Amidst crisis, O.B. terminal bids authorized

SSA due $12 million from feds while ‘burning’ $1 million per week in fiscal crisis.

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The Steamship Authority board met remotely Tuesday and approved repairs to the Oak Bluffs pier.

Updated April 22

Despite red ink predictions severe enough to cripple its entire fleet, the Steamship Authority thus far plans to move forward with $500,000 in repair work on the Oak Bluffs terminal following extensive board debate and hardline advocacy to undertake the project by chair Jim Malkin. 

At a virtual meeting Tuesday, the SSA board also voted unanimously to enter into  memorandums of understanding with the Cape Cod Regional Transit Authority in order to receive $12 million in federal transportation relief, including $9.8 million from the CARES Act. Mark Amundsen, director of marine operations, told the board that in addition to deck work, the drive on pier at the Oak Bluffs terminal required 35 pilings replaced and 300 linear feet of southern yellow pine caps or crossmembers in order to be safe. He calculated the work at approximately $500,000 and estimated the earliest the work could be finished was June 22 — a week longer than a previous estimate of June 15. Bids are due May 7 and the award will be handed out the same day, he said. 

Amundsen said the material cost of the pilings and caps totaled $52,000, with the pilings taking three weeks to deliver and the caps “five to six weeks.”

“Where would we get that money,” New Bedford board member Moira Tierney asked.

“That’s a good question,” general manager Bob Davis replied. Davis suggested the SSA may be able to use funds expected from the U.S. Department of Transportation. 

Davis noted sections of the pier aren’t safe for cars, let alone trucks presently.

When details of the pier problems at the Oak Bluffs terminal emerged last week, Oak Bluffs selectmen chair Brian Packish was so incensed that he called on Davis to be fired. Criticism of Davis and his leadership relative to the terminal’s condition wasn’t leveled during the meeting, though the usefulness of adding a chief operating officer, per the HMS consulting report, was deliberated without any decisions reached. Davis received praise from Tierney for his performance overall.

“We recognize that you’ve done yeoman’s duty on so many different levels to keep us operational, and you’ve kept your sense of humor and you’ve kept your team in place, so thank you,” she said. 

Of the HMS report and recommendations overall, Davis said he suspended work with Glosten Associates, a contributor to that report who’d been hired to help facilitate the implementation process. He said he made the move in light of the pandemic and in order to save money. 

Regarding the Oak Bluffs terminal, Tierney asked if the pier was safe for foot traffic. Upon learning it was, she suggested the repair project be deferred and only passenger traffic be allowed through the terminal.

Davis deemed that an inefficient use of ferries. Tierney pressed Davis to give a recommendation on how to proceed. Davis took a diplomatic stance and said he could see both pros and cons to acting now or delaying. 

“The Oak Bluffs facility is one of our gateways in,” Malkin said. He added that unlike a private business, it was the SSA’s statutory obligation to maintain service to the Vineyard and that it would be a hardship on Oak Bluffs to be without the terminal and it would further the already “detrimental” traffic situation in Vineyard Haven, especially truck-wise. He went on to say even though the SSA was “burning” through $1 million “everytime we turn around,” which he later specified as weekly, $500,000 was an acceptable cost to pay for getting the terminal back on line. 

Tierney was strongly opposed to the idea. 

“We know it’s not going to be $500,000,” she said. “We know that. I mean every project we touch is over what we budget for. Every project.”

Hardships the Vineyard may face aside, she said the “foremost responsibility is to the financial stability of the Steamship Authority so that we can provide goods and services to both islands. So our financial stability is of the utmost importance. We don’t know where we stand with the governor vis-a-vis the letter [Davis] just sent.”

The Vineyard can still receive goods, services, and people right now, she argued and said it would be a “horrible use of funds” during such a fiscal crisis. 

“I think it’s financial suicide,” she said. “We need to preserve all the cash that we have for regular, general working capital.”

Nantucket representative Robert Ranney said the longer maintenance is deferred in Oak Bluffs, the more costly the work is likely to be going forward. And though it costs roughly $140,000 per month to run the terminal, Ranney expected that would be recouped from terminal traffic. He admitted he couldn’t fathom why travelers might pick one terminal over the other when traveling to the Vineyard.

“There’s only about three miles between the two terminals,” Tierney said. “I’m not saying the Oak Bluffs terminal isn’t important to us. It’s clearly important to us. I’m just not sure it’s important to us right now in light of our current cash crunch.”

“We have a large business community that depends on people coming off that ferry in Oak Bluffs,” Malkin said. He added that the SSA makes “most of its profit” off passengers and Oak Bluffs receives heavy daytripper passenger volume. 

Falmouth representative Kathryn Wilson reiterated Tierney’s point that the terminals are just three miles apart.

“Whenever I’ve gone over with the kids it really doesn’t matter which town we go to first or which town we leave to come back [home] because they are so close together,” she said. Speaking on behalf of a community that has long railed against the number of vehicles that pass through en route to the Vineyard, especially trucks, Wilson pointed out while traffic may normally get divvied up between two Vineyard ports, it hails from the single port in Woods Hole. 

“I’d also point out that everything that arrives in both of those two ports, goes through one port so we understand what it’s like to be congested,” she said. “It’s all coming through Woods Hole and then diverging to two ports.”

“The issue of truck congestion in the Five Corner area is a huge issue for the entire Island economy,” Malkin said. “I had thought you could separate it out, to Kathryn’s point. One port, that’s what they’re dealing with — one port, we should be able to do that. I can’t see a way that that works for this Island.”

Wilson went on to suggest sending out a request for bids but then evaluating whether to proceed with the project further down the road. 

Davis said by the end of the week engineering documents will be in hand enabling bid packets to be released to 14 different contractors. By May 7, as Amundsen said, bids should be received, he said. 

“At that point we could choose not to open them or choose to open them but differ awarding of the contract based on the price,” he said. He noted some choices could leave the SSA out the cost of materials but with no project underway. 

Malkin asked if the materials could be stockpiled and Davis confirmed they could be. 

Tierney argued nothing should be done until Gov. Baker reveals what degree of help the ferry line will receive.

“I have a problem not putting this out to bid for two reasons,” Malkin said. “One is, I think, just in terms of business efficiency. And the second is if the Steamship Authority starts giving a message that says we can’t operate and serve you the way that we’ve normally served you, I think that becomes a self-fulfilling prophecy that says to people, why would we go to the Islands?”

“We’ve already given that message,” Tierney said. She asked Malkin if he’d read the letter to the governor. 

Barnstable representative Robert Jones said because springtime ridership is expected to remain low, it’s a good time to do the project. He agreed with Ranney that problems at the terminal will only exacerbate and grow more expensive if the project is delayed. Jones moved for a vote to authorize acquisition of materials and dispersal of bid packets. Tierney said no such vote appeared on the agenda and therefore it would be flawed procedure to move forward with one. Davis agreed and said it would be proper to wait until May 7 or 8 for a vote. The board took no further action. 

As part of an ongoing relationship with the Cape Cod regional Transit Authority (CCRTA) the SSA receives funding from Federal Transit Administration, a division of the U.S. Department of Transportation. The funding is based on a calculation of ferry and bus traffic and ridership. 

CCRT, as the designated area recipient for such funds, delivers the ferry line its allotment annually. This year that amounted to $2.4 million. Thomas Cahir, executive director of CCRTA, waived the prearranged cut his transit agency usually takes from the SSA’s normal disbursement, otherwise the figure would have been $1.2 million. Per the CARES Act, the SSA is due an additional $9.8 million. 

“Within three to five weeks you should be able to expect those resources,” Cahir told the board. 

Without being in the program with CCRT, Davis said it was unlikely the SSA would have gotten CARES Act funds. Transit agencies that don’t rely heavily on farebox revenue have been treated disproportionately better under the CARES Act, Davis said, landing two or three their annual operating expenses whereas the SSA will receive one-twelth of its annual operating expense. The board thanked Cahir and voted in the funding MOUs with CCRT. 

In other business Davis pitched a temporary change to the SSA policy and procedures handbook so folks who are unsure they’ll keep their reservations this season can reschedule them for later. The change bumps the validity of a reservation from one year to two years. At the start of 2021, the policy would revert back to one year. 

“We feel there’s a need a need for an amendment to the current cancellation policy that would afford the traveling public more flexibility with their future travel plans and giving them more options,” he said.

“I don’t honestly see the need for it — two years is a long time,” Jones said. 

Despite his reservations, Jones joined the board in a unanimous vote to approve the temporary change. 

The board delayed a vote on a $10 million line of credit from Cape Cod Five until the terms of the loan agreement could be tweaked more favorably. The board agreed to meet weekly as opposed to monthly in light of the ferry line’s fiscal woes. After consensus proved elusive, the board delayed any action on managerial pay cuts until Tuesday, when they plan to convene again. The board learned the MV Iyanough, which is expected to enter service shortly, tallied $247,858 in change orders on a $437,050 service contract with Fairhaven Shipyard. Amundsen said the change orders were for jet work and “cracks in shell plating” that couldn’t have been anticipated. He also said the SSA is in the process of negotiating with the U.S. Coast Guard for an extension on mandatory drydock work slated for the MV Katama in June. Amundsen also said he reached out to Senesco Marine on April 13 to seek “alternate payment terms of up to one year” on the drydock contract. He added, “we’ve not heard a response to date.” 

Ahead of twice voting 3-2 to approve $532,000 worth of change orders for the Woods Hole Reconstruction Project, the board fell into fervent discussion over the breadth and cost of change orders thus far paid to general contractor J. Cashman Inc. Tierney and Wilson were the dissenting votes. Despite a call for an independent review of Cashman change orders by Tierney, the board took no action beyond the votes.  

Updated to include an additional $2.4 million to be distributed via CCRTA and to include further details from the meeting.