The Winery Gazette – Martha’s Winery Information
The Steamship Authority is proposing substantial general rate hikes to cover expected revenue losses and budget shortfalls during the 2021 operating season.
At a meeting of the port council on Wednesday morning, SSA treasurer Mark Rozum announced the proposed tariff adjustments, which include an increase in almost all vehicle prices by at least seven percent. Standard fares would go up $ 4 to $ 6 each way in the off-season, while prices for midsummer weekends would go up by $ 15 from the current $ 100 to $ 115 on the Vineyard route.
The increases also included increases in parking fees by $ 50 per year and an increase in the passenger rate of $ 1 in both summer and off-season. Trip rates would rise between $ 2.50 and $ 3.50 depending on the season, and the cost of commuter books would also rise.
“Audible sighs,” said one of the port council members after hearing the news.
Mr Rozum said due to a drop in sales that can be traced back to the height of the pandemic this spring and into early summer, the boat line must account for about $ 8 million in lost tariffs, of which about $ 5 million is required would come from the vineyard route. The price increases were reflected in the proposed operating budget of $ 112 million for 2021, which Mr Rozum also presented to the port council on Wednesday.
The entire boat line board will take up the proposed price increases and budget at its October 20th meeting. A vote is planned for November. If approved, the price increases will take effect on January 1, 2021.
However, the port council meeting on Wednesday served as a preview of the difficult decisions to be made.
“It is really month after month that passenger numbers, which are very soft, are driving these proposed rate increases,” Rozum told the council.
While rate adjustments are not uncommon, the proposed hikes this year are larger than in previous years, reflecting the economic instabilities that have affected many companies as a result of the pandemic. By this year, the SSA has been in the black with no problems for around six decades with no state and federal subsidies.
In the face of a $ 15 million operating deficit following a traffic accident this spring, boat line leaders have turned to lawmakers for help. A temporary budget change passed in the summer released the five port municipalities from the obligation to meet a budget deficit that year, leaving it up to the state to cover the losses – a one-off solution that is unlikely to repeat itself.
On Wednesday, Mr Davis and Mr Rozum pointed out that passenger traffic had fallen off a cliff, while vehicle traffic, which also fell sharply from March to May, returned to robust levels after the beginning of summer.
“The problem we’ve been seeing here since spring is. . . the fact that we have an operating plan based on vehicle demand, ”said Davis. “And passengers, whether they come or not, still have to offer the same service by and large due to vehicle demand. So it shows that we need to look at a model where the vehicles pay a slightly higher percentage of the cost of this service. “
The proposed operating budget for 2021 is based on a pre-pandemic time from March 1, 2019 to February 29, 2020 and assumes that the number of passengers will be 90 percent in 2021, while the number of vehicle drivers will be increases to be at 100 percent. Operating costs are expected to increase by one percent.
“That’s a forecast,” said Mr Rozum. “We’ll monitor that for the last month of the budget until next month. If the budget were put together three months ago, that number or all of those numbers would be significantly lower. “
Projected operating revenues of approximately $ 112 million in 2021 represent a decrease of $ 5.7 million from the 2020 budget and a net operating loss of approximately $ 1.4 million, mainly due to a sharp decline in expected Passenger and parking revenues of around 14 and 19 percent respectively.
With the SSA normally operating with an expected $ 7 million surplus, Mr. Rozum said the boat line would have to raise about $ 8 million in tariff adjustments to balance the budget, implying the need for a flat seven percent increase would have in tariffs. The SSA approved a four percent interest rate hike last year to cover new hires and other costs, but passenger fares were not increased.
“The biggest problem this year was the massive loss of passenger revenue that offset vehicle prices in the past,” said Davis. “It’s a little more than what we were looking for last year.”
Coupled with the $ 15 increase in the main weekend vehicle rates and the $ 4 to $ 6 increase in the off-season standard rates, the summer excursion rates increase by $ 3.50 and the off-season rates increase by $ 2.50. The 10-trip coupon book prices will increase by $ 60, and all vehicles over 20 feet in length would see a seven percent increase in interest rates.
Commuter passenger prices will also increase, with the 10-trip passenger book increasing by $ 8 and the 46-trip commuter book increasing by $ 17.
Even larger elevations are proposed for the Nantucket route.
SSA spokesman Sean Driscoll said most of the increase will come from the high-season fare from the one-way increase of $ 15 on Friday, Saturday and Sunday summer trips. The increase will widen the price difference between weekday and weekend trips from $ 10 to $ 20.
“We went higher on purpose because that’s the whole point of that rate category,” said Driscoll. “The gap is widening.”
While some officials on the Nantucket Port Council expressed concern about the price increases, and at one point stated that it was cheaper to fly to Florida than to take the fast ferry, it was widely recognized that adjustments were needed.
“The fairly significant back-to-back gains are remarkable,” said Council Chairman Ed Washburn. “But that’s kind of a reality that we’re in.”
Mr Davis said he expected public comments from the port cities throughout the process.
“We don’t take this lightly,” he said.