Governor Jay Inslee has appointed Lynn Peterson as the new secretary of Washington's Department of Transportation. Peterson replaces Paula Hammond, who announced her retirement Tuesday.

Peterson, a highway engineer, currently serves as the Sustainable Communities and Transportation Advisor to Oregon Governor John Kitzhaber.

Peterson helped manage several of Oregon's statewide transportation initiatives including the Willamette Valley Passenger Rail Plan, Kitzhaber's 10-year Energy Action Plan including Oregon's portion of the Electric Highway from B.C. to Baja and acceleration of commercial fleet turnover to alternative fuels.

Hammond is retiring after nearly six years as head of the department. She announced her retirement in a letter sent to employees Tuesday morning, saying she would be leaving early March.

My time at WSDOT has come to an end, Hammond said in her statement. I'll be retiring from the agency on March 8th. I leave with pride in knowing that we are regarded as one of the best and most progressive transportation agencies in the country.

Hammond has been the subject of numerous reports by the KING 5 Investigators outlining a history of wasteful practices by the state ferry system. Hammond had her supporters too, who called her a master politician who knew how to get things done.

On Tuesday, Inslee said it's time for the troubled department to go in a new direction.

We need an innovative approach to fixing a transportation network that is outdated and hampering our economic growth, Inslee said in a news release. Lynn has the experience, creativity and leadership skills to help Washington build a transportation system for the 21st century. And we'll do that in a way that more efficiently moves people and goods and reduces carbon emissions.

Peterson will have to hit the ground running when she takes over. She inherits a 2-year $8 billion transportation budget and a lot of issues like I-90 toll to pay for a new 520 bridge that's way over budget, and a ferry system on the brink of bankruptcy.

Environmentalists are also praising Inslee's choice. They see Peterson as someone who is committed to creating walkable, bikeable communities and transit, someone with a history of supporting rail over road expansion.

Tuesday's news comes as the Legislature tries to put together a transportation package for the November ballot and House Democrats introduce a 10-cent transportation tax.

Inslee also named several other new cabinet choices. He appointed bank executive Carol Kobuke Nelson to lead the Department of Revenue. Scott Jarvis was reappointed as Director of the Department of Financial Institutions where he has served since 2005. Inslee also appointed Nicholas Brown to be his new General Counsel.

KING 5's Liza Javier and Meg Coyle contributed to this report.

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Video: Lynn Peterson at Newberg EV Charging Station Celebration

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