For SSA, costs rise, so will fares
The Steamship Authority (SSA) board Tuesday reviewed proposed rate hikes designed to make up a $4 million shortfall in the boatline's 2007 operating budget, $3 million of which must be generated on the Vineyard side of the ledger.
The proposal, which was included as part of a $72,668,000 budget presented to the members at their monthly meeting in Hyannis, calls for across-the-board rate hikes on the Vineyard route. The biggest increase would be in the discounted excursion fares now enjoyed by year-round Islanders and holders of annual Woods Hole parking permits.
Nantucketers, who must only make up a $1 million shortfall, will fare slightly better. Under a formula agreed to by the SSA members several years ago, rates are based on the cost of service for each route and what is needed to cover any shortfall.
[Click here for a copy of the draft budget. The proposed rate hikes for Martha's Vineyard are available here].
For example, a route-by-route breakdown included in the management report showed that the SSA is expected to run 14,946 trips on the Vineyard route and 7,278 trips between Nantucket and the mainland in 2007. The total cost of service is projected to be 57 percent for the Vineyard and 43 percent for Nantucket.
The members also heard a report on several capital projects including the ferry Island Home now under construction. Carl Walker, SSA director of engineering, told the board that the VT Halter Marine shipyard in Pascagoula, Miss., where the $31 million ferry is being built, had requested an extension beyond the Nov. 29 delivery date.
Although the details still need to be worked out, the board agreed to a two-month extension, sparing the shipyard from significant contractual penalties. Robert Marshall of Falmouth, SSA chairman, said the members agree that the SSA should try to accommodate a community and shipyard still struggling to recover from the effects of Hurricane Katrina, one of the most destructive hurricanes ever to hit the United States.
Marc Hanover of Oak Bluffs, Vineyard SSA member, said management is continuing to look for cost savings but faces rising expenses. As an example he said that despite saving 93,000 gallons of fuel through careful monitoring of vessel speed the boatline spent an additional $500,000 this year.
The proposed fare hikes are part of a draft operating budget that is scheduled to be voted on when the SSA board meets in October.
If approved, the cost of a one-way adult passenger ticket would rise from $6 to $6.50. The ferry embarkation fee would add an additional 50 cents, bringing the cost of a round trip ticket to $14.
The embarkation fee legislation, which was sponsored by Rep. Eric Turkington of Falmouth and Sen. Robert O'Leary of Barnstable and approved as part of a statewide municipal relief package, placed a 50-cent fee on the price of each one-way ferry trip to be paid to the town where the trip originates. Islanders are exempt from the fee if they buy tickets by the discount book, use excursion fares, or travel with sports teams.
Nantucketers would see their conventional ferry one-way adult fare increase from $13.50 to $14.50
Regular one-way Vineyard auto rates in season for vehicles under 17 feet would increase by $3, from $62 to $65, and from $72 to $75 for vehicles over 17 feet. Off-season rates would rise by $2 from $38 to $40 and from $48 to $50, respectively.
Nantucketers would see no increase in their auto rates. A summer visitor in a vehicle less than 17 feet would still pay $350 for a round-trip fare.
The main increase in fares on both routes would be in the cost of a round-trip excursion fare that is now subsidized by full fare passengers. According to the SSA management report, revenue from excursion-fared vehicles on the Vineyard route covered just 30 percent of the cost in 2005 and 38 percent on the Nantucket route.
Discounted Vineyard round-trip auto excursion rates for Island residents would jump by $10 in season and $7 off-season. Off-Island shopping trips would cost $52 off-season and $83 in season, for vehicles less than 17 feet, and $72 and $103 for those over that length.
Nantucketers with vehicles under 17 feet would see off season excursion rates jump from $125 to $135 and in season rates soar from $180 to $195.
The Vineyard commercial vehicle rate for vehicles over 20 feet would increase by 8.5 percent.
The annual parking permit for treasured Woods Hole spots would rise from $750 to $800. The cost of a Palmer Avenue lot annual parking permit would jump from $550 to $575.
On Tuesday SSA management identified the significant cost categories fueling an 18.5-percent increase in operating expenses from 2006 to 2007. They are fuel oil, up 15.7 percent ($897,473); health and welfare costs, up 7.4 percent ($819,347); insurance, up 12 percent ($364,668); and depreciation, up 48.9 percent ($2,577,267).
In total, those expenses would rise from an estimated $25,175,796 in 2006 to $29,834,551 in 2007.
At the Tuesday meeting, Mr. Walker described the progress to date on the Island Home. He said that although the shipyard was doing everything it could to complete the vessel, VT Halter had underestimated how long it would take to recover. A category-four hurricane, Katrina came ashore last summer just west of the boatyard.
He said much of the contract labor force had never returned to the area because they could not find housing. And the people who had remained or returned were in high demand.
Oil companies anxious to get refineries and platforms working had "cherry picked" the work force, Mr. Walker said, and they were willing to pay anything to get the rigs going again.
Under the terms of the contract, the shipyard was subject to ever increasing penalties if the delivery date were not met. Originally the vessel was due to be delivered in June. Because the issue involved possible litigation, the members met in executive session to discuss whether to stick to the contract's November delivery date.
Mr. Hanover said the shipyard has done well despite being under a great deal of pressure. He said the SSA is interested in a quality job, not a rush job, and decided it would do everything it can to help the people in the community get back on their feet.
In his management report, Mr. Lamson raised the issue of limited advertising on the boats and in the terminals as a way to raise revenue and reduce pressure on fares. Mr. Lamson said other operators provided advertising space on a regular basis.
Mr. Hanover said that while he was personally opposed to it he would like to see how much money it would generate. Flint Ranney, Nantucket SSA member, agreed with Mr. Hanover.
"So you guys can be bought, for a price," said Mr. Marshall, drawing a hearty laugh from his fellow board members.