(November 19, 2004) — The city must save Rochester's high-speed ferry service before the ship is sold elsewhere and sails away for good, taking a boatload of taxpayer money with it, Mayor William A. Johnson Jr. says.

The mayor officially announced his plan Thursday to turn the cash-strapped private ferry service into a publicly run operation. The proposal involves creating a public authority — the Rochester Port and Ferry Authority — that would sell government-backed bonds to buy, own and run the ferry.

The initial cost to purchase the ship, pay off previous debts and get the service running again is estimated at $40 million.

"We must act soon," Johnson said. "Without fast action, this service could be lost to this community."

The senior lenders who hold the rights to the ferry "already have potential buyers in Europe and other places," he said. If it's sold, the city and state, which have spent $1.3 million and $14 million, respectively, on the ferry itself could lose their investment.

In all, taxpayers have invested about $50 million in the ship, ferry terminal and infrastructure at the port, Johnson said.

The mayor said the city's business plan would be made available to the public today, and he welcomed scrutiny. He noted that the purchase would be funded through bonds and not tax money.

Johnson also pledged that the ferry would not need any future public subsidies — a promise reminiscent of former Monroe County Executive Bob King's pledge in 1993 that Frontier Field would be self-supporting. Local taxpayers are now supplementing the sports facility with $1.68 million a year.

The mayor is meeting with City Council and state lawmakers to sell his proposal. Council and the state Legislature must approve the formation of an authority. Lawmakers say they want to scrutinize the business plan.

The big question is whether there is enough political and public support for the city proposal. A majority of respondents to a recent Democrat and Chronicle poll said they want to see the ferry become a permanent link between Rochester and Toronto, but few people wanted more public money used to keep it going.

"As we move forward, the mayor must make a case that his alternative is the only alternative," said state Sen. Michael Nozzolio, R-Fayette, Seneca County. He also said he wanted to hear public input.

Assemblyman Joseph Morelle, D-Irondequoit, said he's not sure the city has explored all of its options.

"My belief has always been that this should be a private-sector venture and that the notion that it would be a publicly run operation is just contrary to my general philosophy," he said.

Monroe County Executive Maggie Brooks said the mayor's plan should be explored and the community needs "to do what we can to preserve the ferry in Rochester." But the $40 million "would be a big price" without assurances that ferry revenue could cover the costs, she said.

The $42.5 million Spirit of Ontario — a massive vessel that can carry up to 774 passengers and 238 cars — made its last voyage between Rochester and Toronto on Sept. 7 after less than three months in operation. The private ferry company, Canadian American Transportation Systems, said it was bleeding money and had to shut down.

City officials already have made an offer to CATS to buy the ship, which sits idle in the Genesee River. That offer would pay off some debts, "but is not a bailout of CATS," said Linda Kingsley, city corporation counsel. While CATS owns the ship now, the senior lenders could take possession of it through legal means, she said. The city hopes the matter will be settled amicably and not in the court system, she added.

CATS officials could not be reached for comment Thursday.

The mayor expects criticism over his proposal, but he pleaded for community support and unity to help return the ferry to service. At one point during his news conference, Johnson said he was "sick and tired" of reading accounts about how Rochester is a dying city and can't get anything done.   (ed.  Oh, my big mistake Bill.  You're right... Rochester ISN'T a dying city and it CAN get something done.  It's just that it has all the appearances of a dying city and from one tanking initiative after another, certainly hasn't proven that it can get things done.)

Johnson said it's vital to keep the ferry here because it sets Rochester apart from other midsize U.S. cities and links the community with Toronto.   (ed.  MMMM.  OK.  That sure sounds worth driving an entire community deeper into the financial dumper.)

Issuing government bonds for projects is nothing new, Johnson said, citing the Public Safety Building, Frontier Field and the Blue Cross Arena at the Community War Memorial.

But the city is already facing skepticism.

City resident Ivan Ramos, 45, picketed outside City Hall Thursday morning with a sign saying: "For Sale: $40 million sinking ship. Bill Johnson wants to buy it with your money!"

He supports the ferry service but wants it to be run privately. If it can't be, "then it should go away," he said.

Mark Zupan, dean of the University of Rochester's William E. Simon Graduate School of Business Administration, said the city business plan must be scrutinized, especially considering that the private sector apparently is unwilling to step forward and take over the venture.

When the government runs an operation, there tends to be a lack of innovation and attention to minimizing costs, he said.

Amit Batabyal, an economics professor at Rochester Institute of Technology, said the city should immediately commission a cost-benefit analysis to prove that it will be "revenue neutral" and not require annual subsidies from already "over-taxed and over-committed citizens."   (ed.  Good IDEA!!  Waste MORE money to buy a consultant's slick PowerPoint presentation detailing how buying the ferry would be a waste of money.  "Send that on over to the Department of Redundancy Department".)

"I'm slightly troubled by the city having to buy the fast ferry without what would appear any private support," he said.

Others are questioning why the city wouldn't seek help from the Rochester-Genesee Regional Transportation Authority, an already established state authority. The mayor has said that RGRTA has too much on its plate since it is overseeing the proposed Renaissance Square downtown.

RARMON@DemocratandChronicle.com

Includes reporting by staff writers Gary Craig and Joseph Spector.

(November 19, 2004) — City officials today released their business plan to buy Rochester's private high-speed ferry service and turn it into a publicly run operation.

The 30-page proposal — made available to the public on the city's Web site: www.cityofrochester.gov — details how the ferry would be purchased and the costs involved to operate it.

The city plan calls for the creation of a public authority — the Rochester Port and Ferry Authority — that would issue $40 million in government-backed bonds to buy the massive vessel and oversee the business.

"It's better to try this way than to hope and pray that someone comes along with a solution," said Mayor William A. Johnson Jr., who believes a public takeover of the private ferry is the only way to save the popular service.  (ed.   Doesn't look like it was 'popular' enough.  And if this is the 'only' way to save the ferry, I'd say this clearly falls under the category of 'Desperate Last Ditch Effort'.)

He also emphasized that no taxpayer money would be used to buy the ship. Instead, the authority would raise the necessary cash through the bond sale, although taxpayers would be liable if the service foundered again.   (ed.   Oh. So the taxpayer WILL end up footing the bill after all.)

The $42.5 million Spirit of Ontario — a massive vessel that can carry up to 774 passengers and 238 cars — made its last voyage between Rochester and Toronto on Sept. 7 after less than three months in operation. CATS said it was bleeding money and had to shut down. U.S. taxpayers have invested about $50 million in the ferry project — in the ship itself, in the ferry terminal constructed at the Port of Rochester and in the surrounding infrastructure.

Johnson said city officials learned from mistakes made by CATS and built its business plan on conservative assumptions. For example, the plan estimates that 385,705 passengers — or about 416 per trip — would ride the ship annually. That compares with CATS' estimate that 450,000 riders were needed before the operation would break even.

The operating revenue in the first year would total $19.5 million. Expenses in the first year would be $20.3 million — mainly driven by debt payments. The authority also would have a $4 million reserve fund available in the first year.

Other key elements of the plan:

The average income per passenger fare was set at $30.31. Specific fares, which may include discounts during the non-peak season, will be developed later. CATS charged $28 per adult walk-on passenger, but also tacked on surcharges that totaled $4 for northbound passengers and $3 for southbound riders.

The ferry would carry 59,200 cars annually or about 64 per crossing. The average income per car would be $41. CATS charged $40 per car.

About 5,480 trucks or buses would use the ferry in the first year or about six per trip. The vessel can hold only 10 trucks or buses at onetime. The average truck or bus fare would be $260.

Offering two daily roundtrips between mid April and mid October, and only one roundtrip four days a week during the off-season months.

RARMON@DemocratandChronicle.com