Privatizing Plan for Schamonchi

Steamship Authority Tells Union That Losses Could Be Stemmed If
Another Operator Runs New Bedford Ferry

By JULIA WELLS

After only three years of owning the New Bedford passenger ferry
Schamonchi, Steamship Authority senior managers are now proposing to
convert it back to a private operation, the Gazette has learned.

"Unfortunately, our efforts to improve the Schamonchi's
financial performance have not been successful . . . . But just because
the authority cannot operate the Schamonchi profitably does not mean
that the service should stop . . . and there exists one course of action
that may prove successful . . . namely allowing a private operator to
provide the service instead of the authority," wrote boat line
chief executive officer Fred C. Raskin in a letter to union leaders late
last week.

The letter went out Friday and was obtained by the Gazette
yesterday.

Purchased by the boat line three years ago for $1.2 million from the
Thompson family, the Schamonchi is currently running huge annual
operating deficits and is now on target to lose more than $800,000 this
year. In recent months SSA managers have said repeatedly that they do
not know how long they can commit to run the service.

In his letter, Mr. Raskin did not shy from the topic of heavy union
manning requirements on the ferry.

"We have every reason to believe that a private operator, who
would not be bound by the restrictive work rules for its employees that
the authority must follow, would be able to conduct its operations much
more efficiently," Mr. Raskin wrote in part.

Mr. Raskin said the plan to convert the Schamonchi to a private
ferry will follow the Pacheco Act, the state anti-privatization law, to
the letter.

The Pacheco law is aimed at preventing public agencies from using
private contracts unless they can demonstrate cost savings. Among other
things, the law provides a list of protections for employees who might
lose their jobs because of the change, including minimum wage
requirements for any private contractor who takes over the service.

Boat line compliance with the Pacheco Act was written into the new
enabling legislation adopted by the state legislature last year. The
legislation also expanded the SSA board of governors from three to five
by adding voting members from Barnstable and New Bedford.

Under terms of the Pacheco Act, the SSA will also encourage its
employees to organize and put in their own bid for the service, Mr.
Raskin said.

"We expect to begin this process within the next few
weeks," the CEO wrote, referring to the process to put the ferry
out to bid.

The move comes at a time when the boat line has been trying to ink a
deal with a private contractor to run high-speed passenger ferry service
between New Bedford and the Vineyard starting next summer. That plan
appeared to be on a fast track to completion until two months ago when
SSA managers learned that, because of their ownership of the Schamonchi,
a conventional ferry, such a move could run afoul of the Pacheco Act.

The general counsel for state auditor Joseph DeNucci told boat line
senior managers that if the SSA issues a license for a private ferry
service between New Bedford and the Vineyard, it would be forced to
continue operating the Schamonchi or risk violating the Pacheco Act.

New Bedford city officials have been on a quest for the last three
years to develop expanded ferry service between the Whaling City and the
two Islands.

A final vote by boat line governors is still required before the
license for a fast ferry can be issued to New England Fast Ferry, a
private marine consortium that wants to run the service.

It is unclear how the plan to privatize the Schamonchi will be
received by the boat line unions, especially the union that includes
some 350 unlicensed deck officers. One union member who did not want to
be named said yesterday that the move is "just another end run
around Pacheco."

Union leaders have opposed the plan to contract with New England
Fast Ferry for the high-speed service because they want the boat line to
run the service.

Citing a risky market, Mr. Raskin has said it makes more sense to
license a private contractor in that case.

Mr. Raskin did not return telephone calls from the Gazette
yesterday.