Sinking: The Steamship Authority

Davis requests aid from Gov. Baker or says ferry service will cease on May 31.

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Legislation passed the Massachusetts Senate Thursday that make state responsible for SSA deficit. — Rich Saltzberg

Updated 12:22 pm, Saturday*

The Steamship Authority’s finances are so dire that the ferry line cannot operate beyond the end of May without “urgent financial assistance” from the commonwealth, a Friday press release states. In a letter to Governor Charlie Baker Thursday that was copied to Massachusetts Speaker of the House Robert DeLeo, Senate President Karen Spilka, and other officials, SSA general manager Bob Davis pleaded for financial assistance. Davis informed Gov. Baker the ferry line was hemorrhaging $1 million a week.

“Should ridership trends continue at the current pace, weekly revenue losses will increase,” Davis wrote. “After reviewing these ominous figures, the authority is genuinely and credibly concerned that we will be unable to meet our statutory obligations to the islands by the end of May 2020.” 

The release accompanying the letter paints a similar picture. 

“The Steamship Authority will not be able to meet its statutory obligations to provide for the transportation of people and goods to the islands of Martha’s Vineyard and Nantucket beyond May 31, 2020 without financial relief due to the unprecedented decline in ridership-generated revenues amid the COVID-19 pandemic,” the release states. 

Asked Friday morning if all ferries on both islands would halt on May 31 without an infusion of capital, SSA spokesman Sean Driscoll said, 

“Yes, that’s our projection.”

Driscoll said he was unable to project what would happen to SSA employees on May 31. 

“We don’t know; we’ve never been here before,” he said.

He added that the SSA projection for the end of May isn’t immutable should fiscal matters take another trajectory. 

“We will do everything in our power to operate as long as possible,” he said.

In a brief statement released Friday evening, Representative Dylan Fernandes sought to bolster confidence by declaring SSA ferries wouldn’t halt.

“We are sailing in uncharted waters as this pandemic has upended every aspect of our lives and is causing unprecedented economic devastation,” he wrote. “The Steamship Authority is the most essential service islanders have to connect to the mainland. The boats are going to keep running and we are committed to working with our state and federal partners to ensure the viability of this critical lifeline for island residents.”

Later Friday evening, following a request for comment from The Times, Gov. Baker’s office channeled a response through the Massachusetts Department of Transportation.

“MassDOT has been in communication with the authority, and the administration is reviewing this request,” MassDOT communications director Jacquelyn Goddard emailed.

Driscoll confirmed information outlined in Davis’s letter about the present unavailability of port town assessments to stem the fiscal gap. Barnstable, Falmouth, Martha’s Vineyard, Nantucket, and New Bedford are statutorily on the hook for SSA deficits, but that process cannot take place until December 31, Driscoll said, hence the ferry line is begging for state help. 

SSA chairman Jim Malkin, the Vineyard’s representative on the board, told The Times the public should attend the virtual board meeting Tuesday morning to learn more about the state of the ferry line.

“The issue of the Steamship Authority’s financial condition [came up] with Oak Bluffs a week ago, and then this week with the Dukes County Commissioners,” he said. “I am inviting all town officials, emergency officials, and interested residents to join the Zoom board meeting at 10 am on Tuesday, where cash, cost containment, and scheduling issues will be discussed. I had hoped the process of dealing with COVID-19 would have resolved itself sooner, so that the Island and its visitors would have a clearer picture into the summer. That has not happened. Despite the cost cuts and schedule reductions, the Steamship Authority is burning money on a weekly basis.” Malkin went on to say, the SSA is subject to a seasonal cycle much like many Vineyard businesses. “Historically the winter’s losses are made up with summer revenues,” he said. “We cannot see with any clarity, based on current bookings, that that will be the case this year.”

Oak Bluffs Selectmen Chairman Brian Packish, whose town is still reeling from news the terminal there is too unsafe to open, decried “gross mismanagement” at the ferry line and renewed his call for Davis’s ouster.

“If I were a state official, I would make it a requirement of any bailout,” he said.

Ralph Packer, whose Vineyard Haven maritime company Tisbury Towing and Transportation owns a number of barges and two tugboats, described the predicament the SSA is facing as “shocking” and said his vessels are available to transport goods to the Vineyard, if need be, in the future.

“If they need our help, we’re always available,” he said. Packer went on to say that “under the circumstances,” the SSA is doing “a good job.” Nevertheless, he said “if the Steamship doesn’t run boats, we’ll be in an extremely desperate situation.” 

Packer stressed they have not yet reached out to him for assistance. 

As far as the potential transportation of vital supplies with aircraft should a solution not come before May 31, assistant airport manager Geoff Freeman said Martha’s Vineyard Airport remains fully open. 

“Any sort of emergency aircraft would be able to utilize the airport,” he said. 

Dukes County Commissioner Keith Chatinover wrote in an email that the port communities shouldn’t ultimately be left saddled with the ferry line’s debt.

“The Steamship Authority halting operations on May 31 is obviously not a viable option for Martha’s Vineyard,” he wrote. “However, port town communities like ours must not be held solely responsible for alleviating this funding gap because the Authority is much, much more than just our lifeline. The Island, and by extension the Steamship Authority, is critical to the economy of the entire state and should be viewed as such.”

Even if the commonwealth provides emergency funds to the SSA either from its own coffers or Uncle Sam’s, the problems the SSA faces won’t be easily resolved. Per the ferry line’s enabling act, Driscoll said the operating fund — the fund used to run and maintain the fleet — cannot hold sums greater than “the current month and the next ensuing month” in the operating budget. Sums greater than that figure must be dispersed to other funds within the SSA.

“The law is very clear,” he said.

The problem appears to require intervention at the state level.

“There’s nothing that I’m aware of that the board could do as a work around,” he said. 

Any solution the commonwealth might hand down would likely require money in “a fund that we could access on an ongoing basis as opposed to [delivered] in a lump sum,” he said. “It will require a unique solution.”

Under normal circumstances the legal mechanics of the ferry line’s enabling act stipulate that at the end of the SSA’s fiscal year, which is Dec. 31, it must notify the state treasurer if it needs help with a deficit. 

“We would certify the amount of the deficiency,” Driscoll said, “then the commonwealth would give us the money and then they would assess the port communities to get their money back.”

The SSA would have to make it to December in order to exercise that type of request. And then it’s still unclear how the ferry line could digest such a sum given its two-month operating fund stricture. 

Davis suggested in his letter that the commonwealth should consider the Municipal Liquidity Facility, a vehicle of the Federal Reserve Bank, as a potential solution to the SSA’s plight. 

It wasn’t so much how the SSA would extricate itself that struck Edgartown Selectmen Chair Margaret Serpa Friday afternoon, but the  gravity of the SSA’s finances overall. 

“That’s something we’ve never seen before and the number and statistics they put in there are very alarming,” she said. 

“This year, with the sudden development of the COVID-19 pandemic,” Davis wrote, “the Authority is currently managing an unforeseeable reduction in its operations. This reduction has occurred within a matter of weeks where we are enduring declines of seventy to eighty-five percent (70-85%) from projected traffic estimates forecasted only several months ago during our annual budgeting process for FY 2020. For example, as of April 15, 2020, we have experienced reductions of 71,000 passengers (-85%), 11,500 automobiles (-79%), and 5,650 trucks (-64%) month-to-date from the same period in 2019.”

*Updated to include forecasting examples from Robert Davis, and scenarios for financial rescue.

This is a developing story.

73 COMMENTS

  1. Well, that should solve our worries about the virus getting out-of-hand on the island during the summer . . . .

    • Thank you.I needed a laugh after reading this story. Better that than crying about it,which is what it makes me want to do.

  2. Yup, it’s time to hold these moranagers accountable! Firing them doesn’t even rise to the level of what those pompous stuffed shirts deserve.

  3. Who could have predicted this? It’s not like the SSA has poured money into shore based facilities or had boats breaking down or running aground. Strange days.

    • All ferry boats need shore based facilities.
      All ferry boat companies have boats that break down.
      The SSA does not run aground.
      On very rare occasions their draft has exceeded available water depth.
      To their credit they have never had a negative freeboard experience.

  4. I guess this is what tourism means to the island. The steamship cant survive without it. I hope we can get some Federal aid to fix this.

    • You want to stick your nose in the Federal trough?
      What about pulling yourself by your own boot straps?
      Islanders pay for Island boats?

      • Cmon, the world has been shut down by this virus, this is serious stuff. The ferry should be only running 1 boat to the vineyard and 1 to nantucket until this is sorted out. Why do you think oil is under 20 bucks a barrel? Travel has ceased.

  5. It’s time to review funding of the SSA. This unprecedented time has revealed the weakness in out entire system, from healthcare to transportation. The fall back of hanging the brunt of the burden on the working public has been interrupted, as there is no working public. Corporations that touted neoliberal government deregulation are coming to the state and federal coffers with begging bowls, after an unprecedented pillaging. The SSA has long been the bane of poor islanders. Spreading the costs over the entire commonwealth, as other state highways are, would be at least, something to consider.

    • The Seeker has been more prudently managed, is more fiscally responsible than any of the SSA’s Titanics.
      Ted Box and Seeker for replacement of that sinking Corporation!

  6. Maybe some Capitalist will come along to run it at a profit; better cheaper and more dependable…..
    …and relieve these “public servants” from their misery
    Cheers

    • A cautionary question: Remember what happened to your phone bill, your electric bill, and your cable bill after “deregulation”?

    • This is not a public agency. It is owned by bondholders who by it’s enabling legislation cannot be identified.

      • Truly amazing BS.
        The SSA is publicly owned, plain and simple.
        It’s Board of Governors is appointed by elected officials from the ports it serves.
        The bondholders do not own the SSA.
        The only thing that bondholders ‘own’ is a piece of paper that says how much money they loaned, how much interest they will get, and when they will get their money back, should they be that lucky.
        There is no obligation for any bondholder to be identified.
        Anymore than a bank is obligated to identify account holders and their amounts on deposit.
        In this day and age most bonds of this nature are sliced up and bundled with hundreds of other bonds to balance risk and yield.
        There may well be thousands of beneficial owners of SSA bonds.
        How will releasing all those names improve the the SSA operation?

        • I was wondering about that. A bond is not an ownership equity though it is on the same side of the balance sheet. The SSA problem is that appointments to the Governors is political; hence the hiring of management is also political. This is a classic patronage problem. The managers are not selected on competence to do the job.

    • Before 1960 it was all private.
      Really crappy service in the winter.
      Do you want to go back to that?

      You can make a good profit running a ferry boat to the Island, in the summer
      That is why all the privates shut down in the winter.

  7. The SSA has long been the the responsibility of not so poor Islanders
    They are the one’e who elected the people who appoint the the SSA Board of Governors.

    It is grossly unfair that Islanders should have to pay all of the costs of the boats they use.
    We are part of America, all of America should pay.

    • Can you tell me where in the United States Constitution it says that is the job of the federal government. This is strictly a state issue.

    • “Islanders” have been getting a great deal for years paying well below the real cost. They were subsidized by non-resident homeowners and vacationers. Now they’re not coming – guess what the books don’t balance.

      • Can you tell me where in the Massachusetts Constitution it says that is the job of the State government?

          • The SSA is governed by the port towns that is serves. These include Vineyard Haven, Oak Bluffs, Nantucket, Woods Hole and Hyannis. I wish people would get educated before commenting with drivel

  8. let’s all take a deep breath and think about this. yes, the ssa has for years been doing fiscally irresponsible things. Let’s just look at the $1.2 million temporary office in woods hole. One thing that represents the wanton waste of money is the stainless steel railings on this building. I have mentioned this item before. There is no more expensive way to meet the building codes than this.
    Well, given the mindset of the uber wealthy, we could perhaps have had hand carved scrimshaw balusters. But the point is, we have been living in a society that has had little regard for any consequence of our actions. I understand that hard working people with low paying jobs need some help. However, I have little sympathy for the person who decided to purchase a $50 K SUV and has a $600 a month payment on it. And just to show my liberal bias here, these vehicles are the ones I have seen idling in the parking lots with no in them. That cost money you know- We have flipped the concept of the “welfare Cadillac” on it’s head.

      • Thank you for the correction, Tom. I had that number in my head for some reason, and did not check on it before I posted. Perhaps that 1.2 m was what is was supposed to cost.
        That’s $833 a square ft.
        Average cost for building a house on the vineyard is around $300 / sq. ft.

        • Commercial construction usually runs twice+ of residential.
          Add half again for municipal.
          There are so many more rules and regulations, not to mention the costs associated with the dispersion public funds.

  9. Be careful what you wish for Islanders… your desire to keep us away is forcing your lifeline to go bankrupt.

    • Don’t worry about us landlubber. Us Islanders have plenty of boats and make a habit of helping each other out … it’s just comes naturally.

  10. As dire as the SSA’s finances presume to be, this sounds like some sort of scare tactic. Of course, ridership is down, isn’t this what the I, ME, Mine islanders want? No off-island people coming to their precious island.
    Well, these wishes have consequences. The state or the feds will give the SSA a handout, at some point.
    Don’t think this would happen if we had a bridge.

    • Where are you going to come up with the six to eight billion bucks needed to build a bridge? (This is Massachusetts, so that estimate may be low.)

      • Do you realize that the “privates” only run when allowed to by the SSA. They pull the strings as to when and how the privates can run, don’t kid yourself.

  11. What an unmitigated mess. Monopoly, quasi-government entity, overreaching its original mandate, not modernizing methods, every ticket should be able to be purchased in digiform, online, send much of the heavy haulage to New Bedford, put on a few fast ferries for non auto traffic, modernize, folks, modernize, this is the new day dawning. Adapt or perish.

  12. The steamship has been mismanaged for years. They have been building different boats each time they need one. There isn’t any consistency in terms of parts that can be shared, or making sure that a boat isn’t top heavy so it can’t sale in windy weather. They have squandered money on a new terminal that is way over budget. I do apologize for the angry rhetoric against seasonal residents coming here. It doesn’t seem to have any bearing on the real problems of the SSA. If I lived in NY City, I would probably bring my children here. I would bring plenty of food and quarantine for 14 days. Of the 14 Covid-19 cases on this Island, I believe that only one was someone from off Island.

    • That’s what I did. I now know why Islanders didn’t want us here… it’s like an oasis compared to where I just came from. Grocery stores are in much better shape. Plenty of green space here and walking paths. You can go a whole day without seeing anyone if you prefer. Islanders don’t want to share… even though I own a house just like them… typical…

      • As part- time residents we must be sensitive to the needs of year-rounders, and appreciate the concerns with respect to local healthcare capacity, etc…”I pay my taxes” justification just doesn’t persuade those who can barely afford their rent/ food bills and owning a FIRST home here is out-of-reach. I’m not stating that you’ve made that argument, but many others have. I appreciate the safeguards you have taken with your family. 2 points I’d like to reiterate:
        (1j the angry rhetoric often expressed online is typically the rancor of a few, and not representative of the island as a whole. Local business owners depend on part-timers for their solvency. Let’s support them as much as we can…whether it be Go Fund Me contributions, frequent curbside take-out, or volunteer food delivery…maintaining these businesses and supporting the year-round community benefits us all.
        (2) when the chaos resolves and we slowly return to some sense of normalcy, island harmony must be restored…It’s why we want to be here.Lets not allow the few angry voices to tarnish what makes Martha’s Vineyard so special.

    • The SSA has been mismanaged for years because the incompetent voters in the port towns have elected incompetent officials who have appointed incompetent Governors who hire incompetent managers.
      The incompetency starts in the voting booth.

    • TQ- That one has been kicking around for a long time. I haven’t thought about in a while. All the more appropriate now. Thanks for a little humor ( I think )

      • Donx3…it WAS meant to be humorous, but you’re right, it is appropriate for the situation we are in now…I think, now, it was Marty Nadler who ”coined” this…I couldn’t remember when I posted it or I would have given him the credit

  13. When a business is unable to remain solvent in hard times by reducing frequency of operations, the problem is commonly excessive fixed costs including “featherbedding”, in the case of the SSA from top to bottom.

    • Fixed costs like maintaining staff in place for when the economy turns around?
      Fixed costs like maintaining frequency of service at reduced load factors for the convenience of Islanders?

      Where have noted “featherbedding” in the SSA from top to bottom.

  14. The incompetence of the stooges who run this critical service has been so well reported — terrible customer service, huge cost overuns, failing boats, unprecedented and historic levels of cancellations , mushrooming hiring , 100 percent increases in pricing , and most important of all?

    The governors have rated this management at almost 100% and bonused them every year for the last 5 years! Hate to see it go belly up but maybe for the best — just make sure they don’t take all the money in severance before they walk out the door — has been a boileroom operation for the last 8 years!

    • Should it be sold off the highest bidder?
      Let a real entrepreneur take it over.
      Lower the fares and improve the equality of service.
      After a few years of operation they may see that their highest return on investment will be operating 8/9 months a year.
      The very reason that the SSA exists today.

  15. So, a quick question I would ask at that meeting on Tuesday, if possible:

    What is the cost of a boat trip, one way? I don’t mean an individual ticket price, I mean the cost of the entire trip – amortization of the boat purchase, fuel, boat staff, shore staff, maintenance apportionment, administrative overhead, etc.?

    The followup question would be: For any given ferry, what would the cost of travel be for islanders, given a full (90% or more) boat, to travel on the boat by car, truck and passenger?

    You get where I’m going? What would we pay if we had to pay 100% of the cost? and, how often would the boats run, given the current demand? Seems like it would be simple math to figure out…

  16. Take a look at a steamship boat, same exact boat that travels between Vermont and New York. Price for driver and car is $30 round trip, for a 45 minute ride. Yes same amount of time as well. Somehow this boat can afford to run for this price while the same boat for the same amount of time on Martha’s Vineyard can’t even offer that for under $100. There is the problem, price gouging, 101.

    And last I read a round trip for just a person is $7.50, yes round trip. Bikes are free. Hmmmmm??

  17. Tho I am hesitant to comment or bash the SSA (as I need to run off-island occasionally to get toilet paper at Costco…) there are too many ferries, too many slips and too much excess. Period. I have rentals, so I guess I am part of the problem, but there are too many cars and visitors for this small island to handle! Maybe we need to start at the heart of this problem: excess and greed…

  18. Everyone who’s snarking about Islanders should pay are fools. The whole idea that ANY transportation system should be shut as a function of ridership or usership reduction in the time of a Pandemic is laughable. Major public transportation systems (subway/light rail/bus) are equally on life support because of their criticality despite low ridership regardless of their viability during normal times and regardless of their status as private, public, and or public-private partnerships. The costs of shuttering such systems and then re-opening them later is twice as expensive than disbursing sustaining funds ultimately, which is what will have to happen anyway. Moreover, ports across the entirety of the eastern sea board are suffering from reduced freight requirements and again, closing such ports is untenable. Both because you’d have MASSIVE economic repercussions, shortages, supply chain interruptions, critical item availability impacts etc. Same thing for interrupting trade to/from the Island. Ultimately the spillover effects will become costs to the local, state and federal governments eventually anyway. This who situation is completely unprecedented and is in no way a reflection on services or management of the SSA itself because, well, no one plans for this sh*t. Not saying SSA does or doesn’t have its own issues, but using a completely unprecedented circumstance to allow it to fail, is outrageously irresponsible.

  19. This would be a great opportunity to release the SSA monopoly on our water ways. They have been inconsistent and irresponsible, and it’s frightening to think our life-line is in their hands. The SSA is not prepared to operate to support our community in a time of need. Allowing another company to operate would serve as a reserve system, and force the SSA to step up their game. Many other comments referenced other ferry operations, and they are absolutely right, the SSA business model is horrible. Why should we allow a failing monopoly to operate at the cost of our well-being?

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