A proposal to raise the bond borrowing limit for the Steamship Authority by 50 percent has passed the Senate and the House of Representatives, local lawmakers say.
The $50 million boost to the Steamship’s borrowing limit of $100 million had initially been proposed in a bill filed earlier this year by State Sen. Julian Cyr, and was passed Monday, along with the state’s budget for fiscal year 2024. Gov. Maura Healy is expected to sign off on the budget within the next few weeks.
The borrowing limit is what, under law, the Steamship Authority is able to borrow in order to finance capital projects, new vessels, and any other future expenditures.
The new limit of $150 million will provide the agency “the capacity to invest in a reliable fleet, and to safeguard each island’s economic livelihood” by way of new vessels and terminal improvements, Sen. Cyr told The Times Wednesday, noting that the additional borrowed funds can also aid in the process of eventually decarbonizing.
While the primary need for the increase is to fund the Steamship’s purchase and conversion of a fourth vessel, it’s also meant to bring uniformity to its fleet, Cyr said.
Because each of the agency’s current vessels has a completely different configuration, the Steamship Authority is often faced with challenges when it comes to swapping out boats for maintenance or operational reasons, Cyr said.
Additionally, Cyr said, the bond raise allows more funding for terminal-related projects, like ongoing portwork.
The Steamship Authority’s current bond limit under statute is $100 million. It was last raised in 2014 from $75 million.
As of March, the Steamship Authority had $58,230,000 in bonds and $33,000,000 in anticipation notes, totaling $91,230,000, Cyr said in a May statement.
The current remaining borrowing capacity of $8,770,000 is insufficient to fund some necessary projects, Cyr’s office had said. Increasing the limit would provide the Steamship Authority the ability to cover a number of anticipated costs, including the acquisition and conversion of a new ferry.
To modernize its fleet, the Steamship Authority has already purchased three identical freight vessels, with the option to purchase a fourth vessel. That fourth purchase would have been impossible without increasing the bond borrowing limit, Cyr said.
The Barnstable, formerly the HOS North Star, was purchased in November for $5.6 million, with support from the Cape Cod Regional Transit Authority (CCRTA). It will replace the aging Sankaty.
Two other sister ship freight vessels — now called the Aquinnah and Monomoy — were purchased for a little over $11 million back in September, and will serve as replacements for the Katama and Gay Head.
But escalating costs, largely due to inflation, for retrofitting the freight vessels and other needed capital improvements have presented challenges.
The cost to retrofit the vessels has been quoted to be much higher than anticipated — roughly $15 million dollars per vessel.
Cyr also noted that pushing toward SSA’s decarbonization, “albeit existing vessels or new vessels,” is essential; plans for this may also be aided by upping the funds SSA can borrow. “Both Rep. [Dylan] Fernandes and I have been pretty persistent that we want to see the Steamship Authority pursue electrification,” he said.
SSA spokesperson Sean Driscoll told The Times that increasing the bond limit was seen as “a crucial step” in being able to undertake several pending and planned capital projects. Although the limit raise isn’t official until Gov. Healy signs the FY24 budget, Driscoll said the agency is “pleased that [the increase] was included in the budget, and agreed upon by the legislature.”
Electrification of the fleet is ridiculous. There’s no reason for it and it will cost hard working islanders a boat load of money. It’s too bad we don’t have state representatives who actually live on the islands and understand the folly of such an endeavor.
John– every single company in every country that runs ferry services has verifiable economic numbers that unequivocally, absolutely , without a doubt show that electric ferries save money.
I would be very interested to read ANY verifiable statistics that you may be able to produce that shows ANY ferry service that has not seen a reduction in their costs after converting to electric ferries. Show us just one–that’s all I am asking John — show us one instance , anywhere in the world where the accountants and the balance sheets indicate that electrification has not saved the ferry services involved significant amounts of money.
Please== don’t give us a Newsmax or Fox opinion piece—
And may I remind you that our representatives live in an area that includes Woods Hole Falmouth and Hyannis. Do you really think that the concerns of the people in Falmouth, Woods Hole and Hyannis don’t matter? Do you think they are not affected by the “folly” of the SSA ?
I would speculate that if you lived in one of those towns and Fernandes lived on one of the islands, you would wine about that.
Keller you are dismissing Capital costs and subsidies. Expenses may be lower years from now but the overall cost is greater.
Please explain the folly of such an endeavor to use.
That’s the hard part, stick with buzz words, we all understand them.
Amen, brother!
If the mission of the steamship is to get people and goods to the islands in the safest and most economical way, this endeavor is a breach of that mission and a violation of the directors fiduciary duty to the people who the organization was created to benefit: the islanders.
The so called environmentalist of the island should keep their mouths shut about this move to electrify, unless they are willing to march down to the Congo and mine cobalt beside the children in the pit mines. Please people, google Congo pit mines before you reply.
Brother Bill, the future will be electric. Look at the Washington State Ferries.
“unless they are willing to march down to the Congo and mine cobalt beside the children in the pit mines.” In five years there will be very little cobalt in EV batteries. Toyota is telling us that in 2025 they will have mid-size SUV with 740 mile range using solid state batteries. Do you remember the panic over over mining the components in a nickel metal hydride batteries for electric drills?
The “organization” was NOT created to benefit: the islanders.”!
The SSA was created by the State of Massachusetts when private ferries failed to provide adequate year around service. It was not created for Islander’s. It was created for all people who want to travel to and from the islands.
You can see one of the people responsible for the the current SSA debacle in your bathroom mirror. We the people of of Dukes, Nantucket and Barnstable Counties elect the County Commissioners who appoint the Board of Governors who the hire the Management.
The Cape want’s their Representative to live on Cape.
Should the Island have it’s on Representative?
How about Nantucket?
What about Gosnold?
Should the SSA serve all of the islands in Nantucket and and Dukes Counties?
There is only one ferry to Cuttyhunk, no cars.
Sure why not ?
You max out your credit card, and then ask for a credit limit increase to cover what you really want to buy.
No matter that interest rates are high right now, they can just pass those interest charges on to the people who use the ferry— Capitalism at it’s best.
And icing on the cake to claim that some of it will go to electrifying the fleet– sometime in the future — they wanna go right, but not right now… That’s a great way to dupe the “climate alarmist” who want some carbon reduction….
What are they buying that they do not need?
If they need it should it come from borrowing or increased fares?
The SSA should be run on a cash only basis, if they don’t have enough cash on hand to buy what they need they need to raise their rates.
This is not good news. The Steamship will borrow right up to its limit, and we will continue to pay and have outrageous fees for getting to and from our homes.
Some people just have to grouse , they need a job.
The good news is that the SSA fares are lower than Washington State Ferries.
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