NYC Underreported Ferry System Costs By $224M: Audit

NEW YORK CITY — The true cost of running New York City's ferry system was underreported by $224 million during former Mayor Bill de Blasio's administration, a new audit found.

Comptroller Brad Lander unveiled the audit Wednesday in a waterfront news conference, just steps away from ferry passengers paying $2.75 to skim along the East River and beyond.

And it's those cheap trips that the audit argued are made possible by a heftier-than-promised city subsidy of $12.88 per ride, roughly double what de Blasio had promised.

Lander said it appeared City Hall officials had pressured their counterparts in the Economic Development Corporation — which handles NYC Ferry — to effectively lowball the system's costs.

"Mayor de Blasio had made clear he wanted a $2.75 cost across the ferry system regardless of whether you're a day-to-day commuter coming in from the Rockaways or The Bronx, or whether you're a one-day tourist or a weekender heading out to the Rockaways on that system," he said.

"It's reasonable to guess that there was essentially pressure on EDC to put forward information that showed a lower subsidy per ride in a way that would be more consistent with the goals that the mayor had laid out for the system."

De Blasio is running for Congress in a recently reshaped District 10 that now includes many areas serviced by NYC Ferry.

The audit found that the Economic Development Corporation incurred a total of $758 million in ferry-related expenses between 2015 and 2021.

But officials only reported $534 million, mostly by removing depreciation and capital expenses from their calculations.

The audit's review didn't spare Hornblower, the company that holds the contract for acquiring and constructing ferries, from criticism.

EDC officials paid Hornblower $34 million in questionable vessel expenses and failed to recoup $12 million in overpayments.

A Hornblower spokesperson told Patch that the audit doesn't state the company violated its contract with the city. Hornblower worked to keep fare affordable while expanding the ferry system to give taxpayers more bang for their buck, the spokesperson said.

“In fact, Hornblower worked with NYCEDC to return $1 million in scheduled payments from the City while ridership numbers dropped during the pandemic," the spokesperson said in a statement.

EDC officials, in their response to the audit, partially agreed to with recommendations to increase transparency and issue a new request for proposal for a company to operate the system.

Lander said he supported a new RFP, which is expected in 2023, and noted nothing in the audit indicated Hornblower should be excluded. He said that process could also look at a "dynamic pricing model" in which daily commuters pay less than one-time users or others who seldom ride ferries.

"The RFP could be one opportunity to explore things like dynamic pricing, which would both help operate the system more effectively and reduce the pressure to understate the expenses and falsely report on what the system actually cost to operate," he said.