Boatline Reports Profit Drop in 2005
By JAMES KINSELLA
The Steamship Authority continued to make money last year, though not as much as boat line managers anticipated.
Unaudited numbers show that the SSA, beset by rising fuel costs and falling passenger traffic, brought in $1,491,957 in operating income in 2005 - a decrease of about $1.3 million from the prior year, and about $2.6 million below budget projections.
SSA treasurer Robert Davis reviewed the past year's unaudited financials at the boat line meeting Tuesday in Woods Hole. Mr. Davis said the accounting firm Deloitte & Touche is reviewing the numbers and is likely to complete the audit in about a month.
At the same meeting, the SSA board of governors heard some positive operating figures for a change when general manager Wayne Lamson reviewed the numbers from January. Passenger, automobile and truck traffic all were up from the same month last year - and the January passenger total of 93,039 was the highest in three years, Mr. Lamson said.
Another possible harbinger for the coming year: vehicle reservations so far are up five per cent for the coming summer season.
The board also received an update on vessel construction and refurbishment projects; approved year-round off-site parking at the SSA Lewis Bay lot in Hyannis, and allowed a slight reduction in the Nantucket operating schedule from March 29 through April 13.
The boat line provides the only year-round vehicle and passenger ferry service between the mainland and the Islands.
As for the 2005 fiscal numbers, Falmouth SSA governor and board chairman Robert Marshall said the boat line is "a long way from insolvent." Although the SSA projections were off its plan, he said the authority still is generating a surplus.
Regarding the factors that cut into the authority's 2005 performance, Mr. Marshall said, "We've hopefully fixed them for this year."
The boat line last year approved across-the-board fare increases that took effect this year.
In his review, Mr. Davis said that operating revenues for 2005 totaled $68.2 million - $2 million above 2004, but still about $300,000 below projections.
Most of the increase came through through freight revenue, which exceeded budget projections by $1.8 million. Truck traffic rose 11.7 per cent for the year to 141,620, with truck traffic increasing by 10,429 trucks on the Vineyard route and 4,368 on the Nantucket route. (Sport utility vehicles are now considered trucks when it comes to tracking traffic statistics.)
Both passenger and automobile traffic fell last year, however.
SSA passenger traffic fell 2.4 per cent to 2,609,835 passengers. All of that came at the expense of the Vineyard route, where passenger traffic fell by 3.1 per cent. On the Nantucket route, passenger traffic climbed 0.6 per cent.
Automobile traffic dropped 1.4 per cent to 455,657. Traffic fell 1.5 per cent on the Vineyard route and 0.4 per cent on the Nantucket route.
As revenue was falling at the boat line, expenses were increasing, mostly due to an increase in fuel oil and maintenance costs. All told, operating expenses for the year were $65.5 million, $2 million higher than in 2004 and $1.9 million over budget projections.
When compared with the prior year, fuel expense climbed 24 per cent, to $940,000. Last year, the average cost of fuel oil to the boat line was $1.778 per gallon, compared to $1.315 per gallon in 2004.
Dolphin and dock repairs at the Woods Hole terminal and siding and roof repairs at the Nantucket terminal were among the projects that caused maintenance expenses to climb $600,000 over 2004.
Last year's balance sheet also included a loss of more than $400,000 on the sale of the Schamonchi, a conventional ferry that the SSA had operated seasonally between the Vineyard and New Bedford from 2001 to 2003. The boat line last year sold the vessel, initially acquired as part of a $1.75 million package in 2001, for $105,000.
Also at Tuesday's meeting:
* Breaking down the traffic statistics from January, Mr. Lamson said passengers were up 14.4 per cent, automobiles were up 7.6 per cent, and trucks were up 27.6 per cent from the same time in 2005.
The SSA - which expects to lose money during its off-season months - lost less money than projected and less money than last January. The boat line's net operating loss for the month totaled $2,054,293, which is $646,645 lower than budget projections and $103,000 lower than January 2004.
* Director of engineering Carl Walker reviewed the status of several projects under way, including the construction of the double-ended Island Home ferry, slated to replace the Islander this year on the Vineyard route.
Mr. Walker said work continues on the Island Home, whose construction in Pascagoula, Miss., was delayed last year by Hurricane Katrina.
In other projects, the fast ferry Flying Cloud was slated to have new Detroit Diesel engines installed this week in Quonset Point, R.I. The vessel is scheduled to return to service March 27.
Construction is continuing in Somerset on the Flying Cloud's replacement, the Iyanough. The new fast ferry may enter service this October on the Nantucket route.
* The SSA board voted 4-0, with New Bedford governor David Oliveira absent, to approve year-round parking at the SSA off-site lot at Lewis Bay in Hyannis. Year-round parking formerly had been available only at the Hyannis terminal off South street.
The board approved management's plan to create 200 off-site permits for the Lewis Bay lot. The pricing structure would be the same as in Falmouth, with terminal lot permits costing $750 and off-site permits costing $550. The permits would be valid for a year starting May 15. The lot also would continue to accommodate daily parking.
* The board voted 4-0 to pull the freight vessel Gay Head off the Nantucket schedule from March 27 through April 13, which will allow the overhauling of the vessel. For that period, the SSA will operate the ferry Eagle and the newly expanded freight vessel Sankaty each for three round trips per day.