SSA faces two requests to tap its revenue

By Nelson Sigelman - December 8, 2005

Against a backdrop of flat revenue growth and fare hikes, the outgoing chairman of the Steamship Authority (SSA) board said the boatline needs to protect its main source of revenue, walk-on passengers, from private carriers and carefully weigh a request to subsidize Tisbury's park and ride service against the likelihood of future requests.

Both items will be on the agenda when the SSA board, now chaired by Marc Hanover of Oak Bluffs, meets next Thursday in Woods Hole for its last meeting of the year. In January Mr. Hanover will pass the rotating chairman's gavel to Bob Marshall, Falmouth SSA member, under the terms of the legislation that expanded the authority to five voting members.

The subject of passenger fares is expected to be raised when the members take up requests by two private ferry operators to increase their existing passenger service to Martha's Vineyard and Nantucket. The discussion is expected to focus on the extent to which any expansion of service, now limited by licensing agreements with the SSA, would cut into boatline profits.

In the wake of across-the-board rate hikes approved by the board in October to make up a projected $4 million deficit in the 2006 operating budget, Mr. Hanover said he is reluctant to do anything that would cut into boatline revenues. "I am concerned about giving any more business away to anyone," he said. "We need all the walk-on passengers we can get because that is the place we make money. Those fares help subsidize our preferred rates."

Hy-Line, which operates between Hyannis and Oak Bluffs and Hyannis and Nantucket, wants to increase the number of passengers it is licensed to carry aboard the Grey Lady, the high-speed catamaran on its Nantucket run, Currently limited to 149 passengers, the company would like to increase that number to 298, the Grey Lady's Coast Guard-rated capacity

Cape and Islands Transport, which operates the Pied Piper ferry between Falmouth and Edgartown's Memorial Wharf during the summer months, wants to increase passenger capacity and the number of trips the company is allowed to run.

Both companies pay a per passenger fee to the SSA under the terms of existing licensing agreements. The statutory licensing of the authority was put in place to prevent private operators from skimming profitable summer passenger service and leaving the boatline with no counterweight to off-season service deficits.

The family-owned Hy-Line company has earned a reputation for reliable and customer-friendly service and is very popular with Nantucketers. That has not always been the case for the SSA, which has begun to earn better marks from Nantucketers thanks to the efforts of general manager Wayne Lamson to respond to many of their complaints.

Mr. Hanover said he understands why Hy-Line has earned a dedicated ridership and wants to carry more passengers, but he believes that any increase would come at the expense of the SSA.

The SSA's bottom line and the unrelenting pressure of flat growth and increased costs places on fares is also expected to underpin board discussion of a request by the town of Tisbury that the SSA continue to subsidize the cost of bus service between the Tisbury SSA terminal and the town-owned park and ride lot off State Road.

The Vineyard Transit Authority (VTA) provides the bus service and the SSA and VTA split the costs under the terms of a contract signed in July, 2003 and set to expire the end of this month. According to Mr. Lamson, the service costs the boatline between $60,000 and $70,000 per year ,depending on the number of riders, fuel costs, and driver schedules.

According to figures provided by the VTA, ridership between January and November totaled 59,763.

Mr. Lamson said he expects to recommend to the board that the boatline continue to help pay for the service. He said one benefit of the agreement is that the town would allow the use of the park and ride lot in the event of an overflow or in an emergency when staging is not possible in the terminal lot.

The potential future costs of the agreement, including possible requests from Nantucket and Oak Bluffs to help with the costs of contemplated shuttle service, are a concern for Mr. Hanover. "What will they be looking for in terms of a contribution?" he said.

Mr. Hanover said that every dollar spent by the boatline needs to be made up by fares and that after raising rates to help make up a $4 million deficit every cost needs to be examined.

Looming in the background of the discussion is the use of embarkation fee revenue, money generated for the SSA's port communities through a 50-cent per passenger fee and meant to be used to mitigate the effects of ferry service. Tisbury, which received more than $250,000 last year, and the SSA have been at odds over whether the town or the boatline should pay for police traffic coverage at the Vineyard Haven terminal. Mr. Hanover said that the cost of the shuttle service would be an appropriate use of embarkation fee money.

In other business, the board will receive a progress update from management on the construction of the new Island Home ferry and hear a staff report and recommendation regarding the number of preferred spaces allocated on a daily basis and whether there should be an increase.

Mr. Lamson said that at the last meeting Mr. Hanover asked management to look into some complaints from riders about the availability of preferred spaces set aside for Island vehicle owners.

Mr. Lamson said there are currently 80 spaces set aside in each direction each day spread out across the schedule. For example, there are eight reserved spaces on the popular 8:15 am boat from Vineyard Haven.

Questions, said Mr. Lamson, are should the number of spaces be increased or should it be kept at the same level and allocated differently. That raises other issues he said.

Any shift to the morning trips would limit the number of reservations that can be made earlier than seven days out. As a result the SSA could lose full-fare customers and open up the possibility that boats might sail with empty spaces.

Mr. Lamson said that the SSA has worked to allow customers to be able to book trips well in advance and any move to set aside more spaces would appear to run counter to that effort.

He said the arrival of the Island Home next year will help to alleviate some of the pressure because of the vessel's added vehicle capacity.