(The Center Square) – New York City has been asked to find a new ferry operator following a scathing audit finding of more than $224 million unreported over a six-year period.
Comptroller Brad Lander’s office, in its report, says the city’s economic development corporation failed to report the public funds that went toward a heavily subsidized ferry program expanded by the de Blasio administration.
That was one of 11 findings Lander’s office issued
“The New York City Economic Development Corporation’s responsibility is to provide adequate oversight and report financial information transparently on the New York City ferry system, and the audit that we are releasing today shows that during the de Blasio administration, EDC failed to provide the transparent, accurate oversight and financial management that is required of them,” Lander said.
The undisclosed $224.4 million in funds covered an array of capital and operating expenses, according to the 50-page report. Chief among them was $173.8 million in various capital expenses through the end of last year.
Because of that, Lander’s office found that the city’s subsidy to the program was much higher than previously reported, with the differences ranging from $2.08 per rider in fiscal year 2018 to $4.29 per rider in fiscal year 2021. The actual subsidy was $12.88 per rider in fiscal year 2021, which was 50% higher than previously stated.
The ferry service charges a flat fee for passengers regardless of the length of their trip. An adult one-way trip is $2.75, which is the same fare as the city’s subway system.
The EDC said it would issue a request for proposals for a new ferry system contract. However, Fred D’Ascoli, the corporation’s executive vice president and CFO, did not give a timeframe for that RFP in his response letter to the audit.
D’Ascoli also criticized the audit, saying the EDC believes auditors “misrepresented” certain data points and “misunderstood” the city’s contract with Hornblower.
Further, he said the agency did reveal all expenses, abiding by generally accepted accounting principles. However, in response to the audit, the EDC would provide “alternate annual reporting” online that includes “all costs” to Hornblower.
“NYC Ferry is a system beloved by millions of New Yorkers, especially those who see their commute times greatly reduced and those who have new ways to access the city’s waterfront,” he wrote. “NYC Ferry has proven its worth.”
Lander’s report also said the EDC failed to enforce certain terms and conditions with Hornblower, the company that operates the ferry system. In addition, the comptroller’s office said the EDC overpaid the company by about $12 million.
D’Ascoli said the EDC would not pursue repayment on those funds, claiming they were paid for services rendered.