SSA hikes rates to barely a public ripple of protest
With the enthusiasm of a group forced to walk the plank, the Steamship Authority (SSA) board last week voted to approve a slate of rate hikes designed to make up a $4 million shortfall in the boatline's 2007 operating budget.
Although $3 million of the budget shortfall is to be generated on the Vineyard side of the ledger, only a handful of Island residents and public officials attended last Thursday morning's meeting held in the Katharine Cornell Theatre in Tisbury.
The connection between boatline costs and fares and the need to cut costs, find efficiencies, and generate more revenues outside the fare box were reoccurring themes throughout the meeting. But before the boatline can follow the basic business principle of trying to do more with less, it must navigate through political waters.
New Bedford SSA member David Oliveira (left) confers with Vineyard member Marc Hanover at last week's meeting.
For example, reducing the frequency of trips would save manning costs but would be less convenient for travelers. Using the expanded capacity provided by the second tier vehicle lift decks on the new Island Home, which add spaces for an additional 18 vehicles, has been a bone of contention in the past. The new ferry is scheduled to replace the Islander in early 2007.
During the discussion that preceded a unanimous vote to approve the 2007 summer schedule, board chairman Robert Marshall of Falmouth pointed out that the lift capacity of the new boat, which has ten more spaces on the main deck than the Islander, would not be used under normal circumstances and would only be available to help alleviate backups. He said that during the many meetings surrounding the design of the boat and the possibility of adding lift decks, Vineyard residents spoke against using the increase in capacity to carry vehicles on a regular basis.
More immediately, Vineyard member Marc Hanover of Oak Bluffs said he had heard from a number of Islanders who were having difficulty getting off and on the Island. Island station manager Bridget Tobin confirmed that there have recently been long standby lines of vehicles waiting up to four hours to get off the Island.
Wayne Lamson, SSA general manager, had no immediate answers for the backups, but he said he would look at the problem. Mr. Marshall said the additional ten spaces on the Island Home would help in the future.
Regarding the additional capacity provided by the lift decks and any change in policy that would place those spaces in the reservation pool, there was general agreement that it would be best to gain some experience operating the vessel before considering those options.
Rates go up
The rate hikes, presented as part of a $72,828,000 operating budget, called for across-the-board rate hikes on the Vineyard route, which accounts for 57 percent of the cost of service, and more limited increases on the Nantucket side of the ledger.
During the discussion of the rate hikes the members took the opportunity to discuss efforts to cut costs and the need to redouble those efforts. Mr. Hanover highlighted the consequences of past decisions.
He said it was important for Vineyarders to understand all of the costs associated with the Island Home coming on line. The fact that Islanders had insisted on building a double-ended boat had added $5 to $6 million to the price tag and now it was time to pay for the boat, he said.
Mr. Marshall said the boatline's personnel costs were proportionately higher than most of the transportation industry. "Manning is an issue we must continue to work hard on," he said.
Flint Ranney, Nantucket member, prefaced his vote to approve the rate hikes with the comment, "I hate rate hikes," and his hope that the members would not face the same choice next year.
Mr. Hanover said that were it not for management's efforts, the shortfall would have been closer to $7 million. The vote was four to one.
In a no vote that appeared to take the other members by surprise, vice chairman David Oliveira of New Bedford voted against the rate hikes and made no comment. Asked by The Times after the conclusion of the public portion of the meeting why he did not make the vote unanimous, Mr. Oliveira characterized his vote as a symbolic gesture.
He said he could not go along with a rate hike when the SSA is asking SSA employees to contribute only 5 percent to the cost of their health insurance benefits while most working people are asked to contribute much more.
Under the budget approved Thursday, 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.
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.
Discounted Vineyard round-trip auto excursion rates for Island residents would jump by $10 in season and $7 off season. Off-Island 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.
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 increase from $550 to $575.
Under the 2007 summer schedule, approved by unanimous vote Thursday, the Island Home will sail from Woods Hole at 6 am and end its operating day in Woods Hole after completing its 9:30 pm trip from Vineyard Haven. As a result there will no longer be a 10:30 pm trip any day of the week.
The Katama freight vessel round trips were reduced from seven to four at the beginning and end periods of the summer schedule. The change means that two crews instead of three crews will be needed, reducing manning costs.
The summer schedule was also extended six days, to Oct. 17, to meet the higher than expected demand for service experienced this fall, Mr. Lamson explained.
In line with efforts to develop outside sources of revenue, Mr. Lamson introduced a proposal to sell advertising space on vessels and in terminals. Mindful that a previous advertising proposal introduced during the tenure of the last boatline executive, Fred Raskin, raised a ruckus that led to its demise, Mr. Lamson said he intended it to be a modest effort to attract select national advertisers such as Mercedes Benz and American Express, using the services of Prestige Media of New York, a company that lists several transportation companies as clients, including Hy-Line Cruises and Block Island Ferry.
Mr. Lamson said the sale of advertising space would be limited to only three poster ads per vessel and one per terminal for a total of 20 posters. He estimated the boatline would earn $80,000. "I think it is something worth trying," said Mr. Lamson.
In a brief discussion, Mr. Marshall questioned why Mr. Lamson wanted to restrict the program to only three posters on the larger boats when the goal was to earn money.
Mr. Lamson said he wanted to start slow and the program could always be expanded.
"It's a good way to start," said Mr. Hanover. Mr. Ranney agreed with the go-slow approach. The board voted unanimously to authorize Mr. Lamson to enter into a contract with Prestige Media.
Mr. Lamson reported on efforts to cut costs through energy conservation by working with local groups. He said he had recently met with Kate Warner of the Vineyard Energy Project to discuss ways to save on energy. He estimated the boatline spends approximately $500,000 on electricity and set a goal of cutting that need by ten percent for a $50,000 savings.
Mr. Lamson said the boatline had received a grant from the Cape Light Compact to replace light fixtures with energy efficient bulbs. He estimated the boatline relighting would save approximately $20,000 per year.
The SSA is also looking into a wind turbine for its Fairhaven facility and will be scheduling energy audits.
In other business, the board raised the fixed cost of the transportation contract with the Martha's Vineyard Regional High School District from $35,000 to $50,000 in the next fiscal year, which begins on July 1, 2007. Mr. Lamson said the school system currently pays a fixed amount of $35,000 for transportation and used almost $96,000 in services for students, teachers and administrators, giving the Vineyard considerably more than the 50 percent discount extended to other government entities, including the Nantucket School district.
The board also approved the reservation opening dates for the 2007 season. Reservations for the spring schedule will be available by phone and on the SSA web site beginning Dec. 4; Headstart reservations for the summer season will be available, by mail only, beginning Jan. 3; summer reservations will be available for the general public by mail and on the web beginning Jan. 17 and by telephone beginning Jan. 31. The fall schedule goes on sale beginning June 18.
SSA management also presented the draft 2007 capital budget with 11 projects totaling $2.5 million. A vote on that budget is expected when the board meets this month.