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Approved by Community Transportation Forum:
November 16, 1994
Report Prepared:
March 14, 1995
TO: Distribution below
FROM: Community Transportation Forum
RE: Report of the Forum
DATE: March 14, 1995
Enclosed is the Final Report Regarding Transportation Organizational Options as they apply to Chebeague Island and to the Chebeague Transportation Company. This is the work product of a fifteen month effort by a volunteer citizens advisory panel consisting of a diverse group of people sharing a common interest in the transportation challenges facing Chebeague Island.
The report summarizes the Forum's examination of the history of transportation to Chebeague, a nationwide survey of ferry services developing insights into how others address similar problems, and a detailed analysis of available organizational options. Key considerations included the strengths and weaknesses of each option, and the impact of each upon transportation services and upon the people of Chebeague who depend upon those services.
Finally, the report presents the unanimous recommendation of the Forum, which is to pursue the creation of a municipal transit district.
Questions regarding the report should be directed to any of the contributing authors listed on the cover page. We hope that you will find our work informative and valuable.
Sincerely yours,
/s/ Peter M. Rice
Vice Chair, Community Transportation Forum
DISTRIBUTION:
Casco Bay Island Transit District (2)
Casco Bay Trans. Advisory Committee (3)
Chebeague Island Library (2)
Chebeague Transportation Company (15)
Contributing authors (10)
Cumberland Town Council (8)
Greater Portland Council of Governments (2)
Island Institute (2)
Maine Department of Transportation (2)
Steve Moriarty
Prince Memorial Library
Region 6 RTAC Chair Richard L. Twitchell
State Representative Joe Taylor
State Senator Jeff Butland
The Chebeague Island Community Transportation Forum is an independent group of year-round and seasonal residents that was formed to consider reorganization of the Chebeague Transportation Company. It grew out of a series of three public meetings held on the Island during the spring and early summer of 1993. These public meetings were held at the request of the Town of Cumberland in response to discussions between the Town and the CTC over the possibility that Chebeague's transportation problems could be more easily addressed if the Town were to play a more active part in finding a solution. The Town Council wanted more information on what citizens of Chebeague wanted to do about the nature and organization of transportation services to the Island. Consequently, the Town of Cumberland Islands Committee sponsored the series of meetings.
The public meetings, held in May and June, considered a wide variety of transportation issues on Chebeague from the location of passenger and barge landing sites on Chebeague and the mainland through conflicts with Yarmouth over the Cousins Island landing to parking needs on the Island and the mainland. One of the issues that was posed to the people attending the last of these meetings was the form of organization of the Chebeague Transportation Company. Four organizational alternatives (see Appendix A) were suggested as possible options by Glenn Kersteen, representing the CTC, whose Board of Directors had been working on this issue for several years. Advantages and disadvantages of each option were given, but it was clear that the people at the meeting felt unable to judge the merits of the various possibilities in the time available in such a forum, so a motion was made and passed to establish a committee, separate from and broader than the CTC Board or the Island Committee, to consider them in more depth and make recommendations back to the residents of the Island and to the Town Council.
Membership of the committee was solicited by notices on the ferry and in the Calendar. The final membership was made up of: Jill Malony (Chair), Donna Damon, David Hill, Beth Howe, Sam Hunter, Glenn Kersteen, Jim Phipps, Peter Rice, Cheryl Stevens and Gary Varney. CTC representation -- by Hill and Kersteen -- on the committee was obviously important, since it was the organization of the CTC that was at issue. Phipps is a member of the Board of Directors of the CBITD which was thought to be a useful perspective, and Varney is the Chebeague Town Councilor. The other six members had no particular affiliations, though all were stockholders in the CTC (as were all other participants). Harriet Hutchison, Pommy Hatfield, Jim Millinger, Ian Brown, Roy Jackson, Michael Grunko and David Stevens attended the CTF meetings on a more or less regular basis. Carol White served as liaison with the Island Committee but was not a regular participant. A grant of $500 to fund the Committee's operations (postage and copying) was provided by the Recompense Foundation.
The committee met every two weeks from summer 1993 to Thanksgiving 1994. Minutes of meetings and results of parts of the Committee's work were fairly regularly sent to CBITD, the Cumberland's Town Manager, Maine DOT's Ports and Marine Transportation Division, and later to the Greater Portland Council of Governments. Public meetings to report on the Committee's progress were held on Chebeague on January 15 and November 19, 1994. A report was made to the CTC stockholders meeting of July 9, 1994. On April 11, 1994, the committee also presented a report on their work to the Cumberland Town Council in connection with a Council Resolution intended to help the committee explore funding options for a broader transportation study. See Table 1.
Early meetings of the new transportation committee were devoted to considering the group's mission. While it was clear that our primary purpose was to consider CTC reorganization options, it seemed important to explore these in the larger context of Chebeague's transportation needs. The name Community Transportation Forum was chosen as indicative of the broad representation of the group. The initial statement of mission was "to analyze organizational options to best serve the transportation needs of the people of Chebeague and to make recommendations on these options to the citizens of Chebeague, the CTC and other affected parties."
Later in the process, as the committee grappled with the interconnections between the organization of the CTC and other Chebeague and Casco Bay transportation issues, the mission statement was broadened to include three items:
(1) To conduct a general examination of transportation needs, systems and options for Chebeague Island,
(2) To examine organizational issues affecting inner bay transportation serving Chebeague, and
(3) To propose a recommended course of action to the citizens of Chebeague.
An effort was made to secure funding from the State or the Greater Portland Council of Governments for the broader study of Chebeague's transportation needs that the CTF thought was needed but which was beyond its capacity to do. The Cumberland Town Council adopted a resolution supporting the CTF's application (see Table 1). While funding for a study only of Chebeague was not found, this search for support ultimately resulted in participation by three CTF members on an Advisory Committee to the Passenger Transportation Study being conducted by the Greater Portland COG, the Maine DOT and the two ferry companies in Casco Bay (Casco Bay Lines and CTC). This study is exploring ferry transportation needs and services in Casco Bay. The study is funded under the federal Intermodal Surface Transportation Efficiency Act.
Four kinds of information were initially gathered by the CTF in order to put the organizational options in some perspective. Historical background documents were intended to bring all members of the committee "up to speed" on previous work on transportation on Chebeague. Information on state legislation defining the domains of CBITD and CTC, letters and memos from 1991 on various CTC organizational options, and reports from CTC on its operations and 1991 shareholder survey were reviewed.
Second, a subcommittee of Stevens, Howe, Damon, Malony and Rice was formed to look at ferries serving other, similar islands with daily, year-round service to see how they were organized, what kinds of issues and problems they faced and how they dealt with them. The results of surveys done by this committee are described beginning on Page 11. They were useful in providing information on how various organizational forms work in practice.
Third, the committee undertook a "brainstorming" exercise that was intended to make us think about the needs and possible transportation options for Chebeague, independent of the day to day concerns and constraints that usually shaped our discussions. A questionnaire asked committee members to rate (on a scale from 1 = least important to 7 = most important) various options related to: Parking on Chebeague and the mainland, landing sites, ferry rates, a wide range of ferry and non-ferry transportation services and particular ferry operating options or alternatives. The responses (shown in Table 2) did, as one might expect, show support for existing arrangements and known options. But the effort produced discussion of a range of interesting possibilities.
Finally, members of the committee discussed the CTC's situation and possible options with Bob Benson, Town Manager of Cumberland and Steven Moriarty, former member and chairman of the Cumberland Town Council and member of the Cumberland-Yarmouth Joint Standing Committee. Meetings were also held with Tom Cox, John Brown, Ted Weber, and Pat Christian of CBITD and Joe Kott and John Bubier of the Portland Area Council of Governments. A subcommittee also had a series of meetings with Rob Elder (Director of Ports and Harbors at the Maine Department of Transportation) as someone knowledgeable about the Chebeague and other Maine ferries, and about the larger transportation planning picture. This ultimately led to the broadening of the CTF's mission, the request for funding for a broader transportation study and the involvement by several CTF members in GPCOG's Casco Bay Transportation Study.
This GPCOG study provides a useful "larger context" into which the CTF's work can fit. The COG staff have surveyed CTC and CBITD ferry riders, mapped routes, inventoried existing and proposed wharves and terminals, as well as parking facilities. Estimates of demand for bus, bike and pedestrian facilities, and projections of ferry ridership in 2000 and 2010 will be made and compared with current and planned passenger and vehicle capacity. Issues related to the organization of ferry services are also expected to be examined.
The primary work of the CTF, however, was working through the various options for the organization of CTC. The organizational options and the subcommittees appointed fairly late in the process to summarize the implications of each were:
Sam Hunter and David Hill
Jim Phipps and Cheryl Stevens
Glenn Kersteen, Peter Rice, Ian Brown and Jim Phipps
Gary Varney, Donna Damon, Jill Malony
Each subcommittee developed a position paper giving a general description of the option and how it would work. A series of practical, concrete issues that each group addressed were: The effect of this option on local control over the ferry, its effect on ferry operations, effects on costs of operating the system (e.g. economies of scale, tax implications, personnel implications and administrative overhead), effects on capital funding, availability of federal and state funds, and legislative changes required to implement that option. On a more general level, each group also tried to estimate the effect of their option on relations with the Towns of Cumberland and Yarmouth, and its effect upon the social, economic and political structures of Chebeague itself.
The position papers were discussed in detail and a matrix comparing them was developed. In the discussions, the two highest priorities that emerged for evaluating the various proposals were: Maintaining control over the ferry by Chebeague residents, and improving relations with Cumberland and Yarmouth. However, the other financial and operational issues were seriously considered, as was the practical difficulty of actually adopting a new form of organization and making the transition to it.
The CTF's final recommendation to the people of Chebeague, to the CTC and to the Town of Cumberland was stated in a resolution passed on November 16, 1994:
THE COMMUNITY TRANSPORTATION FORUM (CTF) RECOMMENDS PURSUING THE CREATION OF A TOWN OF CUMBERLAND TRANSIT DISTRICT, A QUASI-MUNICIPAL BODY, ORGANIZED UNDER 30-A M.R.S.A. SECTION 3501 ET SEQ., IN ORDER TO ENSURE CONTINUED, SAFE, RELIABLE, AFFORDABLE AND LOCALLY CONTROLLED TRANSPORTATION SERVICES FOR THE CHEBEAGUE ISLAND COMMUNITY. (see also Table 3).
This transit district would be an independent body in the Town of Cumberland. It would be established by the Town within the framework of state law concerning transit districts. The exact nature of the board of directors and the powers of such a district would have to be worked out in negotiations between Chebeague residents, the CTC and the Town Council. It would be possible to have a board that was controlled by Chebeague year-round and summer residents -- the initial proposal suggests three residents of Chebeague, two from Cumberland (including Chebeague), two without a residency requirement and the Chebeague Councilor and Cumberland Town Manager, ex officio. The governmental status of a transit district would enhance Chebeague's ability to deal with the Town of Yarmouth as an equal. It would also provide some financial benefits and open possibilities for closer working relations with both the Town of Cumberland and, possibly, the CBITD. Given these possible advantages, the CTF members all felt that it was well worth exploring the possibility of establishing such a district with the Town. The critical issue in such an exploration would be whether a board of directors could be designed that would be acceptable to the Town Council and provide residents of Chebeague with an acceptable degree of control over the ferry service.
The rest of this report will explain the research done by the CTF. The first section provides a brief history of the CTC and how the issue of its organization has emerged. The second, describes the national survey of 15 ferry companies providing service to 23 islands with year-round populations. The third section describes and analyzes the five organizational alternatives available to the CTC that were considered by the CTF.
Steamboat service to Chebeague from Portland began in the last half of the 19th century. Since the early 20th century, boat service to Chebeague from Portland has been provided by the Casco Bay Lines.
An inner bay route to Cousins, Chebeague and Littlejohn Islands was initiated in 1933 by Walter Swett Sr.'s Falmouth Foreside Development Company. Bus service was provided from Falmouth Foreside to the Portland Bus Terminal and to Congress Street. The Falmouth Foreside Development Company differentiated itself from the Casco Bay Lines and its ferries, the Nellie G. (I and III), soon captured a large piece of the market by providing the following:
In 1952 Walter Swett, Sr., owner of the Falmouth Foreside Development Company, joined two other Portland businessmen in buying the Casco Bay Lines.
In 1955 the Central Maine Power Company built a bridge from the mainland to Cousins Island and then built a power generating plant at Birch Point. When the bridge was opened to the public in 1956, many residents of Cousins and Littlejohn Islands began driving to their cottages. The opening of the bridge also prompted many Chebeague Island residents to drive to Cousins Island and pick up the boat from there.
Soon after, Walter Swett, Sr. sold his interest in the Casco Bay Lines, and the company lost interest in serving the inner bay route. By 1959, Casco Bay Lines was running only three round trips a day to Chebeague, with no early morning commuter service.
In 1959, Jasper Smith and several others began services from Chebeague Island to the wharf on Cousins Island on an on-call basis. In 1960 when the Casco Bay Lines stopped providing service to Chebeague on the inner bay route, Jasper Smith's water taxi service became the primary provider on its old, but now reduced route. However, competition between the two companies had created some long lasting bitterness as the CBL tried, unsuccessfully, to bring the CTC under regulation by the Public Utilities Commission, thereby hoping to limit its growth.
Meanwhile, in 1957 the high school on Chebeague closed and ultimately arrangements were made for the students to go to Greely High School in Cumberland. Kip Homan was hired to run a service to carry the students to Cousins Island to be met by the Cumberland school bus. Somewhat later, Jasper Smith took on the school contract.
In the early 1960s, Robert Blanchard began operating a parking lot near the wharf on Cousins Island, and John Gibson began a barging operation from "Pogy Shore". The barge was able to carry cars, other vehicles and additional kinds of freight that could not be carried on the water-taxi.
In 1971 the Chebeague Transportation Company was founded "to provide and supplement existing public and private transportation facilities to Chebeague Island." Initially it primarily served to improve Smitty's service at each end of the route, beginning rather informally as a group who got together to provide a float for the water-taxi. To recognize the donations made by the members of the group, each was given stock in the new company. In these early years the other service provided by the CTC was a mainland bus service from the Cousins Island wharf to an inland parking lot. In 1975, when Jasper Smith decided to retire, the CTC acquired the water taxi service and two of its three boats. It also bought John Gibson's barge service. In 1976, the CTC began leasing the Blanchard parking lot. It was really the lease of the Blanchard lot and, later, the introduction of discount ticket books for stockholders that broadened the number of stockholders of the CTC, so that it gradually came to include most year-round and regular summer residents as well as others such as business people regularly doing business on the Island.
As service to Chebeague from Cousins Island became more frequent and regularized, some residents of Cousins Island who lived near the wharf and the Blanchard parking lot expressed concern over the traffic, parking and barging activity. Before the formation of the CTC, Robert Blanchard had been sued by the Town of Yarmouth over use of his parking lot. After CTC became involved, both Blanchard and CTC agreed to a consent order limiting the capacity of the parking lot. A later suit by Yarmouth and Blanchard's neighbors resulted in a second consent decree reaffirming the earlier court order and placing strict limitations on the Pogy Shore barging operation.
In 1977, CTC began parking operations at Cumberland's Drowne Road municipal center, nine miles from the Cousins Island Wharf.
In 1989, Yarmouth passed a town ordinance that seasonally restricts vehicles from being driven to the wharf to drop off belongings and passengers.
Since everyone knew that the CTC lease on the Blanchard parking lot would end in 1999, this has exerted pressure on the CTC to develop a plan for continued parking after that date. In 1992 the Town of Cumberland renewed negotiations with the Central Maine Power Company (earlier efforts had failed) to move the wharf, the barging operation and the parking to unused land near the Birch Point power plant on Cousins Island. In 1993 the engineering firm of T. Y. Lin developed a concept design for a CMP Site Passenger Ferry Facility that was submitted to both the Towns of Cumberland and Yarmouth. Negotiations over it have been continuing since then. in 1994, the Blanchard family indicated that they would not renew the lease on the Blanchard lot.
In 1980 the privately owned Casco Bay Lines went bankrupt. Its service was continued through the creation, in 1981, of a governmental body, the Casco Bay Island Transit District. The CBITD provides four to six round trips daily between Portland and Chandler Cove on the West end of Chebeague. These trips include commuter runs. The one-way trip is about 75 minutes.
The City of Portland has recently built a new terminal and a modern parking garage for the CBITD. However, there is very little parking at the Chandler Cove landing on Chebeague. In the next few years, the State is expected to consider proposals for replacing the present Chandler's Cove wharf. It is possible that the landing site might be moved to another place on the Island.
As the latter part of this history suggests, the ferry transportation situation on Chebeague is unusually fluid at the moment. In 1990, in an effort to improve services, reduce costs and enable the CTC to better deal with external groups and organizations that have power over its operations, the directors of the CTC began to explore the possibility of reorganization as a public services corporation, a development association or a municipal services district. New pressures and issues were emerging that raised the salience of the reorganization issue but also suggested how varied, complex and "public" the functions and the needs of the CTC had become. The issue of a new landing site on Chebeague, negotiations over a new mainland landing site with Central Maine Power, and the threat of further legal proceedings from residents of Cousins Island, all suggested that a private company was no longer an adequate form of organization to undertake the work that needed to be done. It was at a disadvantage, both financially and in dealings with governmental and quasi-governmental bodies. In addition, the image held by some people of the CTC as a closed, private, profit-making body compounded its problems. Through 1991 and 1992 the exploration of reorganization alternatives expanded. Ultimately, however, it became evident that the CTC had, indeed, become such a "public" organization that any decision about reorganization would have to be made with the participation of the residents/stockholders of the Island. This led to the public meetings in the spring and summer of 1993 and to the formation of the CTF.
See Appendix B for legislation proposed in the middle 1970s regarding ferry facilities on Cousins Island and Appendix -- for a thumbnail chronicle of historic events as they affect transportation to Chebeague Island.
"No man is an island, entire of itself" said John Donne (Devotions XVII). But no more than people are islands are places unconnected to the world around them. In the 19th century, when road transportation was often more difficult than water transport, and natural resources such as fish, timber and stone abounded, islands grew as integral parts of local, national and international economies. The rocky islands of Maine, the barrier islands of the southeast coast, the scattered islands of the great lakes and the islands of Puget Sound are simply the most obvious examples.
As automobiles became the dominant form of American transportation, many islands became, in effect, parts of the mainland as bridges were built. Unconnected islands truly did become more isolated than they had been. The exhaustion of many of the natural resources that had formed the base of island economies, and the economic replacement of others often led to the decline of permanent populations. However, because of their very isolation and their unique character, combining shoreline and rural beauty, many have attracted a new population of summer tourists and residents, retirees and urban commuters. To survive as real communities of any size and capacity, unconnected islands depend on regular, year-round ferry service. In some states such as Maine and Washington, the state has come to accept ferries as extensions of highways, so that extensive state-owned ferry systems serve many islands. However, where there are no state roads, or where states are not as organized in their ferry services, non-state-run ferries serve individual islands and sometimes groups of islands. Often, as with many of the runs that have been folded into state ferry systems, these ferries have been in operation for generations and are taken for granted by the people they serve as basic public utilities.
The inner bay service to Chebeague has a long history, but the present service provided by the Chebeague Transportation Company dates only from the 1960s and 70s. When the CTC was established it made sense to create a private, stock-holder owned company. Ultimately, ownership spread to virtually all year-round and regular summer residents. Now it makes sense to consider whether the existing organization can still best serve Chebeague's needs. One way of exploring the nature of other organizational forms is to look at how other ferries serving "year-round" islands work. How are they organized? What are the strengths and weaknesses of various organizational forms? Do other ferry companies face the same kinds of problems that Chebeague is presently facing? Do different organizational forms make those problems easier or more difficult to deal with? A survey of other ferry companies was undertaken in order to answer these questions.
An analysis of data provided in Sarah Bird Wright's Ferries of America (Atlanta: Peachtree Publishers Ltd., 1987) indicates that of approximately 261 ferries in the United States, 52 percent or 136 serve islands. Since islands are popular tourist attractions and some have no permanent residents, many of these ferries, especially in colder climates, operate only in the summer. Even some year-round ferries go to places like Alcatraz or Angel Island in San Francisco Bay that have no residents. Eliminating these ferries as well as ferries to some populated year-round islands such as Nantucket, Staten Island and Manhattan, finally produced a group of 28 inhabited islands served by ferries all year round. Of these we talked to the managers or owners of 15 companies, serving 23 islands (see Table 4 for a map of the ferries).
The results of these interviews indicate that Chebeague is unique in many respects. Only one other ferry, for example, is owned by local stockholders, and Chebeague's problem of access to a mainland landing site is more acute than in any other place. On the other hand, many other ferry companies had similar concerns and sometimes useful ideas about such issues as parking and financing of capital expenditures. The themes that ran through all of these interviews were concerned with who controlled the ferry service and how much control they had over critical contingencies; how much service to provide and the impact of the service on the islands; and what their financial base was, both for operations and capital expenditures.
The Islands
The nature of an island's location and population determine the kind of ferry service it needs. Commuters and off-island school children need to be able to go back and forth every weekday at normal business hours, for example. But the nature of a ferry service can also shape the population of an island.
The attitude of counties in Washington State and apparently of Michigan, that ferries are simply an extension of roads, added to the location near urban areas of many of the islands in inner Puget Sound and Sault Ste. Marie, may well encourage the suburbanization of these islands. Trip lengths range from 5 to 20 minutes, and the frequency of runs, which is the same in summer and winter, ranges from 9 to continuous (about 80) round trips per day.
At the other extreme, some islands are, by their nature and their ferry service, largely the destination of tourists, summer people and retirees. The winter population primarily serves this industry.
In between the suburban islands and the tourist ones are the nine with what might be described as "mixed" economies. Tourism is important to them -- all have much larger summer than winter populations. Several are close to metropolitan areas, so there is demand for a ferry schedule that accommodates commuters. All also have and work to maintain a base of non-tourist industry on the island. Often the fishing, quarrying or lumbering that they used to depend on is in decline. But they continue to have schools and other community institutions. The ferry provides year-round access but the service is not so frequent, especially in the winter, that there is any illusion that they could be part of the mainland. Chebeague is part of this latter group, with ferry service that is more frequent than some and less than others.
Typically, both tourism-dominated and mixed economy islands are large enough to be separate governmental jurisdictions, or even several jurisdictions. Here, Casco Bay seems to be an exception. Thus in Maine, the Cranberries are an incorporated town, but except for Long Island, the Casco Bay islands are all parts of mainland communities.
The Ferries
Most ferries provide similar services, though sometimes in somewhat different ways. They carry people, dogs, cats, bikes, freight, medical rescue squads, mail and sometimes garbage. The critical difference in how they do it, of course, is whether they carry cars. Car ferries typically carry lots of things -- freight, school children, emergency rescue patients, animals and mail -- in trucks, cars, school buses, and ambulances. This generally means that they simply have different rates for different size vehicles. Thirteen of the 23 ferry runs are car ferries. The other ten (including five of the six Casco Bay Line runs) carry people and their personal baggage on ferries, and cars, if they are allowed, and often other bulk cargo on barges.
The great divide among the ferry companies is between the ferries in Washington and Michigan that are owned by county governments, and the others which are all privately owned.
Four of the public ferries were owned by single counties, all in Washington State. Several had apparently been part of their county road departments since the 1920s. The Chippewa County Transit Authority serves the Sault Ste. Marie area of northern Michigan. It started in 1975 as part of the county Road Commission, but with the addition of a number of failed private ferries to its operation in the 1980s, it became a separate transportation authority providing ferry, bus and airport services.
Private ownership takes several forms. Three ferries are family-owned businesses, sometimes going back a number of generations. The Bald Head Island ferry is a subsidiary of a family-owned development company. The other three are held by larger groups of people. Madeline Island's ferry company was originally created by the joining of two competing family ferry companies. Later they expanded ownership to three other families -- all summer people -- in order to get access to additional money and professional expertise. Shelter Island's company is a profit-making subsidiary of the non-profit Shelter Island Heights Homeowner's Association. This is a group of about 180 individuals out of a total Island population of 2,500 in winter and about 12,000 in summer. The association provides municipal services to part of the Island, and happens to own the ferry serving everyone. Decatur Island's ferry is also owned by the homeowners' association of the major development on the Island, presently made up of 50 households.
Beaver Island is the only other company like the CTC that is owned by a broad group of stockholders. After a period in the early 1980s when it was owned by a travel entrepreneur, it was bought back by the Islanders who reorganized the company, offering stock to Island residents, property owners and people doing business with the Island.
The difference between the public and private ferries is quite basic. Public ferries are seen as public utilities and are not expected to break even. Fares are low ($.50 to $1.30 in 1986) per passenger, one way, and service is frequent. In four cases, fares cover fifty to sixty percent of the operating costs, but in one case fares contribute only twenty-five percent. The rest is covered by the County and the State.
These public operations are also smaller and in some ways more stable in their operating pattern. Since they do not vary their schedules very much between summer and winter, they do not have temporary summer employees. They also have only one, or in one case two boats for each run. The number of employees, ranging from four full time equivalents to twelve full time/five part time is, on the average, smaller than that for private companies.
Both their bureaucratic positions as parts of larger public organizations, and their political nature as parts of county governments mean that these ferries appear to be further from their customers than are private ferries. On the other hand, while these ferries may be less responsive, they do seem to benefit from the power of the governments they are of. In negotiations with the Town of Steilacoom over changes in the ferry dock, the ferry manager came to the table as part of the county government. He indicated that negotiations are not always smooth, but the parties are equal.
Unlike public ferries, private ferries must break even. Typically, they have higher fares. They also have fewer runs during the winter when the boats are less full and lose money. For example the Washington and Madeline Islands ferries go from one and seven runs per day in winter, respectively, to twenty-five and thirty in the summer. Fares range from $3.00 one way to $13.50 for Beaver Island. Only Shelter Island's ferry operates on the same schedule summer and winter and has enough traffic in both seasons to have a one way fare of only $.50
Because the passenger load is so uneven between summer and winter, these ferries have more boats -- two at a minimum, five for the largest. More boats require more crew and large numbers of cars require summer employees to direct traffic. These companies typically have a core of from seven to twenty year round employees, with more than three times that number in the summer.
In family-owned companies, fares and schedules and other operating decisions are made by the owner. In ferries owned by stockholders or homeowners groups, these decisions are made by a board of directors -- typically around seven members elected by the stockholders.
County owned public ferries and small private companies are the most common ownership patterns. It is interesting that there are no ferries owned by island towns -- the closest are those owned by stockholders or homeowners groups. Only Decatur Island's is non-profit; even Shelter Island's is a for profit subsidiary of a non-profit homeowners' association. A number of the private companies do have close long-term ties to their islands. They are family owned often going back several generations. They hire Island employees and see themselves as attuned to local needs and demand.
The one ferry that fits neither of these molds is the Casco Bay Line. In many respects the CBITD operates more like the private ferry companies just described. They receive only a 1.25 percent subsidy from the State and essentially must break even. Service to Peaks Island has some of the characteristics of the county-owned ferries, but with the cost of taking a car at $20 one way, even a frequent schedule does not reduce the "friction" of the distance and the water. Service to the other islands, which are all either summer islands or islands with mixed economies is considerably less frequent and more expensive. Finally the CBITD is the only operation to run regular tour boats. These generate revenues that are used to subsidize service to the outer islands.
Unlike the private ferries, however, and in many respects, unlike the other public ones as well, the CBITD operates as an open, public organization. Members of the board of directors are elected by voters in the islands being served. Regular meetings are open and many decisions generate active involvement and lobbying because of the general split between the interests of Peaks and those of the other islands.
Islands and Ferry Companies: Responsiveness and Control
Residents of islands are uniquely dependent on ferries that control and shape the way they live their lives. Ferries control access to islands more strongly and obviously than highways do for other places. Access can be made easier -- by more trips, by having car ferries, by lower fares, by advertising, by making the ferry ride a pleasant or interesting experience in itself. Or access can be made more difficult. Moreover, who decides about the level of access to an island can be directly shaped by the ownership of the ferry and the nature of the constituency it serves. Issues of control, responsiveness and the social and economic impact of the ferry service on its island were all important topics in these interviews.
On some islands the issue of ease of access and degree of development was raised explicitly. Beaver Island, for example depends heavily on tourism, but island stockholders do not want "too much" development. The ferry has a "package tour" to encourage day trippers, with ferry passage, a bus tour of the island, lunch at a local restaurant and a ticket to the island museum. Otherwise, however, there are few hotel rooms; most construction is of summer houses some of which can be rented on a weekly basis. But for an island closer to the mainland, with easier and more frequent ferry service, maintaining such a compromise might be more difficult.
Indeed, the county-owned ferries in Washington and Michigan seem to be at the other extreme. There was no discussion with the managers of these companies of the issue of growth.
In these cases, decisions about the degree and nature of development lay at least partially in the hands of the owners of the ferry company. Control over the ferry means control over the island, and who holds that control is important. In most cases the development pattern has simply been an unintended consequence of the ferry service. But Bald Head and Decatur Islands are both cases where it was not. The manager of the Bald Head ferry indicated explicitly that the development company was not willing to risk having the ferry be run by the island village for fear that it would then become primarily responsive to existing residents rather than to the needs of the development company.
Beaver Island, on the other hand, in trying to encourage just such responsiveness to local residents was careful to limit stockholding to residents, property owners and people on the mainland doing business with the Island. Even so, at $300 per share, the manager said he thought that only about half the population owned shares and that many Islanders thought of the ferry as a fat-cat/profit-making enterprise. On Shelter Island, where the ferry is owned by a group of 180 homeowners out of a 2,500 to 12,000 population, this image of exclusiveness was an even greater problem despite the manager's efforts to run it openly. At county rate increase hearings, Islanders came to accuse the board of "shenanigans." Similarly, Decatur Island's homeowners' association initially alienated the other residents of the Island by their handling of the ferry service and have since been trying to improve matters by making the service available to those residents.
Public ferries avoid this image of exclusivity, but may well not be any more responsive. In Washington and Michigan, decisions about ferries that are run at the county level are made by county elected officials or by a board appointed by such officials. Islanders made up only a small portion of the population of these counties, and summer people, to the extent that they came to these islands, were not represented at all. Only the Casco Bay Island Transit District has a governance structure designed to encourage direct responsiveness to island residents, though here again, summer residents have little direct leverage.
In this range of patterns of responsiveness, the CTC with a low price per share of stock and 800 [a low estimate; actual 1996 number is 1450] total stockholders is probably already at the democratic end of the spectrum. Obviously, this does not preclude the problems of a fat-cat/closed image that were faced by other stockholder or homeowner owned ferries. However, it might well be possible for the CTC to accept the idea that even though it is formally a private company, it should function as a public one.
The CTC has never adopted a policy with regard to encouraging or discouraging growth on the Island. Indeed, this might well be considered inappropriate for a private company, however broadly owned. Even so, an implicit policy exists in the nature of the boats, schedules and fares. Like Beaver Island, the implicit policy seems to be to encourage development, "but not too much." Some residents of Yarmouth may wish the policy to be more restrictive, and to the extent that they can dictate the access points, boats and schedules, they can definitely have an impact.
Ownership of Operating Resources
As Chebeague's case suggests, while ownership of a ferry provides substantial control over its operations and some control over the development of an island, as well, neither of these is likely to be complete. Often ferry companies do not own all the resources -- boats, landing sites, parking lots -- that they need for a successful operation. The patterns are variable, and though no other company faced as basic a problem as Chebeague's, the issues other ferries faced are often not very different.
Virtually all companies own their own boats, meaning that private companies own theirs and counties own ferries for county-run operations. As one manager said, ferry boats, particularly of a certain size and type, are not very common, and any company that does not own its boats is at the financial mercy of the person or company who does.
Wharves are a different matter. All the county operated ferries own the docks at both ends of their runs. The managers of the Bald Head Island and Sayville ferries also made a particular point of saying that they own all the capital facilities they depended on, so they also own their wharves on both sides. But the others all depend on docks at one end or the other owned by the state, by local towns or by private owners. Such docks are either leased to the ferry company or the company is charged a fee based on the number of trips. Generally this mixed ownership is not an issue except when leases are reviewed or where the dock needs upgrading and the company has to negotiate with the town over financing the work.
Not surprisingly it is the cars -- whether waiting for a car ferry or parking for a passenger one -- that cause the most problems for these companies. The three islands that ban cars clearly do not need parking at the island end; but generally companies that lack parking at one end or the other wish they had it or were trying to get it. Only the Beaver Island ferry operates a remote lot on the mainland like the CTC -- in their case at the Charlevoix high school. This, however, did not reflect poor relations with Charlevoix, only the lack of parking at the pier.
No other ferry company has to deal with anything like the combination of dock access and parking faced by the CTC. Two reasons seem to account for this. One is that ferries' mainland piers are in downtowns or commercial areas where traffic is at least expected. This does not eliminate complaints, but it keeps them at the level of grumbling. Only the Bald Head Island ferry runs from a residential area, apparently owned by the same development company, and it has a marina with an area planned for the ferry dock.
The other factor that protects some operations from conflicts with their mainland communities is that many have been in operation from those communities for many years. Several are in the fourth generation of the same family. The ferries in Washington were generally established in the 1920's. Two more date from the 1950s. Several managers said that since the ferry companies had, in effect, grown up with their communities, they were accepted as a normal part of the local scene, even if the town was not obviously impressed by the business they drew in.
The bottom line from many of those interviewed was that ownership of all critical facilities and equipment is the most desirable state of affairs. Perhaps not surprisingly, the county-owned ferries control these resources most consistently. Only three private companies own boats, wharves and parking and two of these are recently developed, exclusive, second home developments. Interestingly, these happen to be three of the four where everyone going to the island had to leave their cars on the mainland.
Capital Financing
Of course, ownership of facilities requires capital financing. This is difficult to find for public and private ferries alike, though public ones have somewhat more choice of possible sources of funds.
But seven companies had bought boats fairly recently and another had built a breakwater. Only two companies -- the Bald Head Island development company and the Decatur Northwest -- financed their equipment through completely private means. Several other private companies made use of guaranteed loans from the Small Business Administration, thus lowering the interest rate on some, if not all, their loan. Madeline Island put aside $300,000 or a third of the cost of their new ferry over a period of years by putting $50,000 per year into a construction fund run by the Federal Maritime Administration.
If private companies struggle to put together financing and relied on public sources, public ferries are not always better off. Pierce County Washington financed their new ferry partly from the state public works fund from which counties can get long-term loans at low interest rates. However, it was only possible to do this because they also went to the State Legislature and got a bill passed that allowed them to pay this loan back out of gas tax revenues. Other funds for this boat came from the federal government and from county road funds. The Casco Bay Lines' 50 percent federal/25 percent state/25 percent local financing also involved a complex process of assembling funds. The state share had to be approved in a voter referendum concerning the financing of another CBITD ferry, and the local contributions had to be assembled by application to the City of Portland and the Towns of Cumberland and Long Island. The latter's share has to be approved on a year by year basis.
Conclusions
Chebeague is an island with a mixed economy made up of commuters, summer people and local businesses. It has a strong sense of community, strong enough to assimilate new people on a gradual basis. It is not a suburban Cousin's, Peaks, Anderson or Sugar Island, not a planned recreational community like Bald Head or Decatur Islands or a summer community like Fire Island.
In part, Chebeague's character is shaped by its ferry services -- the ability to get both to Portland and to Yarmouth easily but not too easily. We may well have the image that more/quicker/easier ferry service (including easy parking at both ends, for example) would inherently be better. But it is worth thinking how reducing the "friction" of crossing the water could change the economy and the social structure. Indeed, it would be interesting to have a clearer idea of how both have changed as a result of the formation and the gradual expansion of service provided by the CTC.
It is not inherent in public ownership of a ferry that it adopt the idea of reducing the friction of the travel to a minimum. It does seem to be the case in Washington State and Michigan, but this probably depends more on political traditions and financing than on organizational structure. But it is interesting that the only public ferry system in this study that did not use this model was the CBITD. The others appear to respond as much to administrative or bureaucratic imperatives as to political demand from island constituents.
Clearly, the other most common organizational alternative, the family owned company, is not one of the options being considered. On the other side, while we have considered the option of organizing as a non-profit, only one, very different, ferry in this study was so organized.
Two things seem clear from this study. One is that the CTC is in a more tenuous legal and political position than any other ferry studied. The second is that it is among the most responsive in the group.
CTC is more vulnerable than most other private ferries because it does not control many of the assets or facilities that are critical to its operation. Most privately owned companies are fairly careful to own not only boats but docks, parking and other facilities if they can. Many are old companies. At a time when some long-time ferry companies seem to be squeezed financially, with some like the Casco Bay Lines or the Sault Ste. Marie ferries shifting to public ownership, these remaining private ferries are survivors. Like the CTC, they serve attractive islands. But unlike the CTC, they may be aided in their survival by control over critical contingencies acquired over a period of many years.
Public ferries generally do exactly the same thing, though their managers were less explicit about the rationale for control. The CBITD was the one exception. That is, CBITD merely operates vessels without control over parking and pier facilities. It is interesting that the only ferry other than CTC facing a suit over parking near a wharf was a public authority which probably does find itself in a stronger position to deal with the suit.
While the CTC is generally more vulnerable and less able than other ferries to exert leverage in its dealings with private citizens and governmental units, its broad base of stockholders should give it considerable legitimacy. While public organizations are legally bound to open procedures and are assumed to be democratically responsive, the public ferries in this study, with the exception of the CBITD, did not seem to be particularly accountable to the residents of the islands they served. Structurally they were responsive to the voters of the counties in which the islands were located. But the interviews gave the impression, at least, that they operated as fairly routine bureaucracies. The CBITD, with its board elected by island voters and its active political divisions is clearly an exception. If the CTC contemplates a shift from a broad stockholder owned structure to a public one, it should be careful that the structure of the public entity allow for as much input and responsiveness as the private one does now. This is not to say that the existing private structure could not be more open or responsive; it probably could. But an ill-designed public organization could easily be less so.
The members of the CTF worked through the various organizational alternatives that are described in this section. Several, such as the proposal for a municipal services district, were modified in the process as new information about options became available. The group also developed a set of categories for describing and comparing the alternatives. The comparison is shown in Table 5. These ultimately became a set of rough priorities, with local control having the greatest weight and improved relations with Cumberland and Yarmouth as the second priority. These categories overlapped substantially with the set of priorities developed by the Directors of the CTC when they began to consider organizational options in the early 1990s (Table 6). As might be expected, the overall CTC priorities were somewhat different from what evolved in the CTF meetings. CTC emphasized internal operating goals to provide high quality service and low rates over the maintenance of autonomy and local control and improved municipal relations. CTF, for its part, emphasized more "political" goals related to the CTC's ability to shape its external environment.
However, the difference in priority systems can easily be overstated. The essence of the comparison in Table 5 is that each alternative serves a different mix of goals, and the overall pattern of tradeoffs among the goals shapes the overall evaluation of each option. Indeed, the options really grouped into three categories: Island-owned companies (the for-profit and not-for-profit options), public organizations (a Town department, a municipal services district or a transit district) and one hybrid (the joint venture with CBITD). Private ownership is strong on local control but weak on improved municipal relations; while the reverse is generally true of public options. So much of the discussion focused on how the limitations of a particular option might be overcome. The difficulty of actually adopting and implementing the various choices was also an important practical consideration. For example, the primary benefits of non-profit status are local control, various financial and tax benefits and possibly an improved image on Chebeague but probably not in the wider world. Ranged against the advantages is the difficulty of getting tax exempt status after more than twenty years of operation as a for-profit corporation. If the CTF had found during its deliberations that non-profit status would have had a major impact on the CTC's image or that IRS certification would be much simpler than had originally been thought, then the overall evaluation of the non-profit option might have been higher. Each of the options involved these kinds of strengths and weaknesses, and sometimes problems, such as the need for authorization by the state legislature, that seemed to be a significant impediment to a particular alternative were found, on more research, to pose less of a problem.
Finally, the CTF did not attempt to have a consistent ranking of the various criteria as the CTC did. Each member of the CTF probably had a somewhat different ranking, and it was the differences among members that led to useful discussion. Essentially we discussed the options until everyone was able to agree, for their own particular reasons, to a common alternative. The priority imputed above to local control and municipal relations is simply a reflection of the importance of those topics in the committee's discussions.
Parenthetically, it should be noted that after the CTF's deliberations were completed, the Town of Cumberland Planning Department conducted a Comprehensive Plan Resident Survey (excerpted in Table 7) showing the commitment that the residents of Cumberland (Islanders and mainlanders alike) have to Town involvement in supporting ferry services to Chebeague Island.
Out of this process of discussion, it was the municipal transit district option that emerged as having potentially the best set of tradeoffs. The Committee had worked through the non-profit option and the idea of an affiliation with the CBITD. Neither of these options had garnered broad support, though the latter, in particular, posed some interesting possibilities.
As the Committee moved on to consider public options there was some unease with the possible loss of control of the ferry by Chebeague residents that might result. In particular, at the beginning we thought that neither a Town department nor a somewhat more independent municipal services district could be established without state legislation. "Private and special" bills establishing government bodies for particular local communities are not uncommon. However, the Legislature is not particularly interested in being drawn into local disputes so that, generally, such legislation is not proposed unless all the local parties agree on an appropriate solution to their needs and the solution does not challenge established state practice. In the case of a Town department or a municipal services district, the submission of such a bill might well provide an opportunity for residents of Yarmouth to try to further restrict Chebeague's access to Cousins Island. Moreover, the state has always been reluctant to grant voting privileges in such local governmental bodies to anyone who is not a registered voter in the local area. Obviously a substantial number of the present stockholders of the CTC do not vote in Cumberland. Thus, the members of the CTF thought that the chances of a private and special bill were not very great, and that this canceled out the benefits to be gained from a government organization. Finally, the Town indicated that they were reluctant to create a Town Department for the ferry service.
However, in the process of its research on transit districts, the committee looking at transit and municipal service districts came upon 30-A M.R.S.A. section 3501 et seq (Appendix D) that allows towns to create municipal transit districts. If a mutually agreeable proposal could be negotiated with the Town of Cumberland that would substantially preserve Chebeague's control over the board of directors, such a district could be established without having to go to the State Legislature. When this option was presented to the other members of the CTF, there was general agreement that it represented the "middle ground" that they had been searching for.
Therefore, a proposed ordinance and a set of bylaws for the Town of Cumberland Transit District were drafted (see Appendix E). Some useful feedback on them was received from Town officials. Finally the CTF formally adopted this option as its recommendation and presented it to the residents of Chebeague at a public meeting on November 19, 1994.
But this leaps ahead. The options as the CTF considered them, were:
Status Quo
With the exception of actions that might be taken by the CTC Board of Directors to modify organizational aspects of the Company within the current structure (e.g. inviting a Yarmouth representative to serve on the Board in some capacity), the Company would remain a for-profit entity. No action would be taken to alter either its organizational structure or formal interface with municipal and other official bodies.
Non-Profit Status
This alternative involves creation of a non-profit corporation under state law and a request that the IRS recognize the non-profit corporation as tax exempt. CTC could then transfer its assets to the non-profit tax exempt organization and liquidate. If successful, the result would be a change from for-profit to non-profit status without any discernible changes in operations.
Assuming that the public favored such a move, a non-profit corporation would be incorporated and an application would be filed with the IRS for either partial or full tax exempt status. This is described as a "lengthy process," and by no means has a guaranteed outcome. The support of the community and Town would probably assist in the process. Assuming a favorable decision by the IRS, a detailed proposal would have to be prepared for evaluation by stockholders spelling out how the conversion would work and what would be asked of stockholders regarding approval of a transfer of the Company's assets to a tax exempt organization and a subsequent liquidation. If the stockholders approve the proposal, the conversion steps would be taken.
Department of Town of Cumberland
Transportation services currently provided by CTC would be taken under the auspices of a department of the Town of Cumberland like Val Halla golf course, the Sewer District or the Housing Authority. Legal counsel to the Town of Cumberland indicates that a Town department would have to be authorized by private and special state law.
Municipal Services District
A municipal services district is a quasi-municipal entity that usually assumes responsibility for providing services that are otherwise provided by a municipality. The most common examples are sewer or water districts. MSDs are created by a private and special state statute. The charter of the MSD will define what governmental functions or services the district will assume. The legislation will also specify how the Board of Trustees or Directors are chosen; what, if any, qualifications are necessary in order to be chosen as a trustee and it will also specify who is qualified to vote for trustees.
Because MSDs assume responsibility for providing services otherwise provided for by the municipal parent, the MSD may receive a rebate of property taxes paid to the town. Whether that would occur here is debatable, since the Town of Cumberland does not now provide transportation to Chebeague.
The enabling legislation would also specify what the powers and duties are of the Board of Trustees. The Board could have the power to determine routes, rates, and schedules; hire and fire personnel; and make other decisions regarding the level and variety of services.
Chebeague is already serviced by a transit district, the Casco Bay Island Transit District (CBITD). The Transit District operates in three towns and its enabling legislation specifies how directors are chosen, the qualifications for potential directors and also specifies who may vote for directors.
Municipal Transit District
This option creates a body similar to a municipal services district, but enacted by the Town Council of Cumberland. The ordinance, within the constraints set by existing state law, would define the services provided by the district, the powers it would exercise, and would define the makeup of and selection process for the board of directors. It would be financially self-supporting, though its budget would be submitted to the Town Council for review.
The specific proposal made by the CTF is that the Town of Cumberland Transit District would have a governing body of seven voting directors and two, ex-officio, non-voting members, the Chebeague Town Councilor and the Cumberland Town Manager. The voting members of the board would be nominated at an annual meeting on Chebeague. Three must be residents of Chebeague. Two others must be residents of Cumberland and could come from Chebeague. Two would not have a residency requirement and could, for example, be summer residents. These nominees would be submitted to the Town Council which would appoint them as directors.
The intent of this proposal is to establish a body that could manage the ferry operation much as it is now. However, the shift from a private to a public organization could open up possibilities for changes in operations, as indicated below, if Islanders want them.
Affiliation with Casco Bay Island Transit District
This option could actually take a variety of forms that would range from complete assimilation of the CTC into the CBITD, through CTC becoming a subsidiary or a partner of the CBITD, to making limited, mutually advantageous operating agreements. Assimilation and joint ventures were discussed by the CTF, but only the joint venture was considered in depth.
A joint venture company between the CTC and the CBITD could be created by establishing a separate, non-profit organization whose board of directors would include representatives from the residents of Chebeague, the CTC, the CBITD and perhaps the Towns of Cumberland and Yarmouth. This corporation could then obtain goods and services, by lease or purchase, from CTC and the CBITD. The CBITD might, for example, provide administrative services, while the CTC would continue to run the ferry operation. One virtue of this arrangement is that it would be easy to return to direct provision of the transportation services by the CTC in the event that the attempted affiliation were ultimately unsuccessful.
Status Quo
Historically, CTC has been controlled locally. Local control has taken the form of a twelve member board of directors. There are no restrictions regarding the qualifications for directors, except that they be duly elected by the stockholders of the Company. Obviously, a status quo strategy would retain local control exactly as it is currently constituted. Year-round and summer residents have equal rights as stockholders.
Non-Profit Status
A non-profit organization would have a governing body similar to that of the current Board of Directors. Consequently, the degree and nature of local control could be similar to the current situation.
Department of Town of Cumberland
Several alternatives might be considered for control over a Town department. The size, structure and method of selection of a governing board for the department would be of great concern. Such a department could be completely controlled by the Council and the Town Manager. On the other hand, it is not uncommon in municipal enterprises for the Council to appoint a relatively independent board of directors whose makeup would be established by the state law enabling the creation of the department. A preferred alternative would be to have a board partly appointed by the Council and partly elected from Chebeague property owners. The managing director would be bound to report to the Town Manager, but in the last alternative, might operationally report to the Board. This arrangement might allow some summer residents to be voters, but it is uncertain whether the State Legislature would accept property ownership as a qualification for voting.
Presently, the ferry service is not under as much local control as the image of a private corporation would suggest because of conflicts with Yarmouth and the need for various kinds of assistance from the Town of Cumberland. So, if a Town department were carefully designed to allow for strong Chebeague representation, there might be more real local control as transportation needs would be protected by a Town rather than a Company.
Municipal Services District
As with a Town department, the degree of Island control over a MSD would be defined in the state legislation setting it up. Normally this would be an independent, quasi-governmental body with its own board of trustees. State law could ensure that those selected to manage transportation policy and operations would be answerable to the people of Chebeague through the process of voting for trustees. However, as with a Town department, the State Legislature might well be unwilling to enfranchise summer residents who do not vote in Maine.
Municipal Transit District
Like a Town department or a MSD, a transit district would have to be set up by law. But this would be done by town ordinance rather than by state law. It might be possible to convince the Town of Cumberland not only that a transit district providing ferry service to Chebeague should be controlled by Chebeague residents, but also that summer residents, including those from outside of Maine, should be represented on its board.
Affiliation with Casco Bay Island Transit District
Like any other option, the degree of local control over a joint venture would depend on the makeup of the board of directors of the joint venture corporation. However, the attractiveness of this alternative is that it does not go as far, nor is it as permanent in giving power to Town officials. The makeup of the board of a non-profit organization is not subject to local or state legislation. Instead it is determined by the people setting up the corporation, in this case, the people of Chebeague. Institutional members such as representatives of CTC, CBITD and the Towns of Cumberland and Yarmouth would make up one group of directors. They could then be balanced by a greater number of "Chebeaguers". Some consideration would have to be given to how a membership group of "Chebeaguers" would be defined. The present membership of the CTC stockholders includes a number of people who are not year-round nor summer residents, nor property-owners on Chebeague. Should membership of the entity that would be represented on the joint venture board be this Broad?
Status Quo
Local control would be assured through the continuing management by the stockholder-elected CTC Board of Directors. Input to both Directors and Manager are easy and direct.
Non-Profit Status
Local control would be of a nature similar to the current situation.
Department of Town of Cumberland
This option would only ensure local control if the policy body were made up of Chebeague property owners as well as elected officials. Operations manager and some or all other employees might or might not be Islanders.
In general, the transfer of the CTC to a public body would result in more public oversight and reporting. A Town department would have to comply with right-to-know laws and would probably have more paperwork requirements.
Municipal Services District
The enabling legislation creating a MSD would specify the qualifications of those who could serve as trustees as well as specifying who could vote for the trustees. It might or might not allow enfranchising property owners as well as local voters.
The board of directors would probably hire a director and s/he would hire other employees. To the extent that Chebeague people were represented on the board, they could influence who was hired. Again, public oversight and reporting requirements would be those of any public organization.
Municipal Transit District
The arrangements would probably be similar to those for an MSD. The difference is simply that Chebeague residents would have a much greater voice in negotiating with the Town over the way the district would be organized and controlled and the way it would work than they would negotiating in the state legislative context.
Again, as a public organization, a transit district would be held to more elaborate oversight and reporting requirements which might increase paperwork. This seems the most likely of the public options to continue the practice of having a local manager and Island employees, thus ensuring that avenues of communication from customers to management would be free-flowing.
Affiliation with Casco Bay Island Transit District
Local control of policy would be ensured through control by Chebeague residents of the joint venture board of directors, just as in the straight non-profit option. Since this venture would contract with the CTC for operating services, access to the operating staff might be much as it is now, though some administrative functions might be moved to Portland.
Oversight and reporting requirements would not be as stringent as those of a public body.
Status Quo
None.
Non-Profit Status
None.
Department of Town of Cumberland
Budgets and debt would have to be approved by the Town. Fares would be set after public hearing. It is possible that if the Legislature were to enact a private and special law which would authorize the Town to establish and operate a ferry, it could also make that ferry subject to the jurisdiction, control, and regulation of the Public Utilities Commission. This would make things like the ferry rates and schedules subject to another layer of regulation. Some companies in the national ferry survey were subject to PUC-type regulation. Some found it useful and others, a hassle.
On some issues, such as arranging for parking on either the Island or the mainland, more routine working ties with the Town could be useful. Otherwise, however, the intent in designing the legislation that would establish the department would be to have the ferry continue to run more or less as it does now.
Municipal Services District
The general intent would be the same as that for a Town department -- to keep the operations more or less as they are now, though closer ties to the Town could help to find solutions to some present problems.
The board of trustees of the district would determine routes, rates, and schedules, subject to public hearing. The Town might not review its budget.
Since this option also requires state legislation, the Legislature could, just as with a Town department, make an MSD subject to regulation by the PUC.
Municipal Transit District
As with the other public options, the intent would be to establish a district that could operate the ferry more or less as it is operated now. Under the provisions of state law that authorize municipalities to establish transit districts, rates, fares and schedules would be set by the district board after public hearings. The budget would be reviewed by the Town Council. The district would, for practical purposes, not be subject to regulation by the PUC.
The formation of a transit district could open up some of the possibilities of joint planning or operations with the CBITD that are discussed in the next section on the joint venture with the CBITD.
Affiliation with Casco Bay Island Transit District
The intent of this proposal is to maintain regular service much as it is at present. However, affiliation with the CBITD opens the possibility of providing some services such as barging from a site other than Cousins Island. This might serve to reduce conflicts with Yarmouth. Both the CTC and the CBITD could make the most of their strengths, and this might result in some redistribution of functions over time.
Status Quo
Continuation of present service.
Non-Profit Status
Continuation of present service.
Department of Town of Cumberland
Best case scenario: Ferry operations could continue as scheduled, perhaps with an expanded schedule as Town support personnel might be able to take on some of the administrative work, freeing up money for other functions. Employees would continue to be local and base of operation would be on Chebeague. Yarmouth might be more agreeable in their dealings with the Town, thus reducing parking and landing problems. Worst case scenario: The Town might decide that budget constraints would require a cut back in services. Employees and/or base of operations might shift to mainland.
Municipal Services District
An MSD would be somewhat more independent of the Town than a Town department might be. As with a Town department, some support functions might be provided by Town personnel. As stated earlier, if the board of trustees was responsive to Chebeague residents, then the base of operations might well be on Chebeague and employees could continue to be Islanders.
Municipal Transit District
Like an MSD, a transit district could probably be more independent of the town in its operation of the ferry than a Town department. This may also be the strongest option for ensuring that the base of operations remains at Chebeague and that employees are local. There are possibilities for saving money as a result of buying administrative services either from the Town or from the CBITD.
Affiliation with Casco Bay Island Transit District
Passenger operations would continue much as at present, though savings from administrative consolidation might free up resources for increased runs. CTC would probably continue to have an Island base of operations and local employees.
Status Quo
None. Sales and income taxes would continue to be paid by the Company.
Non-Profit Status
Sales taxes would no longer be collected on the goods purchased by CTC, including big ticket items, such as new vessels. State and Federal income taxes would no longer be collected.
Department of Town of Cumberland
Economies might result from merger with the Town. Many administrative duties such as payroll, bookkeeping, and scheduling could be handled by a staff already in place. The Operations Manager would report directly to the Town Manager.
A Town department would have reduced or no taxes on profits. Presently, CTC is required to pay state and federal income taxes on all profits derived from its operations. Because of certain incentives provided under the IRS tax code, for many years CTC never had to pay any federal income taxes. It has, however, been subject to state income taxes, and in the future, it will likely have to pay both federal and state income taxes.
A municipality is exempt from payment of sales tax on all goods purchased for its use. Such exemption applies not only to the goods and services consumed as part of day-to-day operations such as repair parts, telephone charges, and office supplies, but also to the taxes incurred in the acquisition or construction of vessels.
Municipal Services District
An MSD would have many of the tax advantages of a Town department. It would be exempt from sales tax on all goods purchased for its use as well as from state and federal income tax. It might also save money by sharing administrative staff with the Town.
Affiliation with Casco Bay Island Transit District
As a tax-exempt non-profit corporation, the joint venture organization would not be subject to federal or income taxation. However, it is not likely to qualify for a state sales tax exemption. Purchase of administrative services by CTC from CBITD could result in savings.
Status Quo
Due to extensive changes in tax policy, CTC will not be able to duplicate the "creative financing" employed in the funding for the Islander. Consequently, financing of any new capital expenditures will be at market rates for a private corporation, which are typically the highest among the options under consideration.
Non-Profit Status
More attractive rates of financing are available to non-profit entities, but availability of such funds is not automatic, and rates are usually not as favorable as those available to municipal entities.
Department of Town of Cumberland
A municipality can borrow on a tax exempt basis. Indeed, CTC was fortunate to finance the construction of the Islander under an industrial revenue bond sponsored by the Town of Cumberland. The interest on this debt was non-taxable to the holders of the first preferred ship's mortgage note, and as a result, the interest rate is significantly below the rate of interest that would have been charged if the interest was taxable to the holder of the note. During 1994, the Company's interest rate was 2.65% and would likely have been 5% or higher if it had not been tax exempt. That reflects an annual savings on a 15 year, $260,000 note of approximately $5,100, or $76,500 over the term of the note. Congress eliminated substantially all benefits of industrial revenue bonds in 1986. Presently, municipal issues are being financed at 3% to 5%, depending on various size, term, and risk factors.
Security -- A municipality can back its debt with the "full faith and credit" of the government, meaning that it can levy taxes to pay back bondholders if ferry revenues were not sufficient to do so. This process is an extremely beneficial "credit enhancement" to holders of the debt. This method of credit enhancement could potentially reduce the tax exempt interest by 1-2 percentage points. It is not unusual, however, for a municipality to issue tax exempt "revenue bonds," repayment of which is secured only by the revenues of the enterprise. While such bonds typically result in a higher interest rate, generally it is easier to convince the citizen to approve such bonds in referendum since there is little chance that the property tax will be used to finance the debt.
Voter approval - items up to $100,000 could be voted by the Town Council. Items costing more than $100,000 may be submitted to a vote of the citizens of the entire Town. This could jeopardize such projects.
Municipal Services District
A quasi-municipal entity, such as an MSD, can borrow money on a tax exempt basis, thus producing certain savings when compared to a private corporate borrower or a non-profit. Its bonds can be backed by its revenue stream and by the value of its equipment ("revenue bonds").
If it is authorized by the State Legislature to do so, it could go beyond using its revenue stream and equipment and backing. In order to issue "full faith and credit" bonds like the Town can, it must be given the power to tax in the legislation that creates it. If it has this power, it can issue tax exempt bonds with the lowest interest rate -- as much as 1% to 2% below what municipal entities without taxing power can borrow at.
There is also one, somewhat complex financial benefit that an MSD might have if the state legislation creating it gave it the power to tax. These taxes could produce benefits to users of the system who own property within the jurisdictional boundaries of the entity. An individual taxpayer cannot deduct the user fees charged by a MSD, such as the cost of a ferry ticket, while that same individual can deduct any property taxes levied by a MSD. If a MSD levied a property tax on property on Chebeague to finance a portion of infrastructure or to subsidize the operating costs of the transportation system, those taxes would be deductible by the owner of that property and, at the same time, would reduce the price of a ticket.
Municipal Transit District
A transit district could issue revenue bonds backed by its revenues and assets. The state legislation enabling the creation of such districts gives them a somewhat indirect power to tax. If they do not have sufficient revenues to pay their bondholders, they can require their municipality to levy taxes to cover the shortfall. This would probably give their bonds rates similar to those of jurisdictions with powers of taxation.
Affiliation with Casco Bay Island Transit District
As a non-profit, tax-exempt entity the joint venture would be able to issue tax exempt bonds, though the reduction in the interest rate is not as great as it is to municipal borrowers. The affiliation with the CBITD could enable the joint venture to obtain capital improvements through the CBITD at the municipal bond rate. Moreover, the CBITD has expertise in the area of public funding for capital needs, an area where all ferries have a difficult time finding money.
Status Quo
With the advent of the federal government's ISTEA (Intermodal Surface Transportation Efficiency Act of 1991) and Maine's STA (Sensible Transportation Act), private firms are more likely to be eligible for government funding, but usually with a municipality as a "partner."
Non-Profit Status
Non-profit organizations enjoy a much greater chance of receiving state and federal funds than do private firms.
Department of Town of Cumberland
The Town and its departments are eligible to apply for and receive federal and state funding.
Municipal Services District
An MSD is eligible to apply for and receive governmental grants.
Municipal Transit District
A transit district would also be eligible for government grants.
Affiliation with Casco Bay Island Transit District
As stated above, non-profits have access to state and federal funds. Moreover, the joint venture's affiliation with the CBITD could enable it to obtain grants from the Federal Transit Administration.
Status Quo
No changes anticipated. The Town has provided a number of major benefits to the CTC as presently organized such as allowing summer people to park at the Town Hall, funding for purchase of Sunset Landing, issue of the industrial revenue bond for the Islander. However, the CTC can be sued by individual citizens as a private company, and gets no legal or financial assistance from the Town in such suits.
Non-Profit Status
The Town of Cumberland would probably be more amenable to working with a non-profit provider of transportation services than it currently is with the for-profit CTC. Some councilors have been reluctant to support CTC in some of their requests, most notably related to parking areas and wharf pilings, because of its for-profit status.
While Yarmouth might be friendlier to a non-profit, it is doubtful that such a shift would greatly alter public opinion or, consequently, negotiating status.
Department of Town of Cumberland
The CTC would become part of the Town government. This would not eliminate conflicts, but they would be "internal", and the managing bodies of the department and the Town as a whole would be intertwined. As a department of the Town, the transportation system would have an improved ability and standing to negotiate with other governments including the Town of Yarmouth and state agencies.
Municipal Services District
An MSD could act with a certain degree of independence from and equality with the Town of Cumberland. As a governmental body it would also be more equal with Yarmouth in negotiations and suits. It is possible that Yarmouth would oppose the creation of an MSD in the State Legislature. For that matter, the CBITD or even the Town of Cumberland might oppose the creation of an MSD. Any local opposition makes the passage of a private and special law difficult.
Municipal Transit District
Officially a transit district would be like an MSD, somewhat independent from the Town. But since the Town would have to create the district, it would seem likely that a mutually acceptable form of organization would help to create good relations. Governmental status would create greater equality in dealings with Yarmouth. The transit district might also be the most favorable organizational form for developing closer working relationships with the CBITD, if that seemed useful.
Affiliation with Casco Bay Island Transit District
Even though it would be a non-profit rather than a public organization, the joint venture would probably be a much more equal player in negotiations with both Cumberland and Yarmouth. Indeed, the board of directors could include representatives of both towns in order to regularize these contacts. The joint venture could also meet some of the financing needs that presently make it dependent on Cumberland through the CBITD instead. Finally, affiliation with the CBITD might take some of the pressure off Yarmouth by allowing the CTC or the CBITD to consider providing some services such as barging from another site.
Status Quo
No changes anticipated. Maintaining the status quo avoids the inevitable tension caused by stirring the waters of public controversy. However, Islanders would continue to have to deal with on-going conflicts with Yarmouth and the uncertainty they produce over ease, or perhaps even the possibility of, access to Chebeague from Cousins Island. The present limited-at-wharf plus off-site parking probably dampens development pressure on the Island.
Non-Profit Status
Non-profit status would more accurately reflect the role of the CTC as a broadly based, "public utility" on the Island. Formal reorganization as a non-profit could enhance CTC image in the eyes of Islanders. Otherwise, this option would have much the same social impact on the Island as the present system.
Department of Town of Cumberland
The impact of becoming a Town department would depend upon whether the CTC continued to be controlled by and responsive to Islanders. If it were, its enhanced ability to call on the Town for financial and other forms of assistance and to deal with Yarmouth as a governmental equal could lead to greater economic and political stability, for the transportation operation and for all the aspects of island life that depend on it. If control by Islanders were significantly reduced, the result in terms of the ferry operation might well not be harmful, but residents might have a more difficult time shaping the nature of the service and, perhaps, the development of the Island.
Compliance with all of the formalities that public status entails might make operations of the ferry and the transportation system more formal, cumbersome and distant. On the other hand, such formality could mean enhanced status for the transportation system.
Municipal Services District
The creation of a MSD would have effects similar to the creation of a Town department.
The power to tax as described on the section on capital expenditures, even if it were not used, and even if it produced benefits such as deductions on the personal income tax, is a potential source of negative feelings.
Municipal Transit District
If a transit district could be created that was controlled by Islanders, then the impacts would, overall, probably be positive. Greater leverage in dealing with Yarmouth and greater ease in dealing with Cumberland would both make the solution of difficult and pressing problems easier. People on Chebeague would also be able to shape their ferry service to serve whatever goals, for example, relative to development, that they chose, possibly with fewer constraints than we feel we face at present.
The greater formality and the stricter standards of accountability that a public organization is subject to might have some negative effects. However, if the organization stayed about the same size, had its base on Chebeague and hired local crews, it might not be very different even if it did have to hold public hearings on major decisions.
The greatest dislocation might come "up front" as residents of the Island try to work out a mutually agreeable form of transit district with the Town of Cumberland. Because ferry service is so critical to the survival of Chebeague as a community, there are old, and often deep, divisions over transportation issues on the Island. These might come to the surface and make compromise difficult. The interests of the Town and the Island are also sure to be different as well.
Affiliation with Casco Bay Island Transit District
A joint venture with the CBITD would require Islanders with long memories to set aside whatever distrust they may have for that operation. The District has similar purposes, expertise in both operations and capital funding, and political presence that could be useful to the CTC. Close relations would also enable joint planning for any new location(s) of wharves or other facilities or services on the Island. However, a joint venture would not involve an indissoluble merger, so the relationship could be approached gradually and even dissolved.
Otherwise, it is not intended to produce significant changes in control over or the nature of the ferry service. Closer working relations might encourage more passengers to come to Chebeague by the Casco Bay Lines. But the joint venture would continue to be responsive to the interests of Chebeague residents. Less dependence on Cumberland and improved relations with Yarmouth might moderate some of the uncertainty that faces the system now.
Status Quo
None.
Non-Profit Status
No legislative requirements. Approval would have to be granted by the Internal Revenue Service and by the stockholders. Stockholder approval is not guaranteed since the Company would have to be dissolved and people would have to either donate their shares to the new non-profit or be bought out at some remuneration-per-share. IRS approval is uncertain given the twenty-plus years of for-profit operation as CTC and the nature of the IRS's very restrictive non-profit/tax exempt requirements. To be fully tax exempt, the IRS requires that an organization be organized and operated exclusively for religious, charitable, scientific, literary or educational purposes. Partial tax exemption can be granted to organizations fostering civic betterment and social welfare. The CTF's expert on non-profit corporations indicates that an application could be prepared that would stand a reasonable chance of success.
Department of Town of Cumberland
The State Legislature would have to be petitioned to adopt a private and special law which would specifically authorize the Town of Cumberland to acquire CTC. That law would also specify the manner in which CTC is to be acquired; e.g. through the purchase of all stock in the corporation.
The Town could be empowered to borrow sufficient funds to finance the acquisition of all equipment, routes, etc. from CTC. Proceeds from that financing would be remitted to CTC in exchange for its fixed assets. The purchase price would be determined at fair market value. The stockholders of CTC would be asked to authorize the sale of substantially all of its assets. Thereafter, the cash balances would be used to repay all debt and any remaining cash would be used to liquidate the stockholders. Based on the present financial position of the Company (and assuming that the book value of assets reflect fair market value), each share of stock would be liquidated at approximately $45.00 or $350,000 in the aggregate.
Municipal Services District
As with a municipal department, creation of an MSD requires state legislative approval and then approval by the Governor. As indicated earlier, the state legislation would specify the structure of the organization and its operating, and, possibly, taxing powers. It would also specify if and how the assets of the CTC would be transferred to the new organization. If this legislation were passed and signed, then the voters of the MSD would vote to decide whether to proceed with establishing the organization.
Municipal Transit District
One of the major benefits of the transit district option is that it does not require state legislation. The state has a law 30-A M.R.S.A. section 3501 (et seq) that provides authorization to municipalities that wish to create transit districts and lays out guidelines for their organization and operation. The Town of Cumberland could enact a Town ordinance to establish such a district to provide transportation services to Chebeague. Attached as Appendix D is a copy of the state law. Appendix E consists of initial drafts of such an ordinance and possible bylaws for a Town of Cumberland Transit District.
Affiliation with Casco Bay Island Transit District
It seems likely that no state legislation would be required for the CBITD or the towns involved (including the City of Portland) to become members of the joint venture company. The municipalities would have to pass local legislation to authorize participation. However, it is possible that one or all of these entities might insist on state legislation which would make the process considerably more complex.
Since the joint venture would be a non-profit organization, it would need to apply for tax exempt status from the IRS. As described above, this is not a simple matter, but at least partial exemption would have a good chance of acceptance.
The Community Transportation Forum has made a good faith effort to consider how the Chebeague "inner bay" ferry service should be organized so that it best serves the interests of the residents of Chebeague who depend on it. We have thoroughly discussed a wide variety of options and have agreed to a "middle-of-the-road" alternative that would retain control in the hands of Islanders, but give us more leverage for dealing with other political bodies and jurisdictions that have power over our operations.
For the CTF, this report marks the end of a process of discussion that has taken a year and a half. But in many respects, we hope that this is simply the beginning of a larger process of debate by Islanders and stockholders and of discussions with the Town of Cumberland. We want this debate and discussion to be held. It may be difficult at times and will probably take at least as long again as our deliberations took. However, the members of the CTF are all convinced that this is not just a "factional" issue about the organization of a private company that happens to provide ferry service to the Island. The CTC is one of Chebeague's central "public" services. It makes sense to adjust its organizational structure to more clearly reflect this reality and to give us the power and leverage needed to deal with the uncertainties we face.
Option 1:
Retain For-Profit Status (Do Nothing)
Summary:
CTC was founded as a for-profit company and this option would maintain the status quo. There would be no changes of any nature in the way CTC is organized, or in the way it relates to the communities which it serves.
Procedure:
In order to formally close the issue, the Board of Directors would adopt a resolution that "maintains for-profit status until such time as the Board of Directors recommends otherwise."
Advantages:
Disadvantages:
Option 2:
Apply for Non-Profit Status
Summary:
This alternative involves creation of a non-profit corporation under state law and asking the IRS to recognize the non-profit classification as tax exempt. CTC could then transfer its assets to the non-profit tax exempt organization and liquidate. This is the "do-it-yourself" method of going to non-profit, as opposed to the "third-party" approach, which would involve forming a new non-profit organization, which would then assume responsibility for improvements to the transportation infrastructure such as vessels and wharves that might be used by CTC. It was decided to explore the "do-it-yourself" approach rather than "third-party" because "third-party" is very similar to the Municipal Services District, but without as many benefits.
If successful, the result would be a change from for-profit to non-profit status without any discernible differences in operations.
Procedure:
First, a stockholder meeting should be convened to obtain input and direction. Assuming that the results favored such a move, the issue would come before the stockholders at the annual meeting in July. A detailed proposal would have to be prepared for evaluation by stockholders spelling out how the conversion would work and what would be asked of stockholders regarding approval of a transfer of the Company's assets to a tax exempt organization and a subsequent liquidation.
If the stockholders approve the proposal, a non-profit corporation would be incorporated and an application would be filed with the IRS. This is described as a "lengthy process," and by no means has a guaranteed outcome. The support of the community and Town would probably assist in the process.
Advantages:
Disadvantages:
Option 3:
Become Department of Town of Cumberland
Summary:
The best analogy for this option is Valhalla Country Club. CTC would become a part of municipal government, supported by the taxes raised by the Town. Operations would be of a zero-balance nature (would not lose money) and as long as this were true, operations could be fairly independent and autonomous.
Procedure:
First, a stockholder meeting should be convened to obtain input and direction. Assuming that the results favored such a move, we would begin negotiations with the Town of Cumberland.
One item to be considered would be how stockholders would be reimbursed for their shares, with the range being from zero dollars to some multiple of the current selling price.
Also of concern would be how the assets of the Company would be transferred to the Town and whether the new CTC would lease these assets back and generate revenues therefrom or simply operate them under contract with the Town. Management structure of the new CTC would also have to be determined.
Of great concern would be the size, structure, and method of selection of the governing board. It would be possible to seat a Yarmouth representative on this board as well as mainland Cumberland people. The number of Chebeague representatives would determine the degree of islander "control" over the Transportation Department.
The issue would then come before the stockholders at the annual meeting in July. Given the negotiations required, this may not be until 1994, unless a special meeting were called earlier. A detailed proposal would have to be prepared for evaluation by stockholders spelling out how the conversion would work and what would be asked of stockholders regarding their shares of CTC stock.
If the stockholders approve the proposal, the issue would then have to go before the Town Council, although it may be decided that Council approval is needed before stockholder confirmation. This option may require State of Maine legislation to enable the Town to engage in transportation operations.
When all are in agreement and any legislation is signed, CTC would be dissolved and the Town of Cumberland would begin ferry operations.
Advantages:
Disadvantages:
Option 4:
Create Municipal Services District
Summary:
Under this scenario, CTC would assist the community in organizing a municipal services district, whose charge would be to provide for Chebeague's transportation needs, which could be broadly defined to include:
Providing improved public facilities on Chebeague and on the mainland, both for automobile parking and for landing vessels.
Acquiring vessels and vehicles for use in providing transportation services.
Participating in other projects which might serve Chebeague's transportation needs.
At least initially, CTC would continue to operate as it has in the past with the municipal services district providing support for the Company in the way of capital projects. At some later point, if it would be advantageous to the Company, the municipal services district could absorb CTC either completely or by leasing services from the Company.
In no way would this municipal services district be in competition with the Casco Bay Island Transit District. Its mission would be clearly defined to be maintaining existing transportation services to Chebeague and improving upon their efficiency.
In order to work, this alternative should have the support of the Town of Cumberland. This could be seen as a compromise between turning CTC over to the Town and trying to accomplish capital projects on a totally independent basis. From the Town's point of view, such a district could be seen as shifting CTC costs to the ultimate users, while empowering those users to bear those costs in the most economical way possible.
Procedure:
First, an open public meeting should be convened to obtain input and direction. This meeting would be organized and conducted by a group of Chebeague citizens, including CTC leaders. Assuming that the results favored such a move, we would seek support from the Town of Cumberland.
A committee would then draft enabling legislation for the municipal services district. Since this approach is so flexible, many options will have to be considered and consolidated into a working framework for the municipal services district. As is the case with the Town Department option, the governing Board could include officials from CTC, the Town of Cumberland, the Town of Yarmouth, and the Casco Bay Island Transit District, as well as from the citizenry at large. More public input may be desired during the process.
Enabling legislation would then be presented to the Legislature in late 1993 by one of our representatives. Depending upon whether taxation powers are sought for the municipal services district, the legislation might or might not call for a referendum among Chebeague's voters.
Assuming success in the Legislature and any possible referendum, the municipal services district would then come into being.
Advantages:
Disadvantages:
(from the minutes of the meeting)
94-40 To hear request of Community Transportation Forum Committee.
Councilor Varney explained that this item was tabled from the last meeting due to absent councilors.
Jim Phipps, committee member, explained the background of the committee and its request.
Phil Gleason arrived - 7:42 pm.
The Chairman also reviewed the recommendation from the Town Attorney, Ken Cole, regarding this request.
Councilor Storey moved that the Cumberland Town Council commends the work of the Community Transportation Forum in its efforts to study the long-term transportation needs and related mainland access issues of Chebeague Island.
Councilor Small seconded.
Councilor McGinty amended the motion as follows: That the Cumberland Town Council commends the efforts of the Community Transportation Forum and endorses the concept of seeking additional input to the study of the long-term transportation needs and related mainland access issues of Chebeague Island.
Councilor Varney seconded. Vote: Unanimous (7) Vote on main motion as amended: Unanimous (7).
TABLE 3
11/19/94
"The Community Transportation Forum (CTF) recommends pursuing the creation of a Town of Cumberland transit district, a quasi-municipal body, organized under 30-A M.R.S.A. '3501 et seq., in order to ensure continued, safe, reliable, affordable and locally controlled transportation services for the Chebeague Island community."
Resolution passed November 5, 1994
Reaffirmed November 16, 1994
General Description: A self-supporting transit district which is a quasi-municipal body locally controlled by the Chebeague Island community could be created by vote of the Cumberland Town Council, without need for new legislation or further regulatory or legislative approval. This brief summary will outline the anticipated structure of the Town of Cumberland Transportation Commission (TCTC) as envisioned and recommended by the CTF.
Purpose: To maintain local control and cooperate in doing all things necessary to furnish waterborne transportation to and from the mainland and Chebeague Island, including incidental tour and charter, barging, other forms of transportation and services on Chebeague and the mainland for public purposes in the interest of public health, safety, comfort, and convenience of the inhabitants of Chebeague Island.
Governing Body: A board of seven voting directors and two non-voting ex-officio directors will be the municipal officers of the Commission and shall have general charge of its affairs and setting of policy. The CTF recommends the following composition of the Board of Directors:
- Three must be residents of Chebeague Island
- Two must be residents of the Town of Cumberland
- Two would not have a residency requirement
Voting directors will serve three year terms with a maximum of three consecutive terms. The CTF recommends that the Cumberland Town Council designate the current Board of Directors as the Nominating Committee to fill vacancies as they occur on the Board of Directors. It is anticipated that new directors will be proposed in a public process prior to the Annual Meeting. The public will select the nominees (in person or by proxy) at the Annual Meeting, one vote per person. Final appointment of the Board shall be by vote of the Cumberland Town Council.
Meetings: Regular meetings of the Board of Directors will be held on Chebeague Island. Proper public notice of the meetings will be published and posted. Meetings will be open to the public.
An annual meeting will be held on Chebeague in July to select nominees for directors and address other matters as they may arise. Changes in By-Laws must be approved by the Board of Directors at the Annual Meeting.
Powers: The Board has the power to own and operate any and all assets necessary for operation; to fix routes and fares as necessary.
The Commission may acquire the assets and/or stock of the Chebeague Transportation Company (CTC). During a transition period, it may lease CTC vessels and buses.
Management: The Board of Directors may hire a general manager; the Board may reserve the right to establish pay and hire specific employees.
The Commission shall base its operations on Chebeague Island, coordinating certain services and administrative functions with the Town of Cumberland.
Budget: The budget will be prepared by the Board of Directors and submitted to the Cumberland Town Council for review.
Borrowing: The Commission can issue tax-exempt bonds by vote of Directors. They will not be obligations of the Town.
Taxes and Regulation: As a political subdivision, the Commission is tax exempt from sales taxes, property taxes, excise taxes, income taxes, regulatory fees, etc.
Long-Range Planning: The CTF recommends that the Board of Directors maintain communications with and solicit input regarding long-range planning from the Maine Department of Transportation, the Casco Bay Island Transit District, and other political subdivisions, such as the Town of Yarmouth. The Commission will engage in a joint planning process with other regional transportation providers when seeking state and federal funding for capital equipment.
Process: The CTF recommends the following events for implementation of the TCTC:
TABLE 4
West Midwest East
1. Decatur Island 6. Drummond Island 10. The Cranberries
2. Guemes Island (Sault Ste. Marie) 11. Chebeague Island
3. Lummi Island 7. Beaver Island 12. CBITD
4. Anderson Island 8 Washington Island 13. Shelter Island
5. Puget Island 9. Madeline Island 14. Fire Island
15. Bald Head Island
TABLE 6
This review of organizational options was conducted within the framework of objectives developed by CTC in a January, 1993 workshop. A list of objectives CTC should have in any re-organizational efforts was generated and then rank-ordered in order to establish priorities. The results, representing the input from the attendees at the workshop, are reproduced below:
Overall Average
Rank Objective
Rank
1a Provide high quality service 2.3
1b Keep rates down 2.6
2 Maintain autonomy and control 5.4
3 Improve image 6.2
3 Support organization which represents Chebeague 6.2
4a Improve equipment 6.6
4b Be eligible for state and federal funding 6.7
4c Improve infrastructure (wharves, parking) 6.8
4d Improve municipal relations (Cumberland, 6.9
Yarmouth)
5 Minimize tax burden to Company 8.1
5 Minimize interest costs to Company 8.1
TABLE 7
Prepared by Greater Portland Council of Governments
February 22, 1995
| Importance of: | Island Ferry System | to Portland |
Stone Wharf |
| Very Important | |||
| Somewhat Important | |||
| Little Importance | |||
| Not Important | |||
| Total responding |
Uses for Stone
Pier:
| Parking |
Barging |
Fishing | |
| Very Important | |||
| Somewhat Important | |||
| Little Importance | |||
| Not Important | |||
| Total responding |
A total of approximately 735 people responded to the survey, 108 of whom were from Chebeague (34 year-round, 74 seasonal residents).
For more information, call CTC at 207-846-3700 or send e-mail to: ctc@nlis.net.
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