The Steamship Authority is proposing significant, across-the-board rate hikes in an effort to cover expected losses in revenue and budget shortfalls during the 2021 operating season.
The Steamship Authority is proposing significant, across-the-board rate hikes in an effort to cover expected losses in revenue and budget shortfalls during the 2021 operating season.
At a port council meeting Wednesday morning, SSA treasurer Mark Rozum announced the proposed rate adjustments, which include at least a seven per cent increase in almost all vehicle fares. Standard fare rates would go up $4 to $6 each way in the off season, while peak summer weekend rates would increase $15, from the current $100 fare to $115 on the Vineyard route.
The increases also included hikes in parking fees of $50 per year and a passenger rate increase of $1, during both the summer and off season. Excursion rates would go up between $2.50 and $3.50 depending on the season, and the cost of commuter books would go up as well.
“Audible sigh,” one of the port council members said after hearing the news.
Mr. Rozum said due to a drop in revenue that can be traced to the peak of the pandemic this spring and into early summer, the boat line will have to make up some $8 million in lost fares, about $5 million of which would have to come from the Vineyard route. The fare increases were reflected in the proposed $112 million 2021 operating budget, which Mr. Rozum also presented Wednesday to the port council.
The full boat line board will take up the proposed fare hikes and budget at its meeting Oct. 20. A vote will be planned for November. If approved, the fare increases will take effect Jan. 1, 2021.
But Wednesday’s port council meeting served as a preview of the hard decisions that lie ahead.
“It’s really, month after month, the passenger ridership that is very soft that is driving these proposed rate increases,” Mr. Rozum told the council.
While rate adjustments are not unusual, the proposed increases this year are larger than in years past and reflect the economic instabilities that are affecting many businesses due to the pandemic. Until this year the SSA has operated comfortably in the black for some six decades without state and federal subsidy.
But facing a $15 million operating deficit after traffic crashed this spring, boat line leaders reached out to state lawmakers for help. A temporary amendment in the state budget passed over the summer relieved the five port communities from the liability of covering a budget shortfall this year, leaving the state with the responsibility to cover the losses — a one-time fix that is unlikely to be repeated.
On Wednesday Mr. Davis and Mr. Rozum pointed to the fact that passenger traffic has fallen off a cliff while vehicle traffic, which also saw steep declines from March through May, returned to robust levels once summer got under way.
“The issue that we’ve been seeing here, since the springtime, is . . . the fact that we are running an operating schedule based on vehicle demand,” Mr. Davis said. “And the passengers, whether they come or not, are still needing by and large to run that same service because of the vehicle demand. So it highlights that we need to be looking at a model where the vehicles are picking up a little higher percentage of the cost of that service.”
The proposed 2021 operating budget was prepared based on a pre-pandemic period running from March 1, 2019 to Feb. 29, 2020, and assumes that passenger ridership will be at 90 per cent of those numbers during the 2021 year, while vehicle ridership will be at 100 per cent. Operating costs are expected to increase one per cent.
“That’s a forecast,” Mr. Rozum said. “That’s something we are going to monitor between now and next month for the final month of the budget. If the budget was put together three months ago, that number, or all these numbers, would be significantly lower.”
Projected operating revenue of about $112 million in 2021 represents a $5.7 million decrease over the 2020 budget, and a net operating loss of about $1.4 million, tracked primarily to steep drops in expected passenger and parking revenue of about 14 and 19 per cent respectively.
Because the SSA normally operates with an expected $7 million surplus, Mr. Rozum said the boat line would have to make up about $8 million in rate adjustments to balance the budget, leading to the need for the seven per cent across-the-board increase in fares.
“The biggest thing this year was the massive loss in passenger revenue which was offsetting vehicle prices in the past,” Mr. Davis said. “It’s a little bit more than what we had looked for last year.”
Along with the $15 increase in peak weekend vehicle fares and the $4 to $6 increase in off-season standard fares, summer excursion fares will go up $3.50 and an off-season excursion fares will increase $2.50. The 10-ride coupon book prices will go up $60, and all vehicles longer than 20 feet in overall length would see a seven per cent rate hike.
Commuter passenger book prices will also increase, with the 10-ride passenger book increasing by $8 and the 46-ride commuter book increased by $17.
Even larger increases are proposed for the Nantucket route.
SSA spokesman Sean Driscoll said the bulk of the increase will come from peak-season vehicle fares through the $15 one-way increase to Friday, Saturday and Sunday summer travel. The increase will widen the price difference between weekday and weekend travel from $10 to $20.
“We went higher than that on purpose, because that’s the whole point of that rate category,” Mr. Driscoll said. “The gap is widening.”
While some Nantucket port council representatives expressed concern about the fare hikes, noting at one point that it was cheaper to fly to Florida than to go on the fast ferry, there was broad recognition that adjustments were necessary.
“The back-to-back pretty significant increases is notable,” said council chairman Ed Washburn. “But this is sort of the reality we are in.”
Mr. Davis said he expected to see public comment from the port towns throughout the process.
“We don’t take this lightly,” he said.
Comments
I saw no talk of cutting back
T Bone Oak BluffsI saw no talk of cutting back on expenses.
Cut backs? They have no clue
BH EdgartownCut backs? They have no clue what that means....
So there's no rainy day fund.
Gabrielle West TisburySo there's no rainy day fund...what about the 750k spent on "redesigning" the new woods hole terminal...seriously there has to be some accountability.
They followed the business
Vasha Brunelle Vineyard HavenThey followed the business model of anticipating tourist revenues which, sooner or later, becomes unsustainable, being vunerable to disruption for lots of reasons.
Build a bridge. They have us
Blythe OBBuild a bridge. They have us in their pocket, they’re our only option.
Where are the billions of
Mark EdgartownWhere are the billions of dollars going to come from to fund the project? Let's focus on pragmatic reform for the SSA...
Instead of trying to make up
BL VHInstead of trying to make up the loss in one big hit.... Try going at it through a step
Process through a few years. Or take a loss / hit. Just like every other business has done this year...
Heaven forbid SSA management
Lost poetHeaven forbid SSA management should take a pay cut. If fares go up, All SSA boats should be sparkling Clean All the time.
I thought the state was
Ken Edg.I thought the state was helping with the covid losses. Lets face it the virus has caused huge losses. There shouldnt be any increases, few can afford them. Most trips are for health visits during the off season and car care appointments. Seniors have to make dozens of trips for procedures. Something should be done.
How about having standby all
Mark EdgartownHow about having standby all year. The more traffic the more money. No standby travel during the summer makes no sense.
Why not stop the expansion of
Ted OBWhy not stop the expansion of this building in WH for starters? There is no need for it...boggles my mind to build such a big building???
It’s time for businesses to
Paulli D EdgartownIt’s time for businesses to face the new reality of reduced customers until the COVID challenge is overcome. What that means is that you have to reduce spending including people and assets to accommodate the demand that you have now. So if you have to park some ferry’s until demand returns then do it. If the island people don’t want a reduced schedule, then you have to pay for running empty ferry’s with a crew size required by the Coast Guard. There are choices, hard one, but make one and move on.
The crew size demanded by the
William EdgThe crew size demanded by the union is larger than the crew size required by the Coast Guard.
How about we cut the salaries
R Scott Patterson EdgartownHow about we cut the salaries of all the SSA executives by at least 50% first? Then we can have a discussion of rate hikes.
"So, let's increase fairs for
Vineyarder61 OB"So, let's increase fairs for everyone in the middle of a pandemic." What make the SSA think they are the only ones hit by the pandemic? Why increase the annual parking fees in Falmouth? These are Vineyarders who use this service, many who have to leave a vehicle unused for much of the year just to avoid paying the outragous SSA car fees, that's a 7.5% increase. It is time for the SSA to look at islander rates in all aspects of their fee structure and these should be the last things considered when increasing fees. It is 2020 and we even use computers now you can determine who are islanders. I am sure the SSA could consider the people with whom they are supposed to be a "lifeline" for without increasing their rates at every drop of a hat. I also agree, cut the fat on the Woods Hole building. They just built a brand new facility in the Palmer Lot, how much more space can you need?
Should be pretty easy to
Mark EdgartownShould be pretty easy to identify islanders, title records are kept in the town halls. Benefit should be expanded to second home owners as well, they are tax payers!
I would like to know why the
CBarrett ChilmarkI would like to know why the Seattle / Bainbridge Island ferry that is comparable in time/distance/number of ferries/size of ferries is like one eighth the cost. They need to look to them to see how they are managing their costs.
Oh boy. The one way cost for
Robert Vineyard HavenOh boy. The one way cost for my car and driver: $12.90.
I think it's high time the
Marc Seattle, WAI think it's high time the state took over the SSA and all other ferries operating in MA, and ran them as a public transit service similar to here in Washington. Why are people content with these ridiculous public-private 'partnerships' and their price gouging?
Let's compare costs for vehicle and driver on a very similar route/distance:
Seattle to Bainbridge Island — $12.90
Woods Hole to Vineyard Haven — $85.00
I rest my case.
If the Seattle to Bainbridge
John Cape CodIf the Seattle to Bainbridge Island is run by the State then it's operating budget is supported by it. All public transit mostly runs at break even or at a loss, so don't let the low fare fool you. Everyone else in the State is paying for it's operation no matter if they use it or not. The SSA is funded only by the actual people who use it, not every single taxpayer of Massachusetts with the port towns responsible for any deficits. The Massachusetts MBTA is a excellent example, run by the State being a black hole of running at a loss, chronic mismanagement, always behind in maintenance / upgrades and the list goes on. So should the SSA be taken over by the State ? Would be substantially worse to say the least, making the current situation look like a fairy tale. The SSA needs a top to bottom review to be accountable to it's customer base and the Towns it serves.
Marc
Jim MenemshaMarc
Seattle’s system is hemorrhaging cash the likes of which is indescribable
We had a management study done ...
What has changed?
Insanity is doing the same thing ( with the same confederacy of dunces ) and expecting change
Get used to it if you can’t make challenging changes ...
Wayne is still running the show...
The same old players are playing the same old song .
Outrageous — once again poor
Jim ChappyOutrageous — once again poor planning, faulty implementation become the reasons to raise fares that are 50% higher in the last three years already. What has been the growth in costs, staff, exec comp, benefits, and “investment” during the same time ?
As usual, the running of the
Susan EdgartownAs usual, the running of the Steamship Authority again targets, especially, the non residents...even though they live here for many months, support all island businesses, gets involved in charities, supports all and any needs of the island, and, yet the fare with tickets will be almost $250?? There are no words, except the whole organization is being run by out of control authorizes who have no idea about the way ferries run in the rest of the country. Stop thinking everyone is rich, that there are no needs for restraint. It’s your terrible ability to know how to manage the organization.
It’s hard to compare the two
John P West TisburyIt’s hard to compare the two systems directly; the year round traffic is much more stable in Washington, and their ferry system is much larger. Their 2018 ferry system totals were 24,687,038 passengers and 10,761,822 vehicles. About 4.6 million people ride the Seattle / Bainbridge Island route each year, and 1,888,865 vehicles. The SSA totals in 2018 for both MV and Nantucket were 3,055,347 passengers (2,435,308 to and from MV), 483,047 autos, and 190,557 trucks (for MV: 417,931 under 20 ft., 53,449 over 20 ft.). So Washington's State Ferry System has 8 times the passenger volume and 17 times the vehicle volume. Economies of scale represent at least some of the difference. https://www.wsdot.wa.gov/ferries/traffic_stats/annualpdf/2018.pdf
How about cutting some staff
Tom EdgartownHow about cutting some staff like most businesses do when business is down rather than raising rates I never hear talk about cutting payroll you people are immune it seems to any staff cuts
The fare increases are the
John Cape CodThe fare increases are the least of things to worry about. Just wait and see what the Federal / State / Local tax increase's are going to be in the coming years ahead to pay for all this COVID mess and how it effects every one of us nation wide. Tax increases / price increases on everything along with high unemployment lingering and no wage growth for those that are working. It's only the beginning folks so you better pre buy your ferry tickets before the fare's go up !!!
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