The Suffolk Legislature has approved a new rate structure for a small but critical ferry service on the East End, the South Ferry Company Inc., which links Shelter Island to North Haven.

The increases, the first for the company since 2008, boost rates at varying percentages -- between 7.69 percent and 20 percent -- and for the first time add a $1-per-passenger fee for cars, although Shelter Island residents would be exempt.

The legislature's budget review office recommended approving the rate hikes -- the vote Tuesday was 17-0 -- after the South Ferry Company argued that rising fuel costs and declining ridership led it to operate at a loss in 2010 and 2011. The increases go into effect once County Executive Steve Bellone signs the legislation.

The only way Shelter Island residents can leave their small town is by ferry, and the rates are heavily weighted in their favor. The price of a 10-ticket book for town residents goes from $52 to $60, or $6 a trip. For nonresidents, the price of a single round-trip ticket rises from $15 to $17, and a 10-ticket book from $70 to $80.

The two ferry companies serving Shelter Island -- North Ferry and South Ferry -- create a link on State Route 114 from Greenport to the Hamptons, and carry a substantial percentage of the car and truck traffic between New England and the Hamptons. Cross Sound Ferry officials say thousands of cars from New England can use South Ferry on a busy weekend.

South Ferry president Cliff Clark told the legislature that it was vital to approve the new rates to cope with summer traffic. "This is very important to us. We had no wiggle room this year," he said.

South Ferry Company has an elaborate rate structure, with 16 categories and 52 different rates, and the new fares affect 84 percent of ferry sales, according to the budget review office. There is one rate reduction -- the 30-trip nonresident passenger ticket book drops from $25 to $22; the 30-trip resident passenger package remains $17.

The new rates are expected to bring in $820,000 a year, based on the company's 2011 revenue of $4.46 million. Much of the extra money will go toward the company's five-year capital plan, a $1.3 million proposal that includes rebuilding the ferry ramp and increasing parking at North Haven, installing a fuel tank and buying a backup ferry engine.

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