City of Mackinac Island achieves its goals of lower ferry ticket prices and competition

MACKINAC ISLAND, MI - Spokespersons for the City of Mackinac Island said today that the Island Community has achieved all three of its main goals in its oversight of the ferry boat service to the Island. The City of Mackinac Island has been attempting to obtain lower ferry rates or at least price competition in ferry boat ticket prices. The city has also sought to improve service by having later evening boat service and by assuring the 520 Island residents of service during the off-season months. At a city council meeting held on Wednesday, February 9, 2011, the city received commitments from all three ferry boat companies to provide service during the off season months and to provide more hours of ferry boat service during the regular tourist season. In addition, two of the ferry boat companies, Arnold Transit and Star Line, agreed to reduce their ticket prices by $2 per ticket. An adult roundtrip ticket on Arnold Transit or on Star Line will now cost $22 rather than the $24 charged by all three ferry boat companies last year. Shepler's, Inc. stated that it would continue to charge $24 per adult roundtrip ticket. "We are delighted that the city was able to accomplish all of its goals," said Mackinac Island Mayor Margaret Doud," including lower ticket prices, price competition among the ferry boat companies and guaranteed winter service for the Island residents." The mayor added that "for the first time in living memory, there is actual ticket price competition among the ferry boat companies." Michael Cavanaugh, an attorney with Fraser Trebilcock in Lansing, representing the city, added, "the real irony is that Shepler's, Inc. has filed a petition with the Michigan Public Service Commission asking the MPSC to enter an order prohibiting its competitors from charging less than $24 for an adult roundtrip ticket or to otherwise lower their rates." Cavanaugh also said that it is ironic that Shepler's, Inc., a company that has been claiming that it is all for free enterprise and free competition has gone to the state government to ask the state government to prohibit competition and to require the public to pay the same old high prices." The city's attorneys believe the city, rather than MPSC, has the authority to regulate the ferries. The charter of the City of Mackinac Island, which is a grant of authority from the state legislature to the city, provides that the city is empowered "to establish or authorize, license and regulate ferries to and from the city, or any part therein, or from one part of the city to another, and to regulate and prescribe from time to time the charges and prices for the transportation of persons and property." The city charter also authorizes the city to charge a franchise fee to the ferry boat companies. At the city council meeting on February 9, 2011, the city council asked each of the ferry boat companies what they believe would be a fair and reasonable franchise fee. Both Arnold Transit and Star Line replied that 9% of gross revenues was a fair and reasonable franchise fee for the right to operate a ferry to and from the city. Arnold Transit and Star Line also said that the ferry boat companies could afford to pay the 9% fee while still reducing ticket prices. Shepler's, Inc. proposed that the city charge a 2% franchise fee. The city council did not adopt either position and instead set the franchise fee at 7%. The franchise fees are paid in to the city's general revenue fund, which is used for the city's infrastructure, including police and fire protection, water and sewage, and a medical center, that can accommodate more than 750,000 visitors per year. The City of Mackinac Island is unique in that it has only about 520 year round residents, but must provide facilities to accommodate as many as 20,000 visitors a day during the tourist season. Published: Mon, Feb 21, 2011