With finances on an even keel again amid ongoing robust ferry traffic, Steamship Authority governors voted Tuesday to approve a $119.6 million operating budget for the coming year.

While avoiding rate hikes, the new budget reflects some increased operating expenses including vessel fuel oil, which is projected to cost $2.2 million more than in 2021— a 36.5 per cent increase, assistant treasurer Courtney Oliveira said.

“We were budgeting $1.81 to $2.49 a gallon in 2021, compared to this budget which is $1.75-$1.88 a gallon,” Ms. Oliveira said, referring to the price at which the boat line hedges (agrees in advance to buy at a specific price range) its fuel purchases.

“We are hedged through the third quarter of 2022,” Ms. Oliveira said.

Payroll will account for another $2 million in projected expenses over the current year’s budget, with pensions and benefits adding more than $1 million.

Maintenance expenses for vessels and terminals is projected to cost $620,000 more.

Five ferries are slated for dry dock in 2022 at a total cost of $5 million: the Eagle ($1.3 million), Island Home ($1.1 million), Iyanough ($650,000 million), Katama ($825,000 million) and Nantucket ($1 million).

Revenue projections totalling roughly $123 million are based on this year’s traffic numbers through August 31, SSA treasurer/comptroller Mark Rozum said.

Parking revenue is expected to make the biggest gains, growing by 1.9 per cent and adding $115,384.

A projected $1.7 million (1.5 per cent) increase in freight revenue and $1.3 million (.3 per cent) rise in automobile revenues also will help offset a $445,074 (1.5 per cent) drop in passenger fares.

Adding in other revenue from SSA operations, such as concessions and bicycle fares, projections call for a net operating income of $9.1 million — just under last year’s budgeted amount, Mr. Rozum said.

Joe Sollitto, who represents Oak Bluffs on the boat line port council, told the board the advisory group met earlier this month and voted unanimously in favor of the budget.

“Mark and Courtney, what portion of this budget causes you the most anxiety?” Vineyard governor James Malkin asked the treasurers.

“All of it,” Mr. Rozum replied. “I’m worried by nature.”

The impact of Covid-19 on last year’s passenger revenues remains fresh in his mind, Mr. Rozum told the board. “Once you experience something, you’re always nervous about it,” he said.

He said he is also apprehensive about the unhedged fourth quarter of fuel oil — some 850,000 gallons — while the specter of supply chain problems has him concerned about potential cost overruns at the shipyards.

“And then, overall, like everyone else, inflation,” he concluded. “It’s hard to nail down one specific item, but that’s our job, to worry about it all.”

In other business Tuesday, governors approved a $2 million contract with ADK Group of Boston to design a new website and mobile application for the boat line.

“This is obviously a big-ticket item,” said general manager Robert Davis, who said a grant has been identified to help fund the project.

The prospective funding, from the federal Ferry Boat Formula Program, would reimburse the SSA for nearly 80 per cent of the contract, Mr. Davis said.

A committee of SSA department heads led by communications director Sean Driscoll sifted 16 proposals and unanimously selected ADK Group.

“They were consistently at or near the top of eveyone’s list to start off with, and they stayed there through the process,” Mr. Driscoll said, adding: “They presented lots of good examples of prior work, including examples in the travel sector.”

The company’s other clients have included Brigham and Women’s Hospital, Harvard University’s Reischauer Institute of Japanese Studies and the MIT Initiative on the Digital Economy, according to the ADK Group website.

Also Tuesday, SSA project manager Bill Cloutier updated the board on the Woods Hole terminal waterside reconstruction, which has pushed the terminal project more than $3 million past its $53 million estimate, with shoreside work yet to begin.

Change orders from contractors, chiefly Jay Cashman, Inc., have totaled more than $13 million to date, a 32 per cent increase over the original $43 million contract, Mr. Cloutier said.

Last weekend’s breakdowns of the freight ferries Katama and Sankaty were caused by unpredictable malfunctions, SSA director of marine operations Mark Amundsen told the board.

He said the hatch that failed aboard the Katama on Saturday morning was damaged by the support ring beneath a truck, and the Sankaty’s breakdown Saturday night stemmed from the failure of a relatively new manual voltage regulator that was replaced next morning.

“There’s really no way of measuring the life expectancy of the component,” Mr. Amundsen said. “We had a spare.”

SSA maintenance workers also repaired the hatch aboard Katama, which is set to return to service later this week while Sankaty heads to dry dock, he said.

Other upcoming maintenance work includes a trip to dry dock for the Island Home, which is heading to Senesco Marine in Rhode Island for an overhaul and Coast Guard hull examination in January and February.

Senesco’s $1.36 million bid was $100,000 less than the second-place bidder, but New Bedford governor Maura Tierney wondered if the savings warranted returning to a shipyard with which the boat line has had costly litigation in the past.

“We’ve had some issues with Senesco,” Ms. Tierney said. The SSA has settled two legal disputes with the shipyard in recent years.

But Mr. Davis stuck by the recommendation.

“Since the issues we have had with the Martha’s Vineyard [in 2018], we have sent other vessels to Senesco for repairs and overhauls,” he said. “Their proposal met the requirements for it to be a responsive bid.”

Mr. Amundsen ageed. “I feel comfortable to go with Senesco shipyard . . . as we do need to develop another good shipyard other than Thames shipyard [in Connecticut],” he said, adding:

“It’s important for us to have multiple dry dock companies that work with us, in the event that we have a situation of emergency dry docking.”