Meeting To Set Ferry Franchise Fee Postponed to March 1

A meeting between the three passenger ferry companies and the City of Mackinac Island to renew the ferry boat franchise fee has been rescheduled for Tuesday, March 1. City Council rescheduled the meeting at its regular meeting Monday, December 20.

Both sides met in September to discuss the expiration of the 20-year-old contract, which expired in October, and the city then scheduled a final meeting for January 1, 2005, to renew the contract. Because many key representatives are absent during the off season, the meeting was pushed back to March, when the boat companies begin to prepare to reopen for the new season.

The ferry boat franchise fee regulation stipulates that Star Line, Shepler’s Mackinac Island Ferry, and Arnold Transit Company pay 1.5 percent of their gross passenger ticket income to the city. The city uses that money to provide added city services to meet the needs of thousands of visitors, such as police, fire, and utilities, which otherwise would have to be supported by property taxes or another form of user fees.

The agreement’s lifespan of 20 years, said Michael Cavanaugh, one of the city’s attorneys, was a reasonable time after which all the parties can review and update the franchise to reflect current social and economic issues.

During the September meeting, representatives from all three boat companies asked that the percentage be lowered to at least half the current amount to reflect the slow economy. The boat lines argue that fewer tourists and higher fuel prices and insurance costs should be included in determining a percentage for the new ferry boat franchise fee. As passenger revenue drops, the city, likewise, will receive less franchise revenue to support the services it provides to visitors, even as its costs rise.