<p>With cash running low the SSA is urgently seeking a financial bailout from the commonwealth, marking a first.</p>
With cash running low — and saying its very mission is at stake — the Steamship Authority is urgently seeking a financial bailout from the commonwealth, marking a first in the modern history of the state-chartered ferry line.
Citing steep financial losses due to an unprecedented decline in ridership during the Covid-19 pandemic, the SSA announced in a press release Friday that general manager Robert Davis has sent a letter to Gov. Charlie Baker urgently requesting financial assistance.
“The Steamship Authority will not be able to meet its statutory obligations to provide for the transportation of people and goods to the Islands of Martha’s Vineyard and Nantucket beyond May 31, without financial relief,” the press release said. It also said:
“The Steamship Authority funds nearly 100 percent of its annual cost of service through its fare box collections and, unlike nearly every other public transit agency in the country, receives no annual state subsidy or funding. Although the Authority’s enabling act includes a method by which certain funding shortfalls can be assessed to the five port communities it serves at the end of each calendar year, such an assessment has not been made since 1962.
“Nor, in this case, can the Authority wait until the end of the year for aid.”
Both the press release and letter describe the steep operating losses the boat line has sustained since the coronavirus outbreak began a month ago, including traffic declines between 70 and 85 per cent, nearly $3 million in revenue that cannot be recouped, and ongoing losses of $1 million per week.
The SSA annual operating budget is around $100 million. The boat line annually carries about three million passengers, 475,000 cars and 195,000 trucks between the two Islands.
“The Authority is the lifeline for those Islands, providing the only year-round passenger, automobile and truck ferry service delivering food, medicine, fuel and numerous other consumables and products from the mainland,” Mr. Davis wrote in the letter to Governor Baker.
The four-page letter to the governor also outlines steps that have been taken to reduce costs since the pandemic began, including the elimination of some 1,400 trips, 114 employee layoffs and the suspension of seasonal hiring, which usually begins in April.
“In order for the Authority to continue to maintain safe, efficient, economical and essential ferry boat transportation to Nantucket and Martha’s Vineyard, we respectfully request the commonwealth to assist the Authority with its cash reserves in any fiscally responsible manner possible,” Mr. Davis wrote.
In the letter he goes on to outline the fact that under its enabling act, the SSA is only allowed to hold a limited amount of cash on hand to pay monthly expenses, and by law is not permitted to have a rainy day fund.
As a possible remedy, Mr. Davis suggests the Municipal Liquidity Facility — a procedure authorized by the Federal Reserve last week that allows the commonwealth to apply for eligible notes and use proceeds to manage cash flow impacts from the COVID-19 pandemic.
The request for state funding has the backing of Cape and Islands state Sen. Julian Cyr, according the press release.
“Reliable passenger and freight ferry service makes modern life possible on Martha’s Vineyard and Nantucket, Mr. Cyr said in the press release. “We must do everything we can to ensure that the Steamship Authority is able operate during the pandemic and when we are able to recover; it truly is our lifeline.”
Comments
Any bailout should require
R Scott Patterson EdgartownAny bailout should require Bob Davis to step down. Mr Davis clearly isn't able to do the job, just an endless stream of failure and incompetence.
The only way forward is to
Mark EdgartownThe only way forward is to replace the management team with new blood and align compensation and governance with operational and financial targets in the best interest of taxpayers and other stakeholders. This is ludicrous.
First of all the Woods Hole
John Cape CodFirst of all the Woods Hole ticket office project should immediately be put on hold and daily boat trips trimmed to only what is needed and secondly even if you had the absolute best Management team in place it wouldn't change the current financial situation the SSA faces. Read the article again as it says the SSA is not allowed to have a rainy day fund, therefore no backup funding is available at all to get it through this issue as it relies on it's passengers / vehicle's fee's to pay for it's operation. The State & Towns have rainy day fund's to get them through tough economic times, so why not the SSA ? Going forward into the future that should be changed with a cap on the amount held along with the proper oversight by an independent board to make sure it is used correctly. Also the Islands and port Towns will face a significant financial hit also, as in the end the charter holds them responsible for the year end deficit.
That is a most interesting
Islander TooThat is a most interesting point, one I didn't know: That the SSA is not allowed to have any rainy-day-type fund or cash account. Why is that? I have been reading about how one indicator of the financial health and prospects of companies whose shares are list on the stock market is how much cash they have on hand. The SSA, too, obviously needs to have cash on hand. So why is this not allowed? I would appreciate an explanation of this.
Stock market absolutely cares
Mark EdgartownStock market absolutely cares about how much liquidity a company has on hand and either investors or the rating agencies will penalize those that fall below accepted thresholds. Airlines, while different in some ways than the SSA had cash and available liquidity to fund needs for 2-6 months pre C-19 depending on carrier and still got hammered in the market. Not logical that the SSA is unable to carry a cash reserve.
Governor Baker's office is
Grade Incomplete Vineyard HavenGovernor Baker's office is not full of dummies. They are going to see right through several misleading parts of Mr. Davis' letter to the governor.
1. The letter omits the well publicized fact that the SSA already received a commitment of federal funds. “We are receiving money from the CARES Act, which is being distributed via the CCRTA (Cape Cod Regional Transit Authority) as the ‘designated recipient’ for Federal Transit Administration funds in the Barnstable Urbanized Area,” according to Sean Driscoll. It appears the amount will be several million dollars.
2. "Schedule reductions may be warranted, but may provide to be counter-productive for
social distancing measures as well as delaying medical transports, food, fuel and medicine deliveries." This sentence is illogical and simply false. Those boats running to the Vineyard today are on an already reduced schedule but still have more than enough spare space for all "medical transports, food, fuel and medicine." Delivery of food and fuel cannot be delayed by a few hours? If there's a medical emergency, planes are used. Why the fear-mongering language? 4. Everyone knows the SSA loses money in the winter. Davis' letter does not say a word in its letter about how summer advance sales are going. Those advance summer sales are the most relevant data points. Why is Davis' letter silent about them? 5. Davis' letter fails to mention the widely known Woods Hole terminal reconstruction price overruns that have resulted in the SSA reaching its bonding ceiling. The letter should have come clean about this issue. 6. If the SSA is losing $1M/week, why will it already be insolvent by May 31? A loss of $5-$6 million is enough to put the SSA over the edge? A 5% loss in overall annual revenue is enough to sink the Steamship Authority? Little of Mr. Davis' letter appears overly credible. The Governor's Office will see right through most of it. Grade: Incomplete.
Please will someone give the
Dan WTPlease will someone give the SSA general manger And the management team there walking papers!!
Stop building the Taj Mahal in Woods Hole... we didn’t need it in the first place...
Couldn't agree more. Doomed
Gabrielle West TisburyCouldn't agree more. Doomed from the beginning, not to mention the 750k in redesign fees...could you be more irresponsible?
Time to put a permanent lid
Laura EdgartownTime to put a permanent lid on the new WH office. No justification to continue in light of this news.
I agree Laura. What is wrong
Anne EdgartownI agree Laura. What is wrong with making the temporary building, permanent. Why spend crazy amounts of money for a building right on the water? It is a ticket office with bathrooms. Admin offices can be housed elsewhere.
Here we go. The MV MBTA
Bob EdgHere we go. The MV MBTA strikes again
Please help us keep going!!!
Joyce Schultz 11Winnecotte Avenue West Tisbury MAPlease help us keep going!!!
Ferry traffic is down 75-80%
T Bone Oak BluffsFerry traffic is down 75-80% but only 114 of 700 employees have been furloughed??? This says a lot about the weak management at the SSA. We are all in survival mode. SSA management needs to respond. This is not the Good Ship LolliPop!!!
There may well be union or
Islander TooThere may well be union or Coast Guard reasons for this maintenance of crews.
time for a bridge or tunnel!!
jane edgartowntime for a bridge or tunnel!!! We have always been told that the island residents have nothing to say about the SSA is run as it is part of the Mass. Highway System. Is it all of a sudden not part of the Mass Highway system????
The state already has a 27
thomas hodgson wtThe state already has a 27 billion dollar backlog in badly needly infrastructure repairs. Where would the 6 to 12 billion for a bridge or tunnel come from? The amount of money an MV-Cape Cod bridge would cost would be a hefty down payment on a connector between north and south station connector system, which would serve orders of magnitude more people than a bridge to the Island.
I'm surprised that no mention
Aaron JacksonI'm surprised that no mention of time to " build the bridge comments ":) in both papers
As much as I like the island home for how big it is, it's just not for us, never was, we are not like washington state instead of building bigger boats i.e. (island home & woods hole) the ssa should've made not one but two m/v islanders use the same profile from the 1950 m/v islander. streamline the pilot house,use
common controls across the board, no need for variable pitch props/wheels & both would run in windy conditions. I get it that it would have less capacity and be using more fuel per trips but having two m/v islanders would make the same round trips and be more productive and profitable
My opinion only.
I agree with you, Aaron.
If I ever get back . . .I agree with you, Aaron. Every attempt to reinvent the wheel seems to result in a worse wheel. @@
The simple Islander design should have been updated to reflect new technology,
and that boat should have set the paradigm for all new boats.
The whole "wheelhouse" discussion was idiotic.
Plenty of people knew that at the time, but SSA management didn't listen.
Same problem re the new ticket office and slip. And don't forget the new administrative office behemoth at the Palmer Avenue lot. SSA management just *wanted* these!!
They were unable to show that these new structures were really necessary. Their arguments were silly, such as that the old ramp was, "Face it, a maze." So what? It was an ADA-compliant "maze." BTW, we still have a maze or two at WH.
A-mazing!!
The "temporary" ticket office works just fine (especially with reduced traffic).
Just leave it. Kind of like the Wilhelms-Gedaechtnis-Kirche in Berlin.
As a monument to the pitfalls of hubris combined with cluelessness and refusal to listen to good advice.
Bridge comments always good
Mark EdgartownBridge comments always good for a laugh. In all seriousness the SSA needs a total revamp starting with a competent management team that is held to strict operational and financial targets. I’ll never understand the rationale for having so many different boat types in the fleet, would save massive amounts on maintenance and operating costs if the fleet was uniform.
So very sad. This virus could
Adele S EdgartownSo very sad. This virus could be the death nell for the Vineyard. Vacationers will shy away from places served only by ferries and airlines. Add the limited emergency services and it may be the perfect storm. We should be thinking about how to sustain the island without the summer influx.
How can you sustain the
Mark EdgartownHow can you sustain the island without an economy, what would replace tourism? Everything on island is unfortunately tethered to a tourism based economy.
Chicken Little! This too
Bruce Danziger EdgartownChicken Little! This too shall pass. Even if it takes a little longer than we'd like. So much overreaction.
22 million people have lost
Mark Edgartown22 million people have lost their jobs in the last four weeks and unemployment is above 10%. This took 18 months to percolate to these levels during the financial crisis in 2008/2009 and will only get worse in the coming weeks. Many will suffer both nationally and locally. Do you think summer dollars are going to flow without visitors? Even if the virus is under control this summer, how robust a season do you think MV will have in the midst of a deep recession. Let’s be real.
They should be investigated
charlie callahan so boston/edgartownThey should be investigated by the state inspector general. No group running a huge operation like that can be as stupid as they seem. They are sly like foxes. Just like the politicians where I grew up in southie
The ferry was unsafe, failing
Edgartownite EdgartownThe ferry was unsafe, failing, and inefficient before the virus hit. The best way to fix this is to open up trips to any company that wishes to provide service without the SSA being in charge. How anyone can look at what has happened since Davis took over and allow him to keep his job is incredible. He's done an even worse job than the Vineyard school superintendent who has also sat there and allowed maintenance to be ignored. To Davis' credit, however, at least he has really nice new offices to make these requests from.
So much can be said at this
Calvin Salline EDG - CTSo much can be said at this juncture, I'll be brief and just quote the Oracle of Omaha "only when the tide goes out do you discover who has been swimming naked"
The built to last bridge over
Tom HarwichThe built to last bridge over the North Humberland Strait to PEI is nearly 12 miles. They said it couldn't be done. We could certainly build a 4 mile bridge to MV, create short term jobs and eliminate the Steamship terminal and infrastructure altogether at Woods Hole.
Who is going to foot the bill
Mark EdgartownWho is going to foot the bill, that bridge cost over a billion dollars, certainly not the state. Let’s focus on fixing the SSA.
The new Tappan Zee bridge,
thomas hodgson wtThe new Tappan Zee bridge, which is half as long as what you'd need to reach MV, cost four billion bucks. Twice the distance, twice the cost, so where will you come up with eight billion dollars? Since this is Massachusetts, maybe you'd better triple that.
Tom, that bridge cost over 1
Lorraine EdgartownTom, that bridge cost over 1.3 billion dollars, completed in 1997. I took it over to PEI right after it was built. I usually always take the ferries, which Canadian ferries are immaculate, well run, very few personnel on land, the bridge showed an uptick in tourists the first few years after it was built, then the visitor count went down to the usual number that ferries had brought over, annually, before the bridge was built. I have a soft spot for islands and have made a practice of visiting as many around the world as possible, but I must say, when the bridge to PEI was built, the island lost some of its mystique for me. My opinion.
Mr Davis has received almost
Jim NycMr Davis has received almost perfect job evaluations from the SSAGovernors in the past 5 years. How is that possible in light of failing boats, construction overruns, and now claimed insolvency? Clean house if all these stories!
A bridge or tunnel would most
Res edgartownA bridge or tunnel would most likely be financed with a bond issue which would be repaid by a Toll system.
And the Dish will most likely
Bulkington EdgartownAnd the Dish will most likely run away with the Spoon.
It's common in many inept
Kelce OBIt's common in many inept organizations. Keep patting each others backs and keep kicking the can down the road. The SSA's "Perfect Storm" has been going on for years now. The state should take over the SSA and bring in new leadership ASAP.
I've been on ferries in the
James MVI've been on ferries in the Philippines a bit larger but charged six dollars one way per person for a five hour inter- island journey. Are salaries too high? Are ticket prices too low?Should the ferries be nuclear powered? How about a bridge? Rhode Island has quite a few.
SSA has been run by inept
Very Annoyed Vineyard HavenSSA has been run by inept financial people not professional business/marine people. The 90M plus project was the death nail before COVID-19. They will walk away with their pensions but we will suffer the consequences of their failure! Governor Baker should hold the SSA feet to the fire! Bad decisions equals hefty financial burden to the Islanders -- We ultimately pay for it!
I sat in the high school
Mong Mong VHI sat in the high school theater last year when there were "professionals" giving a talk about their findings of the SSA with their recommendations. This was after the fiasco of multiple boat break downs. At that time they suggested more managers and other top heavy manager control.
I left the hall with my head spinning. Many in the room had jaws dropped to the floor. Not once did these "professionals" say things like terminate, reign in, stop building, stop buying land, stop the incessant building of larger and larger vehical capacity boats, or bigger buildings, parking lots etc..
We all in our hearts know what MV needs. It is a sustainable economy. We don't need bigger and better, we don't need more cars, larger houses, more tourists that overwhelm us. There is a happy medium, this is what the MVC was supposed to help us with, not to be over run by greed water pollution, high nitrates in our ponds.....
Cut the boat runs a quarter, limit the square footage of homes. Limit the amount of cars coming to the island, encourage bikes and bike trails, with COVID19 walking has become the greatest.
So before you chase after me with pitchforks, a thought for all, when you make something inaccessible or harder to get to by sustainable control, the value goes up. If you have a good island /town(s) planning with leaders that are forward thinking and follow guide lines. This can be a better island for all. Stop the SSA from crying poor when it was they who put themselves into the stew pot!
Amazingly with the shut down of the island the following things people have noticed
Less pollution world wide
More birds songs you can hear
Less speeding cars
Life is quieter and family/neighbor oriented.
Reign in the bloated SSA.
Jane's right, Tunnel Tunnel
Islander Vineyard HavenJane's right, Tunnel Tunnel Tunnel!
The chicken have come home to
KenOB Oak BluffsThe chicken have come home to roost. Let's not reward poor management and hold them responsible.. The SSA has alway had a obese bloated budget and spent somebody' else's money like a "drunken sailor" ......time for a change!
For all those criticizing the
ZephyrFor all those criticizing the SSA, you might want to check out some other ferries. I took one across LI Sound that was a similar distance to WH to VH. The LI ferry was a rustbucket, and the waves sloshed through openings all over our cars. The passenger areas were crowded, dirty, with little in the way of amenities. Made our SSA boats and system look like the QE II in its prime. It is very easy to criticize any business when you don't run it or work in it yourself.
SSA needs a "Rainy Day" fund.
Jonathan West TisburySSA needs a "Rainy Day" fund. Legislation to allow this must pass. Call your representatives in the state house - or elect new ones. And yes, the ticket prices are artificially low. Time for MV to wake up and get busy or find some other place to cower in fear, hate and subsidies. As for summer, yes, some people will come but they won't spend big money or fund all the non-profits.
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