Ferry operator sues pilots, city over fee increase in Portland Harbor

Ferry
Courtesy Timothy Valentine
The Cat maneuvers at the pier in Portland Harbor in August 2016. The Bay Ferries vessel is the former Alakai, which served in the Hawaii Superferry fleet from 2007-2009.

The company that operates The Cat ferry between Portland, Maine, and Nova Scotia is suing to fight a pilotage fee increase it says will unfairly bump up its operating costs by nearly $100,000 a year.

Bay Ferries Ltd., based in Charlottetown, Prince Edward Island, filed a lawsuit in August in Cumberland County Superior Court against Portland Pilots Inc. and the Portland Board of Harbor Commissioners. The ferry operator contends the board approved a rate increase for smaller ships without giving proper legal notice to the affected parties and the public, and without sufficiently explaining the reasons for it.

State law requires Bay Ferries to use a pilot licensed by the harbor commission each time The Cat enters and exits Portland Harbor.

The suit followed the commissioners’ vote on May 11 to increase the fees that pilots operating in Portland Harbor may charge Bay Ferries from $709 to $1,200 each way for the near-daily trips between Portland and Yarmouth, Nova Scotia. Combined with about $300 in unrelated fees per trip, this would bring the round-trip cost to $2,700, said Harold Pachios, a Portland lawyer representing Bay Ferries.

“We challenged this,” Pachios said in early December. “The whole hearing to determine a just and reasonable rate in May took just four and a half minutes. We asked the court to review how this was done. The question to be answered is whether the decision of this governmental body was an abuse of governmental discretion and whether it was arbitrary.”

On Nov. 16, harbor commissioners met and determined that their May fee actions were legal, but also voted to somewhat reduce the increase, said commission Chairman Tom Dobbins. Pachios called the $100 reduction an attempt to “make it (the additional vote) look good.” The fee increase will take effect in mid-January.

Dobbins said he can’t talk about particulars of the pending court case, but said the commissioners take great issue with Bay Ferries’ contention that proper legal notice wasn’t given ahead of the commission’s May meeting. And, he said, commission members have gone to exhaustive lengths to provide information about why rates need to go up.

“We looked at the other ports all up and down the East Coast, from the Canadian border to Rhode Island. Shipping has gone way down, income has gone way down and expenses have gone up,” Dobbins said. “It costs more to operate a boat. Rates at most places have gone up. These new rates put us in line with other ports with the same travel distances, time the pilot is aboard, etc. You name it, we looked at it. We didn’t look at profits. We looked at fair and reasonable rates based on higher expenses.”

The commissioners’ November decision will prompt another court action, with Bay Ferries asserting that the decision “was arbitrary and capricious in that, among other things, it is impossible to know if a rate increase is just and reasonable if you do not know what the monopoly is making right now,” Pachios said.

He noted that Bay Ferries has repeatedly asked the commissioners to better justify the fee increase by providing records of the pilots’ income and expenses.

“We want to know why they need the money, and we still don’t know,” Pachios said. “I’m amazed at this. In all my years of practicing law, I’ve never seen anything like this.

“Under the old rate, Bay Ferries would’ve paid $300,000 a year to pilots. Under the new rate, it’s almost $400,000. They’re getting squeezed by the pilots, and they’re reacting,” he said. “If you need to hit us up for another $100,000, you are obligated to tell us why. And they won’t tell us, and they won’t tell the public.”

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