Islesboro officials: New ferry rates 'certain to fail'

By Stephanie Grinnell | Mar 21, 2019
Chart by Stephanie Grinnell This chart, created with information provided by Maine DOT, shows the numbers of passengers riding the Islesboro ferry between the busiest months of April through September for 2016, 2017 and 2018.

Islesboro — Islesboro officials are objecting to plans to revisit a flat-rate ferry rate increase proposed by the Maine Department of Transportation.

Commissioner Bruce Van Note on March 6 wrote to Ferry Service Advisory Board members and said while he believes “additional analysis is necessary,” he expects to present a proposal similar to Tariff No. 8 as a starting point at the end of the month.

“Unfortunately, due to the Islesboro lawsuit and the strict timelines of the rulemaking process, Maine DOT must put forward a revised rate proposal during the last week of March,” he said in his letter. “Please understand that this proposal will be fully subject to change as a result (of) continued input and deliberations.

"Pending further input, I anticipate that this end-of-March proposal might look much like the flat rate structure of the most recent Tariff #8 proposal, with necessary ticket price increases to meet anticipated revenue needs for at least four years. This simple proposal can be calculated quickly and will help illustrate the order of the magnitude of revenue needs.”

Maine State Ferry Service, which is overseen by Maine DOT, is projecting a budget shortfall and more than a year ago began the process of establishing new rates. After public hearings and several changes to the plan, a flat-rate fee structure for six islands in Penobscot Bay was approved. The highest increase hit Islesboro, which saw rates more than double for a passenger and vehicle. The rates went into effect May 21 and remain in place.

Islesboro filed a lawsuit against Maine DOT, arguing the process used to establish the rates was wrong. The court agreed that rulemaking should be used and is allowing Maine DOT to essentially begin the process of establishing the rates again.

At a Ferry Advisory Board meeting March 14, Van Note said the increase in flat rates could be as high as 17 percent to meet revenue needs, according to a newsletter distributed to island residents.

Van Note previously said other rate options could be considered, but he does not expect to fall back to the previous structure with different rates for mainland and island terminals. He asked that judgment of the proposal be withheld until the rulemaking process progresses further.

However, Selectman Chairman Arch Gillies responded March 12 with a letter of his own, outlining concerns about starting the process again with the flat-rate structure.

“While we understand that this new rate proposal is being put forward because it is simple to calculate in the short time frame in which MDOT must issue a new draft rule, and that it is subject to change following public hearings, we still feel compelled to respond at this time,” Gillies wrote. “A flat ferry rate structure with across-the-board increases to raise revenues for the Ferry Service will have a devastating impact on all islands.”

Gillies said ridership numbers demonstrate the flat rate has led to decreased ridership, which negatively impacts budget projections intended to offset the shortfall.

“Islesboro has several active committees investigating alternatives to the MSFS, including operating its own ferry. A continued, increased, flat-rate system that relies heavily on Islesboro ridership would most certainly fail,” Gillies said. “Beginning the public process for developing a new rate structure with a system that is certain to fail is counter-productive.”

According to numbers provided by Maine DOT, June passenger ridership fell by nearly 4,000 from the previous year on Islesboro. In July, there were more than 3,500 fewer passengers than in the prior year, August passenger numbers dropped by more than 2,600 year-over-year, and September brought a decrease of more than 3,000 passengers from 2017 on Islesboro.

Gillies said Islesboro officials favor rates based on cost of service. The trip between Islesboro and the mainland in Lincolnville is about 3 miles. Gillies noted that the ferry covered 66 percent of its operating costs with revenues, while other islands averaged between 35 and 45 percent.

“We have a very important discussion ahead of us and it is critical that the conversation begins with a proposal that steers us in a positive direction,” Gillies said.

Comments (0)
If you wish to comment, please login.