March 22, 2019
BANGOR DAILY NEWS (BANGOR, MAINE

Ferry service raided reserves to balance books

SEARSPORT — The Maine State Ferry Service was forced to raid a reserve account of $462,000 to balance last year’s books.

Deputy Commissioner of Transportation Russell Spinney revealed the bookkeeping slight of hand during a meeting of the Maine State Ferry Service Advisory Board at the Searsport Lion’s Club Thursday.

Spinney said the funds were drawn from money set aside for construction projects at the North Haven, Bass Harbor, Swans Island and Islesboro ferry terminals. The money was used to pay an unforeseen labor settlement and to cover a drop in early-season revenues.

As a result, instead of a $404,848 shortfall, the ferry service balance at the June 30 end of the fiscal year showed a balance of $57,636. Total ferry service expenditures during the 1993 fiscal year were $3,062,980.

“We borrowed cash from those accounts to balance the books,” Spinney told the two dozen island residents and advisory board members who attended the meeting. “We will hopefully recoup as we go along through charges to these accounts.”

Although he acknowledged that “something is going to suffer if we don’t” recover the funds through increased revenues, Spinney predicted that would not be the case.

Spinney explained that one of the reasons for the decline in revenues was that it took longer than anticipated to institute last year’s fare increase. He said the fiscal year ended two months into the rate hike and the upcoming year’s financial figures should reflect stronger revenues.

“You earn all your revenues from the front end of the fiscal year and then you draw from that revenue as you go on,” Spinney said.

He stressed that when ferry service administrators were faced with choosing between curtailing services and maintenance or borrowing from the internal funds, they opted for the fund transfer.

“You don’t shut down services. You don’t stop spending money on your vessels,” Spinney said. “It was a gamble.”

Vinalhaven Town Manager John Spear said he found no problem with the decision to “rob Peter to pay Paul.” His big worry, he said, was that the $57,636 balance presented an inaccurate picture of the service’s finances.

Spear said he was concerned that politicians would get the wrong impression from the figures.

“It’s going to be very easy for the Legislature to trim $50,000 if it looks like we met our budget,” Spear said. “It should show that service lost money last year.”

In years past the ferry service budget was funded on a 55-45 basis; the 55 percent coming from the general fund, the 45 percent from the fare box. The service is in the process of attempting to reverse that, and the financial reports indicate it is having mixed success so far.

The Rockland-Vinalhaven run cost $868,995 to operate last year with 51 percent, or $439,629, coming from the fare box. The year before, fares accounted for 46 percent of that run’s $712,283 budget.

The Rockland-North Haven run cost $598,032 to operate last year with 34 percent, or $204,561, coming from the fare box. The year before, fares accounted for 36 percent of that run’s $595,588 budget.

The Rockland-Matinicus run cost $11,690 to operate last year with 39 percent, or $4,529, coming from the fare box. The year before, fares accounted for 40 percent of that run’s $9,093 budget.

The Lincolnville Beach-Islesboro run cost $724,586 to operate with 58 percent, or $421,984, coming from the fare box. The year before, fares accounted for 49 percent of that run’s $716,999 budget.

The Bass Harbor-Swans Island run cost $712,499 to operate with 40 percent, or $282,779, coming from the fare box. The year before, fares accounted for 39 percent of that run’s $660,225 budget.

The Bass Harbor-Frenchboro run cost $37,990 to operate with 14 percent, or $5,459, coming from the fare box. The year before, fares accounted for 37 percent of that run’s $31,098 budget.


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