SSA plans fee review for private carriers

By Nelson Sigelman - December 22, 2005

In their last meeting of the year the Steamship Authority (SSA) board agreed to renew the licenses of several private passenger ferry operators for one year, not the three years recommended by management. The board's action was taken in anticipation of a review of all licensing fee structures.

The board also agreed to continue to pay a share of the cost of Tisbury's park and ride shuttle bus service for at least one more year. The SSA offered no guarantees that the payments would continue in the future.

Tensions between the leadership of the boatline's largest union and SSA officials also bubbled to the surface at the conclusion of the meeting when Bill Campbell, a representative of the Marine Engineers Beneficial Association (MEBA), rose to speak about his membership's rejection of a new collective bargaining agreement offered by the SSA in a vote of 130 to 0.

Mr. Campbell criticized a letter from Wayne Lamson, SSA general manager, sent to each union member in support of ratification prior to the vote.

In his letter, Mr. Lamson said that SSA employees would continue to be among the highest paid employees in the marine ferry industry and the contract reflected the need to tighten up some costly and wasteful practices and create a more responsive and competitive boatline.

Mr. Campbell said crewmembers found the "threatening tone" of Mr. Lamson's letter "to be insulting" and the overall contract to be little more than a pay cut. He was interrupted at one point by Marc Hanover of Oak Bluffs, the Vineyard SSA board member, who asked Mr. Campbell if the meeting was the forum he wanted to use to discuss contract issues.

With board members poised to respond, Mr. Campbell said he had one final thought: he wished everyone a happy holiday season. The exchange ended on that positive note.

This week, Mr. Hanover said he was perplexed by Mr. Campbell's comments. He said there was nothing threatening in Mr. Lamson's letter or its tone and that Mr. Lamson had the complete support of the board members.

Passengers needed

The conservative course for licensed carriers was set by Mr. Hanover, who said the boatline could not afford to give away any more business to private ferry operators. Mr. Hanover, ending his first year on the board, said that with costs rising and ridership declining this was not the time to allow competitors to carry more passengers who might otherwise use the SSA.

"We need the revenue," said Mr. Hanover during a discussion of the first licensing request, "We need the passengers."

According to a management report, the SSA carried 2.9 percent fewer passengers, year to date, versus the previous year.

Mr. Hanover noted that the amount paid per passenger by the different carriers varied greatly and said it would be in the authority's best interests to grant one-year licenses, not three years, and conduct a review of the entire fee structure. He said that if it turned out that the underpinnings of the current structure are sound there would be no harm done.

With some exceptions, the SSA's enabling legislation gives it control over private ferry operators that wish to provide service to Martha's Vineyard or Nantucket. 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.

As a result, private companies that provide ferry service to the islands pay a per-passenger fee to the SSA, an arrangement negotiated as part of a licensing agreement.

On Thursday the board took up three licensing requests, all of which were recommended by management. Freedom Cruise Line, which provides summer passenger service to Nantucket and Cape, was seeking a renewal with no change in passenger capacity. According to the SSA, in 2005 Freedom carried 23,036 passengers and paid the SSA $12,384 in licensing fees, or 54 cents per passenger. The board approved a one-year license.

Cape and Islands Transport, which provides seasonal passenger service between Falmouth and Edgartown aboard the Pied Piper, asked to increase the number of passengers it is allowed to carry on its last trips from Edgartown to Falmouth on Sundays and holidays from 95 to 149 passengers and, or that it be allowed to run an additional ferry. In 2005 the Pied Piper carried 27,228 passengers and paid $22,674 in licensing fees or an average of 83 cents per passenger. The board held the line at the company's current service level.

Hy-Line, which operates between Hyannis and Oak Bluffs and Hyannis and Nantucket, and runs an inter-Island service, asked 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 asked to increase that number to 298 on a year-round basis. In the last 11 months of the year Hy-Line carried 92,711 passengers on its conventional ferry and 284,952 fast-ferry passengers (377,663 total) and paid a total of $439,585 in license fees or $1.16 per passenger.

When it came time to consider the Hy-Line request, which included using its high-speed ferry Lady Martha on the inter-Island route, the members diverged.

Hy-Line has carved out a reputation among Nantucketers for providing reliable and customer-friendly year-round fast-ferry service. In turn, residents and visitors have come to rely on the ferry.

Arguing for no increase in passenger capacity, Mr. Hanover said that he was trying to be financially responsible and was not attacking Hy-Line, which he expected would be involved in any discussion of licensing fees.

The board members agreed with Mr. Hanover on his request to limit the Hy-Line license to one year but went along with an increase in capacity when it became clear that any adjustments would require separating the license request into its various parts.

The vote was 4 to 1, with Mr. Hanover opposed.

Mr. Hanover adopted the same cautious financial approach regarding shuttle bus service between the Vineyard Haven SSA terminal and the park and ride lot off State Road, Mr. Hanover said he would support continuing payments for one year but that he wanted to explore other ways to pay for the service.

The shuttle cost the boatline $64,210 from November 2004 to October 2005 and carried 62,960 passengers during that time period, a 33 percent increase over the previous year.

Mr. Ranney noted that if passengers were charged $1 the service would not cost the boatline anything. He said Nantucket was also interested in a similar service but had not identified a suitable site for parking numerous vehicles.

The December meeting in Woods Hole was also the occasion for the election of officers as prescribed by law. Bob Marshall, Falmouth member, was elected chairman, David Oliviera, New Bedford, vice chairman, and Flint Ranney of Nantucket, secretary.

In his last chairman's report, Mr. Hanover praised Wayne Lamson and his management team for making long overdue changes and moving the boatline forward. He also had kind words for his fellow board members.