2018-10-06 / News

Winter Passenger Service Agreement Reached After Months of Negotiations

By Stephanie Fortino

After the old winter ferry service contract expired this year, Star Line and the City of Mackinac Island finally signed a new five-year agreement in late September, only weeks before the Thursday, November 1, deadline. The agreement is crucial because the city allows only one boat company to ferry passengers after that date. After months of attorneys negotiating, Mayor Margaret Doud called a Transportation Committee meeting Wednesday, September

26, to correct several issues the city had with the contract, which the council approved later that evening.

Two weeks before, September 12, city attorney Tom Evashevski informed council that the agreement they thought they approved in the spring had not been finalized. Star Line CEO Jerry Fetty and the company’s attorney, Jim Murray of Plunkett Cooney, met with the committee to clarify the changes they made to the contract. The final version was completed just minutes before the council meeting began.

Star Line has provided winter ferry service since 2016, when it purchased the passenger assets of Arnold Transit Company and took over Arnold’s winter service agreement with the city. Now that that contract has been fulfilled, September 12 the council signed an agreement with Star Line and Shepler’s to formally terminate the old franchise with Arnold Line. The freight portion of the old Arnold Line is still operating, under the name Arnold Freight.

According to the city’s ferry franchise, all companies that provide passenger service must pay a total of $600,000, increased annually according to the consumer’s price index and divided evenly between the companies. The winter ferry service operator receives a $100,000 discount, adjusted for the consumer’s price index. For the 2017- 2018 season, Star Line received a $106,763 credit, and adjustments will increase from that amount.

Special rates are offered to Island residents, and the definition of a resident was one issue under discussion.

At the September 12 meeting, Mr. Evashevski said Star Line wants the city to determine the criteria for defining an Island resident. The company referenced the city’s Cemeteries Ordinance to define who qualifies as an Island resident. That definition has since been amended, however, becoming much more re- strictive.

Councilmember Anneke Myers said it is not appropriate for Star Line to use the Cemeteries Ordinance definition of resident. The ordinance is intended to limit who can purchase burial plots because the cemeteries are filling up.

Councilmember Kay Hoppenrath agreed that the city should not have to define who is a Mackinac Island resident for the purposes of ferry rates, saying that responsibility falls to Star Line.

Some suggestions for defining residents included those who pay property taxes on the Island, although some taxpayers don’t live on the Island and not all residents own property. Another was to define those who have Mackinac Island listed on their driver’s license or state identification cards as residents.

Resident passes are significantly discounted, and many who travel to the Island regularly often try to qualify. The resident passes can be used year-around. Star Line resident passes cost $245 for adults and $150 for children and provide an unlimited number of crossings.

Commuter passes, which cost $655 for unlimited travel and last through April 20, 2019, will be accepted during the winter, but commuter pass holders must also pay the $5 surcharges each way.

Individual commuter passes are also sold. Books of winter commuter tickets cost $410 for 40 one-way trips and $235 for 20 one-way trips. Winter commuter tickets do not require surcharge tickets.

Summer commuter tickets, however, will also be accepted, but require $5 surcharge tickets, too.

At the committee meeting, Mr. Murray, the Star Line attorney, noted that the only place the city defines a resident is in the Cemeteries Ordinance, noting he mistakenly used an outdated version. He contended a definition of an “Island resident” should be included in the ferry franchise agreement, saying a court would not uphold the term if someone challenged the city. But Mr. Evashevski said the city would not consider amending the ferry franchise, as it has another 15 years left and also affects Shepler’s Ferry, the other passenger line to serve Mackinac Island.

Mr. Murray explained that Star Line is trying to “avoid abuse” of the discounted resident passes. Mr. Fetty said it is difficult for the boat company to determine who resides on the Island, adding people often get upset when they’re denied the cheaper passes. He believes only people who live on the Island year-around should qualify for the passes, although committee members note that some members of the community leave for a month or few months during the winter.

Summer workers, especially international workers who use the H-2B Visa program, should not qualify for a resident pass, Mr. Fetty continued. People who live on the Island seasonally can purchase commuter ticket books or other lower-priced worker tickets that are available on the Island for $17 round trip. And because the resident passes allow for unlimited trips to the mainland, Star Line operates at a loss when people go back and forth frequently with a resident pass, he continued.

Mr. Fetty added that international workers shouldn’t be allowed to have resident passes because they aren’t citizens of the United States.

While some questioned whether Island property owners like Mr. Murray, who pay taxes, but don’t live here year-around, should qualify for resident passes, Mr. Fetty said he would give Mr. Murray the discounted resident pass.

Audience member Sue Sisson asked, “Would the city support giving an Island resident pass to Jim [Murray], but not an H-2B worker or someone who’s here for six or eight months?”

Councilmember Dennis Bradley challenged the notion of paying property taxes as the best way to establish residency, saying, “I own property in St. Ignace, but I’m sure not resident over there.”

Councilmember Myers also noted there are many people valuable to the economy, such as dray drivers, who only live on the Island for about eight months of the year. The intent of the resident passes should be to alleviate the cost of living on the Island, she said.

One of the solutions Star Line proposed was requiring people to get an affidavit or some type of proof from the city confirming they reside here. While she understood Mr. Fetty’s concerns, Mrs. Myers said she did not want the city clerk or other city staff to be inundated with people seeking proof of residency.

Nobody on the committee thought the city should determine boat ticket residency.

“We don’t want them to come here to scream at us if they get denied,” Mrs. Myers said.

Councilmember Andrew Mc- Greevy noted there is no requirement for the boat lines to offer cheaper passes for Island residents, and thus no requirement for the city to define the parameters by which Star Line sells its passes. He and the other committee members are thankful for the discounts, they agreed.

Council members also questioned why the process had to be changed, saying it was simple, in their experience, to acquire a resident pass. Mr. Bradley said he only had to show his old resident pass to get a new one, while Mrs. Myers said she had to show her driver’s license and a utility bill to qualify.

In the past, the city questioned the residency requirements imposed by the boat lines. When the companies required people to show a voter identification card, there was an influx of hundreds of voters, Mrs. Myers said. Voter registration ballooned from about 500 voters to nearly 1,000, which threw off population metrics, which she wants to avoid in the future.

The city has deferred to the boat lines how best to determine residency for their purposes, Mr. Evashevski said, but Mr. Murray argued that Star Line wants to avoid ambiguity. The winter service contract now contains the best definition possible, Mr. Evashevski continued, putting the burden on the passenger to provide adequate documentation for proof of residency.

The contract now states that people seeking resident passes must “produce satisfactory documentary evidence of such residence by way of a driver’s license, voter identification card, utility bill, or other similar evidence.”

People can also acquire an affidavit of their residency on the Island if they cannot provide those documents.

The contract also states, “The city agrees to support compliance with the ‘Island residency’ requirement and the rates applicable to Island residents and allow Star Line reasonable discretion in its enforcement.”

Councilmembers also took issue with another portion of the proposed contract, which Star Line amended from the old agreement the city had with Arnold Line.

As the Arnold Line contract stated, the city may terminate the winter passenger agreement if Star Line goes bankrupt or undergoes a receivership proceeding.

But the company added to the contract, “Star Line may also terminate this agreement if [the city] (a) grants any other contract for winter service (b) creates a transportation authority for the city or (c) ceased to retain jurisdiction over the ferry boat services.”

The council agreed that the contract should not include an option for Star Line to cancel the contract if a transportation authority is created, especially since it is in the process of establishing such an authority this winter. The transportation authority would oversee freight operations and qualify for transportation grant opportunities. The city is also still actively trying to purchase the Coal Dock, which city officials envision would be used as a hub for the transportation authority.

Mr. Murray clarified that Star Line thought the transportation authority would allow the city to provide winter passenger service. The contract was amended to state that Star Line can terminate the contract if the city allows another company or a transportation authority to ferry passengers during the winter. The committee members agreed to those changes.

The agreement is posted on the Town Crier website under Ferry Franchise Documents.

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