The decision by the Steamship Authority to seek a financial bailout from the state came together hastily in the span of a few short days late last week, the Vineyard SSA governor and general manager both said over the weekend.

In separate telephone interviews with the Gazette Saturday, Vineyard governor James Malkin and general manager Robert Davis described the events that led to the letter that went out to Gov. Charlie Baker Friday urgently requesting emergency funding from the state. Signed by Mr. Davis, the letter said among other things that due to the pandemic emergency the boat line is losing $1 million per week and will be out of money by May 31.

On Saturday Mr. Malkin, Mr, Davis and communications director Sean Driscoll, who joined the telephone interview with the general manager, all said a catastrophic alignment of events — including a delay of funding from the federal CARES act, conflicting information from liaisons on Beacon Hill, and a precipitous decline in revenues — caused a tenuous but manageable financial situation to rapidly snowball into a full-blown emergency.

They also said ferry service will not come to a halt on May 31, but that it was important to put all information in front of the public in the name of transparency.

“We are trying to be as transparent as possible,” Mr. Davis said

“We have every belief that we will find a solution to this,” Mr. Driscoll said.

“It’s my intention that we will have service,” Mr. Malkin said. “The question is what kind of service, and how much service.”

Mr. Davis explained the trifecta of events that led to the letter to Governor Baker.

He said the boat line had learned recently that it would qualify to receive some $9.8 million in transportation money from the federal CARES Act that would come through the Cape Cod Regional Transit Authority.

But he said it would take six to eight weeks to secure the money.

Also at the board of governors meeting in March, the board had authorized Mr. Davis to seek a $10 million line of credit, but the approvals were not fully in place. “We didn’t have a definitive commitment from a bank yet in terms of what we were going to be able to get,” he said.

Then on April 9 a third funding prospect arose when Mr. Davis learned about a program the Federal Reserve has begun called the Municipal Liquidity Facility program. “As we looked into it our understanding was that this was a program with funds that we could gain access to, but it is requiring the commonwealth to apply for us. It is not something that we can directly apply for,” he said.

Mr. Davis said he had extensive communications with state bureaucrats and legislators, including at Mass DOT and with the Cape and Islands delegation on Beacon Hill, about applying for the program.

The initial plan was to ask the board at its monthly meeting this Tuesday for permission to explore the new program, he said.

Then suddenly time ran short.

“We started getting some conflicting reports that the commonwealth needed to apply for those funds before the board meeting would be happening. And as we looked at what our cash flows were . . . we became concerned that we would be getting to a point where we wouldn’t have a lot of cash on hand because the CARES act money wouldn’t be coming until the middle or end of June — and at that point we still hadn’t gotten a commitment from a bank on a line of credit.” He continued:

“We wanted to make sure that the state was aware of our needs when they would go to apply for [the Federal Reserve] monies, so we would be included . . . in that ask.”

He said it was decided Thursday to send the letter to Governor Baker, and the five SSA governors were informed.
“The decision to send the letter was Thursday night. But we had been working on it for several days before,” Mr. Driscoll clarified.

One day earlier, Mr. Malkin had appeared before the Dukes County Commission late in the afternoon to smooth ruffled feathers in a political spat over repairs to the Oak Bluffs terminal. Mr. Malkin and Mr. Davis had both told Oak Bluffs town officials in a conference call the previous week that the terminal might not be able to reopen in time for summer. But at the Wednesday county commission meeting, Mr. Malkin amended that position. Promising a “quick fix,” he said he had consulted with management and believed the repair work could go out to bid quickly and be finished in time for the Oak Bluffs terminal to reopen by June 15.

Speaking to the Gazette Saturday, Mr. Malkin, who is chairman of the board, said when he appeared before the county commission Wednesday, he knew nothing about the letter to the governor and press release that would go out Friday.

“I had not been made aware of the cash burn and the date of May 31st at the time,” Mr. Malkin said.

But he said once he learned of the situation he and other board members agreed to approve the letter.

“Given the urgency of the situation, the decision was taken to formally explore additional funding from the state,” Mr. Malkin said. “Given the terrible state of advance bookings, and cash drain, rather than calling a meeting with the amount of time for a required meeting notice, a letter was drafted by the general manager and the Steamship Authority counsel and was reviewed by all of the five steamship board members, and was authorized to be sent to the governor.”

Mr. Davis said he has been in frequent communication with state officials in recent weeks.

“We are, and we recognize that we are one of the few transit agencies in the state and the country that is fully dependent on our fare box,” he said.

“So I’ve been trying to stress, and MassDOT is aware of it, our unique situation here and the critical service that we provide to the Islands. Food, fuel and medicine goes through us, and how important it is for us to keep going.”

He said too that he has been in frequent contact with his board.

“That’s been a daily communication I’ve had with the governors,” he said.

The plea to the state for financial assistance marks a first in the modern history of the boat line, which has not run a deficit since 1962. Mr Davis said he did not come to the decision lightly.

“There is some pride in that we haven’t had to go back to the state since 1962, 58 years,” he said. “But we also realize we have an obligation to make sure the Islands maintain service. We didn’t want to get to a point where all of a sudden, it was like, monies aren’t here. What do we do?”

Mr. Malkin said discussion about the ongoing emergency will continue at the monthly board meeting Tuesday, which begins at 10 a.m. and will be held by teleconference. It will be Mr. Malkin’s second meeting; he was appointed to the post in February.

“Here is the message I want to convey,” he said. “All of this stuff wraps into the following: we are having difficulty financially because of Covid, and because of travel. We in the traveling public are following the governor’s orders. As he and his experts begin to allow more travel, the steamship intends to be there for everyone who intends to come and go from the Island. If that means getting the Oak Bluffs terminal ready, fine. If that means applying for money, fine. We want to get to the point where when the experts say, we can allow more travel, we are able to service the Islands, and will continue to service the Islands.”