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.”
