Dukes County Commissioners heard a report from Steamship Authority (SSA) board chair Jim Malkin regarding the recent proposed fare increases.
Malkin started by providing context in the way of ferry usage, saying that in September, passenger numbers were down 15 percent, cars were up 11 percent, and trucks were down 4 percent.
In October, Malkin said, passenger numbers were down 5 percent, cars were up 39 percent, and trucks were up 16 percent.
The current year-to-date numbers through September show passenger traffic down 37 percent, cars down 17 percent, and trucks down 17 percent.
Malkin said the current estimated operating deficit for the SSA is $10 million to $12.5 million.
Additionally, he said, there were 576 mechanical cancellations in January through August of 2018, 10 mechanical cancellations in 2019, and 12 in 2020.
The SSA, according to Malkin, is not allowed under its enabling legislation to present a budget that is at an operating loss, and is encouraged to have a budget with a $7 million or $8 million operating profit, so as to provide an extra two months of cash for the ferry’s needs.
Excursion customers are looking at a $2.50 increase and $3.50 increase during the peak season eah way. The rate increases are across the board for day-trip passengers, commuters, and vehicles, as well. They still have to be approved by the port council and the SSA board.
One thing the SSA looked at to reduce costs is whether the number of boat staff exceeds the U.S. Coast Guard minimum.
“The majority of the vessels other than the older freight boats are at Coast Guard minimums. The other freight boats have a chief engineer that we felt, for operation and maintenance, that keeping that position is important,” Malkin said.
Commissioner Christine Todd said she understands the need to go beyond the Coast Guard requirement for older boats that have a higher propensity for mechanical issues, but asked what that translates to, number-wise. Malkin said he would have those numbers available for the commission soon.
He added that there are some maintenance projects that could be done that, in the opinion of director of marine operations Mark Amundsen, could be put off, and the boats would still be able to operate safely.
“I can’t tell you exactly what they were. If there was any question about whether those were necessary, we would keep those in the budget. If we start doing better than projected, we could put those online and cover the costs with better-than-expected revenues,” Malkin said.
Commissioner Keith Chatinover said the SSA is not just important to residents and visitors of Martha’s Vineyard, it is important for the entire state.
“Was there a thought to perhaps keeping rates down and accepting state aid?” he asked.
Malkin called the process of working with the House and Senate committee to get support for the SSA a “labyrinthine and torturous process,” and said it was a concern for them that if they bailed out the SSA from its operating loss, there would be a lack of rigor in operations management to control costs, “and the state money would be seen as a slush bucket.”
He added that the way to get state funding was to agree that should there be an operating loss, the state would cover it at that time.
But Chatinover said he would rather have that gap for the fiscal year covered collectively by Massachusetts taxpayers, rather than be footed by ferrygoers through a rate hike.
Todd said she wonders how many people are using the excursion program, and whether there has been a significant increase in the number of people applying for the reduced rate.
Malkin said he is trying to acquire hard data that will show whether the year-round population of the Island has increased.
Commissioner Don Leopold said he spoke with Kevin Oliver, owner of MV Trash, who said he is currently running approximately 2½ times more trash than he would in a regular October.
“It would seem that is a pretty good indicator of how many people there are in their houses here,” Leopold said.
Malkin said he would compile specific figures regarding excess staffing numbers, and what maintenance projects are on the horizon, and which ones can be put off.
In other business, the county approved its fiscal year 2022 budget, which will then go to the County Advisory Board for final approval. The county general government budget saw an overall decrease from 2021 to 2022, with projected revenues decreasing from approximately $1.74 million to $1.7 million, and projected expenses decreasing from approximately $1.74 million to around $1.7 million.
Before finalizing the budget, questions were raised about the unfunded other post-employment benefits (OPEB) liability between the county, the Martha’s Vineyard Airport, and the county retirement fund.
Commissioners discussed the possibility of acquiring a cost projection schedule that would determine how much the county would have to fund each year to pay down the liability within the next 30 years.
County treasurer Ann Metcalf said the cost for the projection schedule from KMS Actuaries Inc. would be $500. Currently, the county has a total unfunded OPEB liability of $11 million, with $6.3 million of that being the airport’s liability, $3.1 million being the county, and $276,000 being for senior services and county retirement. Vineyard Health Care also makes up around $235,000 of that liability.
County manager Martina Thornton suggested holding off on the cost projection, because whatever recommendation the county receives from the actuary, it “would be significantly higher than what we can put into the budget right now,” she said. “It would be wiser to have an agreement with the [county advisory board] that if there is any surplus due to unexpected revenues, the extra money would go toward OPEB. After you spend the $500, you will get a recommendation to put $100,000 in. We should wait a couple more years and see how COVID affects our financial situation.” Commissioner Leon Brathwaite made a motion to expend the $500 for the projection, but that motion failed in a tie vote.