Mayor Bill de Blasio's plans to allocate more money for the city's ferry system may be dead in the water, after a review of the proposed procurement contract by the city's top fiscal watchdog found it to be "needlessly expensive" and shrouded in secrecy.
Under the terms of a contract that was set to be signed next month, the city had intended to spend $82 million to purchase the fleet of 19 boats that it currently leases from Hornblower Cruises, the operator of the heavily-subsidized NYC ferry system. But this week, NYC Comptroller Scott Stringer provided City Hall with an extensive list of questions about the contract, and promised to block the deal until his concerns were addressed.
"The Hornblower procurement has suffered from profoundly poor levels of disclosure, as well as a series of seemingly inexplicable decisions that are proving to be needlessly expensive to taxpayers," the comptroller wrote in the letter, which was addressed to Economic Development Corporation President James Patchett.
Chief among those inexplicable decisions, says Stringer, is the fact that the city is moving to purchase the boats while still allowing Hornblower to keep all revenue generated from riders—up to $1.6 million in monthly fares—until ridership increases significantly. Such an arrangement, he wrote, "would appear to be the worst of both worlds."
The contract contains other head-scratching quirks, the Post found, including: the assurance that Hornblower get 50 percent of revenues after ridership exceeds 5.5 million, upped to 75 percent once ridership hits 6.5 million; and a provision that allows the company to keep all revenues from advertising and food sales, even once the city owns the vessels.
Asked on Thursday about the rejected contract, and whether his commitment to the ferries was coming at the expense of more pressing transit needs, the mayor grew visibly frustrated, saying that this was "probably the 26th time" he'd answered the question.
"Dear friends in the media: help be visionary," he continued. "We're starting a whole new form of mass transit. Anyone who wants to say, 'Don't start a whole new form of mass transit, what we got now is enough,' come on into the subways with me and I'll prove to you it's not enough."
He added that "the ferry is already tremendously popular, it's serving a lot of places that are transit deserts, like the Rockaways." (The Rockaway ferry stop is .2 miles from the A train).
In his letter, Stringer also questioned the ongoing lack of transparency surrounding the ferry's ridership, costs and other performance metrics—a consequence of the system having a private operator, which is not subject to the same disclosure requirements as a city-run agency. Notably, the city's development corporation has refused to make ridership data available, even as numerous reporters have filed public records request for that information.
Despite the lack of public info, we do have a general sense of just how much money the city has funneled into its rapidly-expanding ferry routes. According to the comptroller's analysis, total taxpayers dollars spent on the ferries have ballooned to more than half a billion dollars since the program was first announced by de Blasio four years ago. After several new routes were unveiled last year, the system's annual operating budget increased to $44 million, while per-rider cost to the city grew to $8.96. Those who ride the ferries pay $2.75, the same as a MetroCard.
For years now, the size of that subsidy has frustrated transit advocates and other ferry-skeptics, who note that the ferries' annual ridership is less than the number of people the subways carry on a daily basis, and less than even the least used bus routes. And as Joe Cutrufo at Transportation Alternatives points out, "Bike share moves more than three times as many people as NYC Ferry, yet its annual subsidy from the city is $0."
While the city has refused to release demographic data, an investigation into who is riding the ferries suggested that those benefiting from the generous subsidy are, by and large, higher-income New Yorkers and tourists.
A spokesperson for the EDC did not respond to Gothamist's request for comment.
Additional reporting by Lydia McMullen-Laird.
UPDATE: After this story published, a spokesperson for the EDC provided Gothamist with the following statement: “As we add new routes and more boats, purchasing these vessels outright will ultimately save more than $140 million over five years. That’s a significant savings, and worth the one-time expense to support the heavily utilized transit service.”
They city currently pays Hornblower $682 per hour to operate the boats. Assuming the 19 boats would run an average of 3,000 hours a year, it would cost $224.4 million over five years to operate the fleet if it wasn't purchased, according to the spokesperson.