Former Mayor Bill de Blasio used accounting gimmicks to hide nearly $225 million he poured into the city’s costly ferry system — and forced taxpayers to shell out as much as $14.57 for each ride as overwhelmingly wealthy passengers paid just $2.75 a piece.
Those are the key findings of a blistering audit released Wednesday by city Comptroller Brad Lander.
In addition, de Blasio wasted $66 million — including $34 million in “questionable vessel acquisition costs” — as a result of bad decisions by his hand-picked officials in charge of the city’s Economic Development Corp., the 50-page report said.
Although the EDC reported spending $534 million to operate the ferries during the six and a half years that ended on Dec. 31, auditors uncovered a total of at least $758.5 million in ferry-related expenditures — a difference of $224.5 million, Lander said.
The undisclosed expenses — which included payments to various vendors and personnel costs — comprised $181 million in capital spending and $43.5 million in operating expenses, “obfuscating the actual cost of the NYC Ferry system,” according to the audit.
“If you just magically put your capital expenses below the line, you don’t have to show them — even though effectively it’s the same total set of costs in the system,” Lander said during a news conference at the NYC Ferry terminal in Manhattan’s Financial District.
“When ‘hide the ball’ is played with any amount — and certainly with nearly a quarter of a billion dollars — you can’t have confidence that your city’s telling the truth or providing the information that you need.”
Lander said uncovering the budgetary shenanigans meant that the money-losing ferry system was operating far deeper in the red than previously acknowledged by the EDC, which in 2016 estimated that taxpayers would have to subsidize the service at a cost of $6.60 per ride.
The actual subsidy per ride has actually been near twice that amount, Lander said, ranging from a low of $11.44 in fiscal 2019 to a high of $14.57 during fiscal 2020, when ridership plunged amid COVID-19-related lockdowns.
During fiscal 2021, the taxpayer subsidy was $12.88 per ride, according to the audit.
Despite becoming mayor on a campaign pledge to end a class divide he called a “tale of two cities,” de Blasio aggressively promoted the ferry service, which has a ridership with a median annual income between $100,000 and $150,000, The Post exclusively revealed in 2020.
Last year, there were fewer than 150,000 trips weekly on its six routes, which connect 25 terminals on Manhattan’s East Side, Brooklyn, Queens and The Bronx.
Lander’s recommendations include seeking the recovery of what he called about $12 million in “overpayments” to San Francisco-based Hornblower Cruises, which has been paid nearly $830 million since 2015 and has a contract to operate the ferry system through September 2023.
In a prepared statement, a Hornblower spokesperson said that Lander’s audit “does not state that Hornblower has violated its contract with the City in any way” and added that “Hornblower worked with NYCEDC to return $1 million in scheduled payments from the City while ridership numbers dropped during the pandemic.”
In a response to the audit’s findings, the EDC said it wouldn’t seek any refunds from Hornblower because all the money the company got paid was “in accordance with” its contract.
EDC executive vice president and chief financial officer Fred D’Ascoli also said that under de Blasio, the nonprofit corporation “was charged with implementing a massive and complex ferry system” in less than three years despite being “told by experts that a system of this scale would be impossible to deliver in this timeframe.”
In a statement Wednesday, a spokesperson for Mayor Eric Adams likewise said, “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.”
De Blasio, who’s now running for a seat in the US House of Representatives after a failed bid for the White House in 2020, said in a statement, “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.”
Additional reporting by Nolan Hicks
