Vineyard SSA Governor Loses Battle to Impose $7 Million Fee on Nantucket

Gazette Senior Writer

Vineyard Steamship Authority governor J.B. Riggs Parker lost a skirmish yesterday in his battle against Nantucket when the Falmouth and Nantucket boat line governors voted to eliminate a complicated cost allocation policy that could have led to ruinous fare increases for Nantucket in coming years.

"It's time to put this behind us, develop a new policy and go forward," declared Falmouth boat line governor Galen M. Robbins.

"I am opposed to giving up the past. I will vote against giving up the past," declared Mr. Parker.

"You are pitting the two Islands against each other which is a very, very bad thing," Nantucket governor Grace S. Grossman told Mr. Parker.

The vote was 2-1 in favor of adopting a modified policy to replace a policy adopted by the boat line board three years ago. Under the old policy the board had agreed to "recapture" some $7 million in revenues for the Vineyard from a period when the revenues from the Nantucket route did not cover the cost of service. The revenue recapture was supposed to take place whenever there is a rate increase.

The policy has become an ongoing bone of contention between Nantucket and the Vineyard, with Mr. Parker rigidly backing the old policy, even though the boat line's longtime treasurer, Wayne Lamson, has recommended repeatedly that the policy be changed.

At the monthly meeting at the Agricultural Hall in West Tisbury yesterday morning, Mr. Lamson again urged the board to modify the policy.

"This cost allocation is really not an exact science, and we need to have some flexibility," said Mr. Lamson, who is also now the acting general manager at the SSA.

The cost allocation policy came up during a discussion about a draft $60 million operating budget and corresponding $3.1 million rate increase for the coming year.

The budget and the rate increase will be voted on in October.

Mr. Lamson asked the board for some direction on the cost allocation policy, noting that it will affect the final operating budget and rate increase request.

"If we were to go back and recapture that [$7 million], would that create a significant harm in Nantucket's ability to pay?" Mr. Robbins asked. Mr. Lamson said it could. "I think what Wayne has outlined is the policy that the authority should live with," Mr. Robbins said.

It was the first meeting for Mr. Robbins, who proved to be both a quick study in boat line affairs and a moderating influence in the brittle relations between the Nantucket and Vineyard board members.

The new cost allocation policy will eliminate any revenue recapture unless the difference between the cost of service and revenues is more than two per cent on each route.

Mr. Lamson said the vote yesterday will result in some change to the proposed rate increase for the coming year.

"This was kind of a compromise - it doesn't eliminate the catch-up altogether, it just means that Nantucket has to make sure going forward that the revenues are meeting the cost of service," Mr. Lamson said.

In other business, boat line governors also voted to put out a request for proposals for private contractors who want to bid on freight service between New Bedford and the Vineyard next year.

A pilot freight program is nearing the end of its second year; the service is provided by a Florida-based shipping company named Seabulk International Inc., formerly Hvide Marine. The SSA paid $1.6 million to Seabulk to operate the service this year. Last month SSA management had recommended that the boat line operate the freight service itself in the coming year, using a spare freight vessel.

Now management has taken a slightly different tack, recommending that the boat line put out an RFP for private carriers before it makes a final decision about the freight service. The RFP recommendation was triggered after the owner of the Seabulk made a verbal offer to run the freight service next year at no cost to the authority.

At the outset of the meeting yesterday, Chilmark selectman Warren Doty recommended that the boat line run the service itself and not issue an RFP.

But the boat line board had another view.

"I think we have to go out with an RFP; as management has pointed out, it is possible that it would be less expensive for us and I think we need to look at it," said Mrs. Grossman.

"I think it is healthy to go out for an RFP - then we can look at both options side by side and make an educated decision. I think we need a little more information and the RFP will get us that," said Mr. Robbins.

"Is there a down side that you see?" Barnstable member Robert O'Brien asked Mr. Lamson.

"No. I think it gives us time to come back at the next meeting - which is just three weeks away - with all the information," Mr. Lamson replied. "There are other issues besides financial, but we are recommending that we do go forward with the RFP," he added.

After the RFP was approved Mr. Parker issued a heartfelt speech about the value of establishing ferry service from New Bedford.

"I believe very strongly that the authority needs New Bedford. I think we have to accept that and I think that's very important. We can't meet our obligations without New Bedford," he said. He continued: "We're going to have to deal with it, we're going to have to face facts and my suggestion is that we get real and deal with it. At the moment we are trying to grapple with a very delicate negotiation in New Bedford [with Ralph Packer], and if it fails, Vineyard Haven will see 8,000 more trucks and I think that is intolerable and we have to do what we have to do to avoid it.

"New Bedford doesn't need us, we need New Bedford and that is where we should go."

Mrs. Grossman replied: "I think that the economy is going to dictate what is going to happen on the Islands in the future - I think we have to assess the situation as we see it and we have to be very careful what we plan and what we do and I'm for being a little bit more conservative than Mr. Parker. We have to be careful before we commit to a third port."

Mr. Parker replied: "Even if we have a total collapse in the economy, I believe in America, it will come back and I don't think we can look forward and plan with the idea that people aren't going to reproduce and come to the Islands, because they are reproducing right now and they will come."

Mr. Robbins called for a more dispassionate approach. "I see that we are in a situation of fear and reprisal with all of this and that troubles me. Instead of discussing delicate negotiations and what they might bring, I think we should be discussing things like how we can get a handle on the fact that people are going to be migrating from Woods Hole to New Bedford [in a passenger ferry service]. Do we know that we are going to pull people off and go to New Bedford? My sense is no, and I do think there is going to be an incremental increase and we are going to be carrying more people - and that is going to have an impact."

At the end of the meeting Daniel Flynn, a Dukes County commissioner, attacked Mr. Robbins for his vote on the cost allocation policy.

"I can't tell you how disappointed I am in this meeting - the Steamship Authority board of governors has got to get up to a higher level than what I saw today," Mr. Flynn said. Telling Mr. Robbins that he was "not up to speed" on boat line issues, Mr. Flynn said: "Your action today is very parochial and it is causing me to rethink how I feel about our commitments to the town of Falmouth."

Mr. Robbins answered Mr. Flynn in blunt but respectful tones. "We have a treasurer who has worked for this authority for 30 years and for you to sit there and tell me I am not up to speed - well, I disagree. I voted on this policy because it was based on a recommendation from a person who is a trusted and respected member of this organization - and I happen to agree with it," Mr. Robbins said.

"We are one authority, and this warring between Nantucket, the Vineyard, Falmouth and Barnstable - that is what I cannot tolerate," Mr. Robbins said.

Roger Wey, an Oak Bluffs selectman and also a county commissioner, applauded Mr. Robbins.

"I disagree with my colleague [Mr. Flynn] - today we acted like one authority and we have to keep on acting this way. We need to work as a team," Mr. Wey said.