussions with naval architects and shipyards for two (2) the Final Report.
two hundred fifty (250) single deck, catamarans. A single deck vessel New Large Vessel
does not require the same crewing level. Although the vast majority of Builds
the world’s passenger-only catamaran ferries have two (2) decks, I
would plan on a single deck unless the USCG agrees to adjust the COI
from five (5) to four (4) crew.

Tier 2: Necessary Action Items; Implement as Soon as is Reasonably Possible

The KT Marine Director needs to establish a timeline for delivery of the Reference Tab 5 of
Finest from New York to Florida, and then from Florida to Victoria, the Final Report.
British Columbia, on a heavy lift ship. M/V Finest

KT currently has no dock space available for the Finest at Kingston. Reference Tab 7 of
Approval for docking in Kingston needs to be in place prior to arrival of the Final Report.
the Finest and the summer inauguration of new service between Dock Utilization
Kingston and Seattle. KT needs to undertake negotiations with WSF for
docking at Kingston docking facilities, and begin the approval process
for the Southworth dock.

KT has docking in Seattle to accommodate the current vessel arrivals Reference Tab 7 of
and departures. However, when KT adds service arriving into Seattle the Final Report.
from Southworth, Kingston and Bremerton, they will need additional Dock Utilization
docking on the Seattle side. As there are no docking options available

Summary of Recommendations by Priority January 2, 2018

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 right now in Seattle, the KT Executive Director needs to ensure that KT is
a part of any planning that involves docking in Seattle. This report delves
into the current status of docking on the Seattle side.

Organize a pre-drydock task force consisting of the KT Marine Director, Reference Tab 5 of
an engine representative, shipyard and members of the KT maintenance the Final Report.
team to prepare for the change-out of the two (2) MTU 16V 396 TE74L M/V Finest
engines. I made a direct recommendation to the KT Marine Director to
contact the Victoria Clipper Engineering department to discuss issues or
experience with their 396 engine change-outs.

I am in agreement with the consensus of industry professionals that are Reference Tab 4 of
familiar with Rich Passage that the RP I design is the appropriate model the Final Report.
for the RP II and RP III. The issues that caused the earlier vessel Rich Passage Build
cancellations appears to have been corrected. The new exhaust system Program
design will ensure reliability.

KT adopt a performance matrix as a standard by which to measure key Reference Tab 12 of

performance areas of the ferry division. I recommend KT work with KC the Final Report.
in comparing their data, using KC as a baseline. Organizational
Review

Tier 3: Important, but Not an Immediate Priority

Retain a consultant for the immediate development and Reference Tab 9 of

implementation of a Safety Management System (SMS) and Alternate the Final Report.
Security Plan (ASP). An SMS is established to provide safe practices in Safety
vessel operations and a safe working environment and would effectively Management
reinforce KT’s commitment to safety, in addition to further assist KT in System (SMS) and
their quest to score points with the USCG when making a case Alternate Security
for reducing the crew requirement for the Finest and the Plan (ASP)
Southworth/Kingston class vessels.

KT should establish a comprehensive training program for all staff with Reference Tab 10 of
prioritization on vessel crew to ensure the safety of passengers and the Final Report.
employees. The USCG provides minimum requirements. It would On-Board Training
behoove KT to strive for a higher standard than the minimum to protect Program
them from liability and potential negative press.

Establish a management working group representing all departmental Reference Tab 12 of

divisions, as well as a professional facilitator to guide discussions in the Final Report.
reviewing the organizational chart, with emphasis on function and span Organizational
Review

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 of control in order to support safe, successful fast ferry service, as well
as the upcoming expansion of service.

The KT Marine Director, Sanjay Bhatt, and one representative each from Reference Tab 13 of
on-board crew and the ambassadors be tasked with simplifying and the Final Report.
streamlining the current communication system, as identified in the Communications
Revised Protocol for Three Stages of Incident Communications and Relationships
(Communication Protocol). There are currently too many people and
steps involved in the current Communication Protocol, and there are
critical pieces missing.

The KT Board should incorporate annual fare increases tied to the Reference Tab 8 of
published rate such as the CPI or unit annual operating cost growth the Final Report.
rates. It is common practice in the Puget Sound region to apply annual Passenger Fares
or biennial fare increases commensurate with cost escalation rates.
Both WSF and the KC Water Taxi raise their fares at regular intervals.
Ferry riders in the Puget Sound are conditioned to modest annual fare
increases.

Request that the USCG approve an adjustment to the COI for the Finest Reference Tab 5 of
to reduce the crew by one position. This is a significant cost reduction. the Final Report.
M/V Finest

Tier 4: No Longer Relevant; Has Been Addressed

The KT Marine Director has failed to demonstrate his ability to work Reference Tab 13 of
with marine industry businesses and regulatory and cross-functional the Final Report.
agencies in order to successfully operate a marine division. He does not Communications
appear to have the knowledge or skill set to perform effectively as a and Relationships
marine operations leader or manager. In fact, he has alienated many
people within the industry and within the organization. The KT Board
needs to decide how to proceed in resolving this issue, as this is a
critical time and qualified leadership is required for the success of the
existing ferry operation, as well as with the new vessel builds and the
arrival of the Finest.

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