To the Editor:
Last month the Steamship Authority, in the face of questions from local officials and citizens, approved a rate hike due to take place January 1, 2015. Questions arose when a major budget projection concerning fuel expenses didn’t seem to be in line with reality. After disclosing a surplus from the previous year, the authority was asking for a 2.5 percent increase for the upcoming year in the face of a declining oil market.
The authority stated that their experts predicted $90-95 per barrel oil for the coming year. On the day of the rate hike vote, oil was trading at $83 per barrel, thus projecting another budget surplus. Today as I write this letter oil is trading well below $70 a barrel. If oil stays at this price, the authority will have a multiple million dollar surplus.
This rate hike is disingenuous, in that it was voted knowing there was the likelihood of a surplus. Now we have a collapse in oil prices.
Marc Hanover, the Island Steamship Authority member, needs to take action to protect Islanders from an unnecessary price increase that will affect excursion rates, off-season parking rates, as well as passenger ticket rates. They will not return this surplus to us. Last year they found other places to spend it.
Mr. Hanover has a duty to right this ship and recognize the bad math that was used to establish the basis of this budget line item. Nine months from now the steamship board will boast that they lived within their budget, but it will be a lie. They will have done it by using this surplus to balance their spending. You and I will have been fleeced by a rate hike on January 1.
Contact with the state attorney general’s office may have to be an option when consumer protection issues arise. Multiple years of surpluses in this line item and votes requesting 2.5 percent increases in the face of a declining oil market violates public trust. Mr. Hanover must restore this trust. I ask that he moves to suspend and consider repeal of this current rate hike before year’s end.
The Steamship Authority is our only viable form of transportation. We don’t have other options or choices. It must remain affordable for everyone. Holding rates down is important for those who are on fixed incomes, have unexpected medical needs, or economic hardship. Sometimes rate hikes are necessary, but this one has a big flaw.