- the native canadian

Scribblings on Rochester NY's political scene - with an occasional jot or two about Upstate NY politics. This place also gives a peek at the workings of a working journalist.

What Did We Know About the Toronto Deal?

What did we know and when did we know it?

And who is "we?"

That's the question over a now well-publicized deal that the Rochester Ferry Company made with the Toronto Port Authority -- the lease deal to dock at the Canadian port and use the terminal.

It's fast becoming part of the story that somehow no one knew about the lease deal. And yet anyone could have known - if they just looked.

It started on Tuesday when Mayor Bob Duffy made his announcement to the press about getting the city out of the ferry business. Duffy said that his staff "discovered" a contract with the Toronto Port Authority that has the Rochester Ferry Company paying Toronto $250,000 a year for the use of the Canadian terminal. Part of that "discovery" was also a per passenger fee of $1 and a per vehicle fee of $3 charged by the Toronto Authority.

From there came an editorial on the community's lack of knowledge about the deal.

Then a radio talk show host used the word "deception".

But here's the thing - a short stroll on the Internet produced at least two documents in late 2004 that plainly stated the intention of the city to enter into a lease agreement with Toronto's authority for the terminal.

One was the business plan authored by the then-Environmental Services Commissioner Ed Doherty. The date of the draft report is November 18, 2004. The first page of the report talks about how the Toronto Port Authority would enter into a lease agreement to allow Rochester to use its terminal (the plan talks about Toronto doing this deal with the forerunner of the Rochester Ferry Company - The Rochester Port and Ferry Authority). The document also includes a $200,000 annual cost for leasing the Toronto terminal (that's on page 15).

Then came a December 20, 2004 review of the business plan by TranSystems Maritime Strategy International. This was the company hired by City Council to consult the city on the ferry business plan. On page 15 of that study, it lays out the agreement in far more detail. It states that Toronto Port Authority would get $250,000 (Canadian dollars). It also lays out in detail the passenger and vehicle fees that Duffy spoke of... it's called wharfage or passenger use fees (and, by the way, the $1 per passenger and $3 per car fees are also in Canadian dollars).

So the Toronto lease agreements were part of two documents easily obtainable through the calendar year of 2005. Admittedly, we may not have seen any coverage of this deal. And who is to blame for that? Perhaps the press shares some of the burden. We knew about these documents. We could have pressed the mayor or any member of that ferry company board about the Toronto lease deal. And, yet, for whatever reason, we passed up the opportunity. Until now. Until the Duffy administration talked about the Toronto lease deal.

Put in this context this piece of the story is quite different. In fact, it sounds like a lesson for the watchers of the project. I spoke with Johnson a number of times in 2005 and never raised the issue. And there were times when the sole reason was the ferry project. It's even harder to imagine that people sitting on the board of the Rochester Ferry Company didn't have these documents in hand... and didn't press that issue.

In his column on Thursday, Mark Hare writes that the information on the Toronto lease "may have been public information, but most of the public didn't know." That is very true. And what does that say?

Finally, let's put the information into perspective. The real story remains the over-arching arguments made by Mayor Duffy to discontinue the service. Of course, the real and vital question to answer was whether the city wanted to borrow more money to keep the venture going after two miserable years. A business decision, in the end.

So let's stick to business. To the dollars and cents. Whether it was worth the risk or not.

The business value of the lease deal could be part of the argument --- was it wise? Should we have agreed to it?

But no one can claim - or infer - that it was kept from the public. (See? I'm not trying to hide anything either.)

Tuesday, January 10, 2006

Bon Voyage

City Council President Lois Giess peered down from the third floor at City Hall as Mayor Bob Duffy put an end to the city's support of a Fast Ferry service.

As Duffy wrapped up, I asked Giess how long the subsequent meeting of the City Council would be. The council planned to meet to remake the Rochester Ferry Company board.

"Short," she said. "We have board members to appoint... to sell a boat."

She and other City Council members had a stoic look as Duffy addressed the press in the City Hall atrium. He told the assembled that making his decision called for answering four questions:

1) Could the city afford this venture?

2) Did the ferry have a sound business and marketing plan?

3) Was there a likelihood of success?

4) Was this the best way for the city to spend $51.5 million?

He said the answer on all counts was - no.

Here are some other questions to ask as we see the ferry as a city venture drift on:

What would have been wrong in selling the ferry as a city-subsidized service? The paradigm had always been the ferry would sustain itself. That's how it was sold in the first year - when the private group Canadian American Transportation Systems lost millions. And that's how then- Mayor Bill Johnson sold it when the city borrowed money to buy the vessel and run it. In 2004, Johnson said he didn't think it necessary to sell the public that way because the earnings would cover the costs.

Later in the year, he that maybe it wasn't wise to say that the ferry wouldn't need city support.

But then in December, when he and Councilman Ben Douglas announced a plan to borrow more money to keep the ferry running, the self-sustaining mentality seemed back in play.

Would people in the city been more resistant to a ferry venture that, up front, called for city bucks? Maybe. But wouldn't the community have been more accepting of losses if the city could have convinced the public to go along with it?

Under Duffy's not-so-great "best case scenario," he had the ferry losing roughly $2.7 million. Could people in Rochester have accepted that amount? We'll never know now.

Are we willing to pay it out now or borrow on a gamble? City Councilman Adam McFadden was one of a number of council members who were not thrilled with the sudden pull out from the project. McFadden said the boat should have been allowed to run another year by borrowing the $11.5 million requested. And then he pointed to Duffy's call for $.9.5 million from the city's reserve fund to pay off debts associated with the ferry and for costs in peddling the boat

To him these options were equivalent. "All this city's got going is its reserve fund and its (good) credit rating," he said.

But in reality these options give very different vibes. Pulling from the reserve to close down shop means grabbing money in the bank. It also means being ultra-conservative, believing that there is no way the investment will take off. Borrowing that money says that the ferry could pick up steam. But it prolongs the financial agony if it continues to flounder.

And ultimately this gets to whether government really belongs in the game of risking the public coffers on ventures like this. Go ahead and apply this argument to the High Falls district... a Performing Arts Center in a Renaissance Square... even running a government bus service.

Was no one going to share the burden? Monroe County has tip-toed around that ferry project for years. Toronto clearly has no interest in it (and Duffy even said that there were agreements in place to pay the Toronto Port Authority money to take passengers).

During the Douglas-Johnson news conference last month, the plan called for tapping other governments on the shoulder for financial help with the ferry. Duffy seemed willing to try it as well. Or at least until this announcement. Clearly his administration believed they'd get nowhere with other governmental agencies.

What could we use $51.5 million for? Duffy posed that question and gave answers like -- more than 500 police officers outfitted with cruisers and more the 700 houses made lead safe. But this is one question not worth posing. The city will never see $51.5 million now that it's getting out. They will sell that boat to pay back part of the initial $40 million in borrowing. They'll yank money out of reserves (if the City Council approves).

And finally remember awhile back when this space asked what is the Rochester Ferry Company? We said then that it's the city.

Now we know that it's a collection of pallbearers.

The Political Notebook

Scribblings on Rochester NY's political scene - with an occasional jot or two about Upstate NY politics. This place also gives a peek at the workings of a working journalist.

What Did We Know About the Toronto Deal?

Tuesday, January 10, 2006

Bon Voyage