Islanders petition for ferry rate rollback

This is a summer of discontent for many riders of the two largest ferry systems in Maine.

Both the Maine State Ferry system and the Casco Bay Island Transit District (CBITD), which runs Casco Bay Lines, recently voted to raise fares. The state ferry system’s hike would take effect July 1. Riders of Casco Bay Lines had to pay more starting May 1.

Last year’s massive spike in fuel prices, combined with the recession and lower ridership hit the budgets of both ferry services. CBITD officials also said rising costs led to the increase.

In Casco Bay, where the ferry system serves the residents of five year-round unbridged islands, nearly 300 islanders have petitioned to have that fare rescinded. Virtually all of those signing the petition are from Peaks Island.

The Casco Bay Lines’ hike means an average adult passenger ticket will increase between 95 cents and $1.05 during summer season (compared to 2007 rates) and 35 to 45 cents in the winter season, according to a press release from Casco Bay Lines. Unlike the state ferry system, Casco Bay Lines already has higher fares during the summer and lower fares during the winter. A 50-cent per person fuel surcharge adopted last summer will be dropped September 1. Freight costs were raised 8.6 percent.

CBITD is a quasi-public agency that owns and operates Casco Bay Lines and is run by a 12-member board, 10 of whom are islanders.

“They have put the burden on the backs of the ratepayers,” said Howard Pedlikin, of Peaks Island, one of the petition organizers, about the rate hike. “They don’t seem to care-whenever they have a little problem, they raise rates.”

The petition is even more direct. “CBITD annual fare increases are a direct result of fiscal mismanagement,” state the petitioners, in a document filed on April 24 with the Maine Public Utilities Commission (PUC), which regulates Casco Bay water taxis and the ferry service. “CBITD could operate over the next several years with no fare increases. A fair and impartial look at the budget reveals many ways to cut unnecessary costs.”

Catherine Debo, Casco Bay Lines’ general manager, declined to comment, referring questions to CBITD’s official response, filed May 22 with the PUC. But Donna Rockett, CBITD board chair, rejects the claim of mismanagement: “It bothers me. I believe that is very untrue,” she said. “We feel that we have worked very hard in the last three months to come up with a way to balance the budget and be fiscally responsible, while understanding everybody’s needs. Obviously we realize that people are hurt by any increase. That is why we worked so hard to cut costs as much as we possibly could.”

Pedlikin said that CBITD has raised rates 42 percent between 2004 and 2009. He also said that overtime is out of control. “They don’t dare think outside the box,” Pedlikin said. “It is time for some original thinking and they won’t tolerate that-I blame the board and management for that.”

The petitioners state that the “increases are outrageous in light of the current economy…” The petition claims that shoreside expenses can be trimmed.

They claim that proposals to combine trips to different islands to save money have been rejected. The petitioners state that CBITD employees have proposed ways to cut costs, but management rejected those ideas. They also claim that CBITD workers would accept a wage freeze.

Debo and Rockett, in the May 22 written response, state that cuts of $75,000 were made to the 2010 budget. They write that payroll hours have declined 12 percent between 2000 and 2008. CBITD based its fiscal 2010 budget on a wage freeze. However, 34 of 38 full-time employees belong to units of Local 333 of the International Longshoremen’s Association, and contracts for all three units are being negotiated. “At the tie, none of the bargaining units has agree to no wage or benefit increase,” stated Debo and Rockett in the written response.

The deficit for the first six months of fiscal 2009 was $188,000. From May through September, there were 37,000 fewer passengers compared to the previous summer. Vessel expenses increased over the past five years, to the point where it made up 29 percent of the budget in fiscal 2008. The cost of taking case of the passenger terminal went up 13.6 percent annually since 2004 due to rising heating costs and maintenance costs. Administrative costs were up only 2.76 percent per year during that time.

In addition, CBITD has exhausted its cash reserves and has operated at a loss since 2004. To address this problem, the CBITD board approved a $200,000 reserve fund in the 2010 budget. Pedlikin called that account a “slush fund,” which is unnecessary since ridership patterns mean that CBITD has always had to borrow money in the winter to make it to the more profitable summer season.

The petition also claims that CBITD made the mistake of locking into higher fuel prices in 2008, which led to the ferry company losing money. That fixed-price contract means CBITD is paying $1.50 above current costs.

CBITD looked into purchasing futures options to protect against spikes in fuel, but were told by city officials that this type of speculative investment was highly risky and not recommended. When prices declined in July 2008, the staff, with support of the Board of Directors Finance Committee, locked into a fixed-price contract. “While easy to question in retrospect, at the time entered into, those contracts were considered prudent,” wrote Debo and Rockett.