PSC staff urges cut in pilots' raise Bay captains sought 33% rate increase

August 16, 1991|By John H. Gormley Jr.

Arguing that Chesapeake Bay pilots have not reduced their ranks to match declining ship traffic, the staff of the Public Service Commission has recommended that they be granted less than half the 33 percent rate increase they are seeking.

"Simply stated, there are too many active pilots relative to the number of vessels calling at the port," Calvin L. Timmerman, a PSC economist, said. His written testimony, dated Aug. 12, was submitted as part of the Association of Maryland Pilots' rate case that is due for a hearing in Baltimore next Thursday.

Mr. Timmerman cited statistics showing that just under 2,300 ships visited the port last year, down 20 percent from 2,800 in 1985. Meanwhile, the number of pilots declined only 8 percent over the same period, from 86 to 79.

As a result, the number of ships handled per pilot declined from about 33 per year in 1985 to about 29 last year.

Last year, the pilots made about $100,000 a year before deductions for benefits and insurance, according to Capt. Michael R. Watson, president of the pilot's association. Based on current business levels, the PSC staff recommendations would give individual pilots an estimated annual income of $142,560, provided six pilots were cut from the ranks.

To fund that raise, E. Matthew Faulhaber, a PSC auditor, recommended that the pilots be granted a 14.56 percent increase over two years, rather than the 32.9 percent over three years requested by the pilots. Mr. Faulhaber said that the smaller figure would be adequate to compensate the pilots if they reduced their ranks by the six members suggested by Mr.Timmerman.

The pilots, as members of a professional association, share equally in the profits of their organization. There are three ways the individual income of the pilots can be increased: more ships coming to the port, increased rates, or fewer pilots to share in the profit pool.

The pilots want to achieve their raise simply through raising rates. The PSC staff wants to fund the pay increases through a combination of a smaller rate increase and fewer pilots. The PSC contends that would have the added benefit of keeping port costs competitive and attracting more business.

Mr. Timmerman reasoned that while the pilots deserve to recoup income they have lost to inflation since 1985, they should not be paid more in real terms for doing significantly less work.

Captain Watson, the pilots' association's leader, insisted yesterday that his group has done a good job of keeping its size in line with the amount of business in the port. He said that his members carry a greater workload today than pilots at most other East Coast ports, and he disputed the wisdom of a drastic reduction in the size of his organization.

"You can't just go, 'Puff the Magic Dragon,' and do away with 10 pilots," he said.

When a pilot retires, he still receives one-third the share of an active pilot. Therefore, nine pilots would have to retire to reduce the number of full shares by six as proposed by the PSC staff, he said.

A table included in the PSC staff testimony shows that pilots at other East Coast ports earn anywhere from $359,000 a year in Port Everglades, Fla., to $105,000 in New York. In Norfolk, Va., the prime competitor of the port of Baltimore, pilots earn $175,000 a year. Under a recently granted rate increase, that figure will rise to $192,500.

Captain Watson said that his members grossed about $100,000 last year. After deductions for such things as retirement, medical benefits and insurance, their net pay was about $75,000, he estimated.

"We are at the bottom of the list. Nobody disputes it," Captain Watson said.

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