SSA Problems and Rate Hikes
By JULIA WELLS
Steamship Authority governors will be asked this morning to consider a mid-season fare hike, as the boat line faces escalating costs from legal bills, rising debt and projected operating losses on the new ferry run between New Bedford and the Vineyard this summer.
The proposed fare hike is set for discussion only; no vote is planned until next month. If it is approved, passenger fares and the popular auto excursion fares for Island residents will all go up.
Passenger fare increases would affect adults, children, senior citizens, commuters and school groups. No fare increase is proposed for summer automobiles or freight. The last time passenger fares went up was in 1997.
Mid-season fare increases are unusual for the boat line.
The discussion about fare hikes is set to take place at the monthly meeting of the SSA board of governors in Falmouth this morning.
In a memorandum to the SSA board this week, boat line treasurer Wayne Lamson outlined the details: Stiff legal bills, cash payments due on an $850,000 court settlement award to a Hyannis marine company, added debt associated with the purchase of property in Fairhaven for a new maintenance facility, and also for the purchase of the New Bedford passenger ferry Schamonchi.
The Schamonchi is expected to lose money this summer, adding new numbers to the expense side of the SSA ledger. An analysis prepared by Mr. Lamson before the purchase of the Schamonchi projected that the ferry would lose between $600,000 and $900,000 in its first year of operation. That estimate has been revised slightly, and under a best-case scenario, Mr. Lamson now projects that the Schamonchi will lose $500,000 this summer. But in his memorandum, Mr. Lamson warned that the operating loss on the Schamonchi operation could be much higher, if the SSA comes out on the short side of arbitration talks with four unions. The unions have filed grievances over proposed manning levels on the Schamonchi.
The Schamonchi purchase was the first key move by the boat line under the leadership of Vineyard governor J.B. Riggs Parker, who replaced outgoing governor Ronald Rappaport late last year. Mr. Parker took over as chairman of the board on Jan. 1.
In early January a special meeting was called to announce the sudden purchase of the Schamonchi from owner Janet Thompson. The surprise move angered the owners of Hy-Line Cruises in Hyannis, who were in the final stages of negotiations with Mrs. Thompson to buy the ferry.
The SSA paid $1.4 million for the ferry; the purchase was hailed by Mr. Parker as a sound business decision.
If it is approved, the boat line fare increase will take effect June 1.
Excursion fares would go up $2, from $35 to $37 in the winter, and from $63 to $65 in the summer on the Vineyard run. Passenger fares would go up 50 cents for adults and 25 cents for children. Senior citizen and student group fares would go up 25 cents. The cost of commuter ticket books would also go up.
Based on last year's traffic levels, the fare increase would generate an additional $877,000 in revenues for the boat line for the remainder of the year.
The boat line fiscal year runs from Jan. 1 through Dec. 31. The operating budget is approved in early October.
Mr. Parker had no comment on the proposed fare increase this week. "I am studying it and I'll be prepared to comment as soon as I've finished reviewing it," he said.
The request for an increase in fares comes as the SSA winds up a series of public discussions about an ambitious new service model that would require the boat line to borrow millions of dollars by issuing new bonds.
The service model has been pitched as a plan to save money, but residents on both Islands have begun to ask hard questions about a long list of ambiguous assumptions in the model, including the wisdom of taking on so much new debt. On Nantucket this week hundreds of residents turned out for a public hearing to protest the new service model.
In his memorandum Mr. Lamson noted that under ordinary circumstances the Steamship Authority would offset unexpected expenses with summer revenues. But these are not ordinary times - all traffic is down on boat line ferries for the first quarter, Mr. Lamson said. Year-to-date traffic statistics for the SSA show that passenger traffic is down 5.6 per cent, car traffic is down 7.3 per cent and freight traffic is down 4.6 per cent.
"Unfortunately, we can't wait until summer to see if our ridership figures improve compared to last year," Mr. Lamson wrote.