Updated 3 pm
At a special meeting Tuesday morning, the Steamship Authority board acknowledged a letter from the Town of Oak Bluffs that criticized the SSA for maintenance shortcomings at the Oak Bluffs terminal and demanded immediate emergency repairs to save the economy of the town. The board did not discuss the contents of the letter and only lightly touched upon the subject of terminal repairs. After an engineering inspection, the Oak Bluffs terminal was deemed unsafe for vehicles following an examination of its wooden piers and caps. Mark Amundsen, SSA director of marine operations, previously estimated the cost of repair work at $500,000. Bids went out Monday and are expected to be reviewed by the board next Tuesday.
Also on Tuesday, state legislators leaned on the governor’s office to help the Steamship Authority through its financial problems. In a press release issued Tuesday, the 12 legislators point out that the SSA is getting $12.2 million in federal assistance but will need help keep the ferries running this summer. The legislators sent a letter to Gov. Charlie Baker on Friday.
“The livelihoods of over 30,000 Island residents depend on the financial viability of the SSA,” the twelve legislators wrote in a letter sent to the Governor last Friday. “As representatives of the Islands and the port communities that serve them, we respectfully and urgently request your assistance in shoring up the SSA and ensuring that the Authority’s boats continue to set sail for the duration of the pandemic and subsequent recovery.”
The letter is signed by both state Rep. Dylan Fernandes, D-Falmouth, and state Sen. Julian Cyr, D-Truro, who both represent Martha’s Vineyard. Tuesday’s release comes after Baker said it was unclear just how much jurisdiction the state has over the ferry service, even though it was established by state legislation.
“The Steamship Authority is the lifeline for food, energy, healthcare, and other essentials for more than 30,000 Massachusetts residents and serves three million passengers annually,” Fernandes said in the release. “The pandemic has threatened the viability of this vital quasi-state government service and the residents of Martha’s Vineyard and Nantucket need the Governor’s support to ensure the boats continue to run.”
“Reliable passenger and freight ferry service makes modern life possible on Martha’s Vineyard and Nantucket,” Cyr said. “We must do everything we can to ensure that the Steamship Authority is able to operate during the pandemic and when we are able to recover; it truly is our lifeline.”
The Steamship Authority is a state-enabled public authority with an operating budget of roughly $110 million annually, according to the release. Unlike many ferry systems across the country, the SSA receives no state funding and relies on ticket sales to fund its operating costs. This funding model has allowed the SSA to operate without a deficit since its establishment in 1962, but has left the Authority vulnerable in the pandemic.
Since stay-at-home orders went into effect on the Island, the SSA has scaled back its schedule.
Oak Bluffs up in arms
Following the board meeting, Oak Bluffs selectmen chair Brian Packish told The Times that while the letter bears his signature, it’s from the whole board. He said Town Administrator Bob Whritenour drafted the letter and all the board members edited it.
“While we are aware of the much-publicized financial difficulties of the Steamship Authority as a result of the lack of ridership this spring due to the COVID-19 virus,” the letter reads in part, “this cannot be used as reasoning to abandon Oak Bluffs for the summer. This community is also suffering from the complete economic shutdown, which was required to battle the virus. Our entire seasonal economy consists of small businesses depending on the arrival of visitors to stay afloat. Most of these businesses are facing great difficulty as a result of the closures, waiting for the opportunity to reopen to salvage a portion of the upcoming season and remain viable. To use the virus as a means for closing down Oak Bluffs for the year would multiply this damage and certainly be the death-knell for so very many of our local businesses. The town would take years to recover from such a catastrophe.”
The letter indicated closing the terminal for the season is out of the question and reliance on Vineyard Haven as the sole port for the season would be an economic miscalculation and a consequential mistake.
“It is not true that visitors may be evenly distributed throughout the Island from a single point of entry,” the letter states. “Our traffic and transportation resources are stretched to the maximum limit, and we simply do not have the infrastructure to absorb all travel through a single port. The port communities of Tisbury and Oak Bluffs work together to safely accommodate visitors to the Island in a way that is beneficial to the entire Island. Removing a critical link in this transportation network does irreparable harm to both communities. It is difficult enough that the pier repairs will extend our shut-down until the middle of June, but it will kill our town to close for the entire year.”
Packish, who listened to the meeting, later could barely hold back his disgust at the state of the Oak Bluffs terminal during an interview with The Times. He called it “appalling” the SSA hadn’t executed the repairs on the terminal sooner. But he said he was unsurprised the ferry line could be so reckless with the Oak Bluffs economy “especially in light of all the squandering they’re famous for.”
New Bedford representative Moira Tierney raised both the Oak Bluffs terminal and the subject of upper tier managerial pay cuts as areas the ferry line needed to look at in order to staunch its losses. She said she did not see enough effort in these areas from fellow board members.
“I happen to think we as a board are not focusing on the severe financial difficulty that we’re in,” she said “We’re in tough shape. It seems to me that our cost-cutting measures do not rise to the level to reflect the tough financial position that we’re in.”
Tierney pointed out the Baker Administration appears unlikely to aid the ferry line.
“The governor yesterday seemed to think that the Steamship Authority wasn’t his problem,” she said.
While she and chair Jim Malkin were in accord about the necessity of a new business plan to manage a potentially poor ridership recovery, one that could regress SSA economics back to “say the ‘70’s,” Malkin said they differed on the value of salary cuts for lead managers. Malkin said he and other board members have received employee letters that deem the subject “destabilizing and concerning.”
Tierney was unmoved. “I think we should employ any and every cost-saving technique that we can,” she said.
The board took no action on either the Oak Bluffs terminal or managerial pay.
General manager Bob Davis reminded the board the ferry line was losing $1 million per week.
“Is it $1 million or $1.5 million,” Tierney asked him.
Davis replied that lost revenue amounts to $1 million per week but weekly “disbursements” are $1.5 million.
Malkin didn’t find Davis’s answer to be entirely clear.
“What is our weekly cash burn rate? Is it $1 million or $1.5 million?” he asked.
“Closer to $1.5 million, on average,” Davis said.
There were a few economic positive notes during the meeting.
Davis told the board there had been a small uptick in contractor passengers and building material freight since the very recent rollback of some of the local construction moratorium restrictions. In a follow up to a previous board request that he tweak terms on a $10 million line of credit deal with Cape Cod Five, SSA Treasurer Mark Rozum told the board he was working with a different bank instead and expected to have something to share next week.