SSA Governors Review Sketchy Finance Report On New Service Model

By JULIA WELLS

Gazette Senior Reporter

Amid a long list of caveats about assumptions and the need for more data, Steamship Authority treasurer Wayne Lamson told the boat line board of governors yesterday that he is in the neutral zone when it comes to the financial impacts of the new service model for future ferry operations to the two Islands.

"I feel that we should continue to explore the viability of the service model. But a lot more information needs to be gathered, and certain assumptions need to be validated," Mr. Lamson said at the monthly boat line meeting in Woods Hole yesterday.

"The conclusions of my preliminary analysis should not be construed as either being in support of or in opposition to the various features of the proposed service model," Mr. Lamson wrote in a six-page report released yesterday.

Short on fresh numbers and long on ambiguity, the report is somewhat uncharacteristic for Mr. Lamson, who is known for his precision and logic when it comes to boat line financial affairs.

In the preliminary report Mr. Lamson said the new service model could be what he termed "cost neutral" for the boat line.

The ambitious new service model was first unveiled at a regular SSA meeting in January.

The model calls for reshaping many of the policies and operations of the boat line, including a plan to limit short-term automobile traffic to the Islands, increase passenger service using expensive high-speed ferries, and redistribute freight traffic by requiring fuel and petroleum products to be carried by barge. The plan was unveiled immediately after a sudden decision by the boat line to buy the New Bedford passenger ferry Schamonchi nearly two months ago.

The service model is still a concept and has not been voted on by the boat line board. The financial analysis that accompanies the model was expected to be unveiled yesterday, but what the public got instead was a tiny first step into the complicated question of how to pay for the model.

The preliminary report focuses only on capital costs. The next phase of the report will examine revenue and cost impacts from reducing car service to the Islands.

For starters, Mr. Lamson said the boat line would need to increase its bonding limit from $50 million to $75 million in order to pay $30 million for a new multi-purpose high-speed ferry to Nantucket.

Any increase in the bonding limit would need the approval of the state legislature.

The report outlined three basic alternatives for the next 10 years:

* Continue with the present capital plan, including the replacement of the ferry Islander at a cost of $20 million, the refurbishment of the ferry Nantucket at a cost of $9 million and the refurbishment of the ferry Eagle at a cost of $5 million.

* Continue with the present capital plan, but increase the bonding limit to $65 million and accelerate the plan, completing it in six years instead of 10.

* Launch the new service model, increase the bonding limit to $75 million, buy a new multi-purpose ferry for the Nantucket run at a cost of $30 million, refurbish the Nantucket and the Eagle as planned, and launch high-speed ferry service between New Bedford and the Vineyard by replacing the ferry Schamonchi with the Flying Cloud, the high-speed ferry that currently runs between Hyannis and Nantucket. The model also now calls for replacing the Islander with the refurbished Nantucket on the Vineyard run and using the Eagle as a replacement vessel on both runs.

This plan for how to deploy the Nantucket and the Eagle is a new twist. The Eagle is never used on the Vineyard run because it was found to be poorly suited for use in Woods Hole. And as recently as last month, SSA general manager Armand Tiberio publicly reiterated his commitment to replace the Islander with another doubled-ended ferry.

Yesterday Mr. Tiberio shrugged off both the changes.

"Something can be done to change the Eagle [to make it suitable for the Vineyard run]," Mr. Tiberio said. As for the Nantucket, Mr. Tiberio said, his commitment to replace the Islander with a double-ended ferry has not changed, and that the Nantucket might possibly be used on the Vineyard run as an interim ferry until a new ferry comes on line. He did not elaborate.

In his report, Mr. Lamson raised questions about the plan to replace three ferries on the Nantucket run with one high-speed car, passenger and freight ferry.

"It appears that the characteristics assumed for the new high-speed ferry may not be adequate in terms of speed and capacity to meet the authority's current and future requirements under the proposed new service model for Nantucket," he wrote.

In other business yesterday, the boat line board voted 2-1 to complete its purchase of the Schamonchi at a cost of $1.7 million.

Nantucket governor Grace Grossman had voted in favor of the Schamonchi purchase two months ago, but yesterday Mrs. Grossman changed her position because she said it was never made clear at the outset that the Schamonchi would be replaced with a high-speed passenger ferry.

"I don't believe it's fiscally prudent to buy a vessel for $1.7 million and then after a year or two to not use it," she said.

Both Vineyard governor J.B. Riggs Parker and Falmouth governor Edward DeWitt said there has been no formal vote to replace the Schamonchi with the Flying Cloud.

"We haven't made any decision to do any such thing," Mr. DeWitt said.

"I think it needs to be reiterated that we are not making that decision here today," Mr. Parker said.

But Mrs. Grossman used the moment to illuminate the growing divide between Nantucket and the Vineyard and Falmouth on the subject of the service model.

"There was no mention before that we were going to discard this boat, and that is now part of the new service model, and I just want everyone to know that I am against it. I am protesting it, and I just want it on the record," she said.

During the discussion of the preliminary financial analysis, Mrs. Grossman struck the same theme, openly questioning the wisdom of spending millions of dollars for experimental high-speed ferries, just as the national economy takes a nose dive.

"We're going to reduce cars and freight, and we're taking a big chance on having a debt we can't pay for," she said.

Mr. Parker and Mr. Dewitt told Mrs. Grossman she was their best critic.

"The questions that you are asking deserve answers and are going to keep us on our toes," Mr. DeWitt said.

"I agree with your questions, and it's clear to me that you are one of our strongest consciences in terms of keeping us from making unwitting errors. I applaud it," Mr. Parker said.

Also yesterday, the public heard a brief report from the boat line board about their recent trip to New Orleans for an annual conference on fast ferries.

The conference took place early this week; seven people attended representing the Steamship Authority, including Mr. Tiberio, Mr. Parker, Mr. DeWitt, Mr. Lamson, Barnstable board member Robert O'Brien, Vineyard financial advisory board member Robert Murphy and a ferry captain. No Nantucket members attended. Mr. Tiberio said the conference included seminars on the environmental issues surrounding high-speed ferries.