TheBoat will cease operations at the end of June, bringing to a close the city's 20-month demonstration project for a Kalaeloa-Honolulu passenger ferry service.

Mayor Mufi Hannemann cited fiscal constraints for his decision to halt the service, but said he is not ruling out a return of TheBoat.

The city is facing a $50 million revenue shortfall and several City Council members have proposed eliminating TheBoat and diverting the nearly $5 million used annually to subsidize the project to other programs.

"I am a staunch supporter of multimodal transportation, which includes the bus, this ferry, and rail transit that breaks ground later this year," Hannemann said in a press release. "However, given our fiscal condition, we needed to take a critical look at all expenditures."

Money saved from the operations could be used to help pay for a homeowners' tax credit in 2010, as well as offering additional bus service to those now riding TheBoat, the mayor said.

The operation has been plagued by low ridership, forcing the city to heavily subsidize it.

City officials estimate about 270 people ride it daily, running at about 30 percent of capacity.

A recent city study showed that while passengers pay only $4 for a roundtrip ticket, the cost to the city is about $124 per rider per round trip. That means the city is paying about $30,000 a year for one commuter to make the daily trip on TheBoat.

The city received a one-time $5 million federal grant to help operate TheBoat the first year, but the city picked up the cost of the subsidy when it decided to continue the service.

Both supporters and opponents agreed that ridership would have been higher if the city had been allowed to use the harbor at Iroquois Point in 'Ewa Beach as a terminus. But the Navy would not give clearance for it as it had for a previous commuter shuttle pilot project several years earlier.

"It (Kalaeloa harbor) is just in the wrong place," said Councilman Gary Okino, who heads the Council Transportation and Planning Committee. "But the best place isn't available."

Hannemann said he would restore TheBoat service if a terminal could open up in 'Ewa. Not only would an 'Ewa terminal have opened TheBoat to a larger ridership, administration officials said, but an 'Ewa-to-Honolulu boat ride would have been only 30 minutes, half the time of a Kalaeloa-to-Honolulu route.

Longtime Makakilo resident Michele Golojuch had been a regular rider until a change in her daily routine required her to take her car.

Golojuch said riding TheBoat had been less stressful than riding TheBus and offered opportunities for people to chat, work on a laptop computer and nap.

"It was a really nice alternative," she said.