Kitsap Transit on-again, off-again plans to roll out Sunday bus service in Port Orchard, Silverdale and Poulsbo is back on again, set for June 16.

When Phase 2 starts, Route 8–Bethel will operate in South Kitsap every half-hour from 8 a.m. to 4:25 p.m. and Route 332–Poulsbo/Myhre will operate between Poulsbo and Silverdale every hour from 8:30 a.m. to 4:25 p.m, a KT news release states. On-demand service will operate in those areas from 8 a.m. to 4 p.m.

Phase 2 was scheduled to start March 10, but was paused to give the agency time to evaluate the potential financial impact of Initiative 2117, a November ballot initiative. If passed, I-2117 would repeal the state’s 2021 Climate Commitment Act, which the legislature estimated would provide $5.4 billion over 16 years to transit and other transportation programs.

At its work session March 19, KT commissioners agreed with executive director John Clauson’s recommendation to move ahead with the expansion after reviewing the financial outlook for the agency’s transit and ferry funds. Subsequent to the board’s Feb. 20 work session, at which I-2117 was discussed, Clauson informed the board he was pausing the expansion until the agency could assess the initiative’s potential impact.

In the 2023-25 biennium, KT received $5.276 million on an annual basis in CCA funds for transit operations and additional funds to support its paratransit (ACCESS) services. In addition, KT has used CCA funds to develop inductive charging capability at its transit bases and accelerate work on an all-electric ferry to operate its local foot routes in Sinclair Inlet, per the release.

At the work session, Clauson indicated that I-2117, if passed, could result in KT potentially losing $30 million in CCA funds through 2029 — $21 million on the transit side, $9 million on the ferry side. However, the blow to the agency’s financial condition wouldn’t force hard decisions until 2028, when unrestricted reserves in the transit and ferry funds could fall below the agency’s minimum-reserve policy. The minimum reserves are designed to cushion KT’s bus and ferry operations in the event of higher-than-expected expenses or lower-than-expected sales tax revenue.

Despite the potential loss of CCA funds, KT can move forward on Sunday service, Clauson said. However, the potential loss of the funds would hinder the agency’s ability to expand service and force it to prioritize capital projects, he said. “We have time to look at and very carefully, strategically, figure out what is our path forward,” Clauson told the board.

Finance director Paul Shinners estimated the annual direct cost of Sunday bus service was $1.4 million — $351,000 for Phase 1 (Bremerton), $702,000 for Phase 2 (Port Orchard, Silverdale and Poulsbo) and $351,000 for Phase 3 (Bainbridge Island). Sunday service was launched in Bremerton last September.

Clauson indicated the board had several options to offset the loss in the transit funds: Deferring capital projects that haven’t started, tapping restricted reserves, or assuming growth in sales tax to be better than 3.5% annually, the release states. Sales tax revenue accounts for the bulk of KT’s operating revenue. Similarly, in the ferry fund, the board could assume higher growth in sales tax revenue, defer certain capital projects or raise fares.

At the work session, the board endorsed Clauson’s proposal of raising fares on KT’s Fast Ferry services. The regular fare is $10 on sailings headed to Kitsap and $2 on sailings to Seattle, or a total of $12. The reduced fare is half of those amounts. Under the proposal discussed, the total cost would go up to $14 for regular fare, effective Oct. 1, and to $15 starting Oct. 1, 2025. KT will put together a more detailed proposal for the public to comment on and for the board to consider before it votes to adopt changes to KT’s fare policy later this year, Clauson said.