After years of planning, design revisions, and federal paperwork, Whatcom County has finalized a $25 million grant agreement with the U.S. Department of Transportation that puts the replacement of the aging Lummi Island ferry on a firm path toward construction. The agreement, signed with the Maritime Administration under USDOT's RAISE grant program, obligates federal funds and allows the county to begin incurring project costs eligible for reimbursement.

The funding covers roughly half the estimated cost of the Lummi Island Ferry Replacement and System Modernization Project, which will replace the 64-year-old Whatcom Chief and rebuild aging ferry terminals on both the island and mainland sides of Hale Passage. The Whatcom Chief has been in service since the early 1960s and has faced mounting maintenance challenges, with increasing outages in recent years as parts age and inspections turn up new issues.

Where the Money Comes From

The $25 million federal grant was originally awarded in August 2022 through the USDOT RAISE program, a competitive infrastructure grant program that funds transportation projects of regional and national significance. The county continued design and planning work through 2023, 2024, and 2025, including a significant revision to the project scope that USDOT approved in August 2025 before the grant agreement could be finalized.

In addition to the federal funds, the county has received $5.3 million in Move Ahead Washington state transportation funding to support vessel and terminal design work and environmental permitting under the National Environmental Policy Act. In July 2026, the Whatcom County Council established the Whatcom County Ferry District, a new local agency dedicated to providing a stable revenue source for the capital project and for ongoing ferry operations.

The ferry district will collect a property tax levy of 8.7 cents per $1,000 of assessed value. For the owner of a $600,000 home in Whatcom County, that works out to roughly $52 per year. County voters approved creation of the ferry district in May 2026.

Construction Timeline

With the federal grant agreement in place, the county is moving into the next phase of work. Whatcom County Public Works expects to advertise the terminal construction package for bids in November 2026. The new ferry construction package will be advertised in January 2027. Shipbuilding is expected to begin in the first quarter of 2027, with the new vessel anticipated to be fully operational by March 2029. Terminal construction is expected to begin in June 2027 and take approximately two years.

Public Works Director Elizabeth Kosa called the finalized agreement a major milestone. "With the federal funding now obligated, we can move into the next phase of work and toward rebuilding aging terminals and construction of a replacement vessel for the Whatcom Chief," Kosa said in a statement released Thursday, September 17.

County Executive Satpal Sidhu thanked U.S. Representative Rick Larsen as well as Senators Patty Murray and Maria Cantwell for their support for the project. "This new ferry is a critical piece of our marine highway infrastructure, and we look forward to it serving our community for generations to come," Sidhu said.

Representative Larsen, the top Democrat on the House Transportation and Infrastructure Committee, said the agreement "paves the way for cleaner, greener, and more reliable transportation to and from Lummi Island."

What the New Ferry Will Look Like

The replacement vessel is designed with several improvements over the Whatcom Chief. According to county documents, the new ferry will improve safety and operational reliability, reduce maintenance downtime, and deliver a better passenger experience. It is also designed with flexibility for future conversion to electric power, in line with Washington State's broader clean transportation goals.

The current Whatcom Chief is one of the smallest vehicle ferries in the Washington State system, operating on the short but vital crossing of Hale Passage between the Lummi Island terminal and the mainland dock on Gooseberry Point Road. The island has roughly 900 year-round residents who depend on the ferry for access to groceries, medical care, schools, and employment on the mainland.

The ferry has been out of service for its annual dry dock maintenance since September 12 and is expected to return by October 4. During that period, foot passenger service is provided by alternative arrangements, and vehicle crossings are suspended. The dry dock period has been a recurring reminder to island residents of how dependent their community is on a functioning vessel.

What Comes Next

The November bid advertisement for terminal construction and the January shipbuilding bid represent the next two public milestones in the project. Residents interested in following the project can track updates through the Whatcom County Public Works department, which has published regular updates on the ferry replacement and system modernization project. The Whatcom County Ferry District, once fully operational, will hold its own public meetings and budget processes, giving island residents and county taxpayers a direct avenue for input on ferry operations and capital spending. For background on how Whatcom County has been managing the transition period with the aging Whatcom Chief, earlier coverage of the Port of Bellingham's infrastructure investments offers useful context on the county's broader waterfront and maritime priorities.