Comptroller Brad Lander says audit reveals New York City mismanaged $250 million in ferry system funds
NEW YORK -- The city has been accused of under-reporting and falsifying the financials of its ferry system.
The city comptroller just released a bombshell report on mismanagement he says failed to account for a quarter of a billion dollars, CBS2's Dave Carlin reported Wednesday.
The NYC ferry system floats on a sea of subsidies.
At $2.75 a ride, the government picks up the rest of the tab for each person using the expensive-to-operate service. Along the way, then-Mayor Bill de Blasio repeatedly said what gets kicked in was a per-ride subsidy of $6.60.
But according to City Comptroller Brad Lander, the actual number is nearly double that, hidden in what he calls false financial reporting.
According to an audit done by Lander's office, from 2015-2021 the "EDC (Economic Development Corporation) under-reported almost a quarter of a billion dollars in ferry expenditures."
"When 'hide the ball' is played with any amount, but certainly, with nearly a quarter of a billion dollars, you can't have confidence that your city is just telling the truth and providing the information that you need," Lander said.
He said he suspects it may have been done to make a pet project of de Blasio's look better than it was, but he added the audit did not prove that.
Lander said one of the audit's most egregious finding was how the city's partner in the ferry service, Hornblower, delivered a vessel that became a rip-off for New York City taxpayers. He says the city overpaid Hornblower by paying $8.4 million for a Rockaway Class vessel. However, what was delivered was a River Class vessel, valued at $5.6 million.
That's a difference of $2.8 million.
"But they did not insist that Hornblower refund the $2.8 million difference, between the $8.4 million vessel they paid for and the $5.6 million vessel that they received," Lander said.
The audit recommends more transparent reporting, better cost control, and a new RFP, or request for proposal. Some are things the city has already agreed to do.
This comes as de Blasio runs as a candidate in New York's 10th Congressional District. He made the following statement in response to Lander's audit:
"We haven't had a chance to review the full report and recommendations, so I can't comment on any specifics yet, but if there are issues with underreporting at EDC, or by the ferry operators, that should be remedied and whatever accountability or reforms that are needed should be adopted," de Blasio said.
Lander said he wants questions answered to turn this ship around and to make sure we know exactly how much ferries are costing the city.
A mayor's office spokesperson released the following statement:
"NYC Ferry offers a critical transportation option that thousands of people use every day. Concerns around the system's finances are well known – the prior administration rushed NYCEDC to establish a large and complex ferry system, and we are keenly aware there is room for improvement. We are working actively on an innovative plan to write a new chapter for the ferry system centered on true financial sustainability and access for communities that need it."