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Forty-Three
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12 DECEMBER 2005
Now what?
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Ferry makes final Toronto run of 2005
(December 12, 2005) —
A sparse crowd boarded the high-speed ferry this morning for the final
outbound voyage of the season to Toronto. The ship left on time shortly before 8
a.m. The return trip later today will mark the end of the operation's
second season. The 2006 season is scheduled to open at the end of March. Bay Ferries will bring the ship's schedule in line with the other two Great Lakes ferry operations next year, running March 31 through Oct. 29. Cheryl Emiliano, 47, of Chili, and her daughter, Danielle, 16, boarded the ship with tickets given to them by friends who had booked on one of the canceled voyages later this month. "I hope they do something," Emiliano
said. "It would be very disappointing for our community if we lose this."
(But as long as we get free tickets from our
friends, that'll do wonders to keep it here, eh Cheryl?)
Also this week, Mayor William A. Johnson Jr. is expected to submit legislation for a sizable cash infusion, since the operators spent most or all of an $8 million reserve over the past 10 months. City Councilman Tim Mains, briefed on the 2006 budget plan, has said he would not be surprised if the mayor's request is for $10 million. "I hope it's a vigorous marketing plan, but they need to change things in here," said Mike Manioci, co-owner of JAM's Nutty Bavarian in the Port of Rochester terminal. He talks about advertising local attractions in the terminal, having a kiosk up on Lake Avenue to let people know the building and shops are open, putting in a bank or money changer, installing video lottery terminals. Like most of the businesses, his will shut down for January and February, with landlord Maplestar Development Co. agreeing to suspend rent. Manioci said he is not sure how any of the businesses will survive next year's shortened season. "We ain't gonna make it without the boat," he said. Bay Ferries adjusted its schedule in midseason three times this year. Citing several weeks of falling sales, Bay Ferries announced last week that it would stop sailing after today. |
"It's Marketing Madness Days, Folks! C'mon down and take advantage of our blowout prices on our uncertain schedules, cancelled cruises and wide open reservation slots! No reasonable offer refused and we need to move these seats at drastically reduced wholesale prices! For a limited time, we're offering off-peak opportunities for big savings and you don't want to miss this. Hurry in now because we don't know how much long we'll be in operation at these prices."
Marketing, marketing, marketing. It's become the raison d'être in the bid to save the ferry and although nobody's quite sure how it's supposed to work, but it sure sounds like a plan.
"(Mike Manioci, co-owner of JAM's Nutty Bavarian in the Port of Rochester terminal) talks about advertising local attractions in the terminal.."
Let's stop and think about this one for a minute, shall we? Some guy selling nuts in a terminal, which sees little to no passenger traffic anyway, thinks advertising local attractions in said terminal to the non-existent passengers is going to increase traffic. The folks who see the advertising are most likely the ones who are using the ferry -- or at least know about it -- so how is advertising the local attractions supposed to reach out and touch those not using the service?
The convoluted logic surrounding the ferry operation is mind-boggling.
Previously, obnoxious advertising was stuck on the floors of Union Station in a bid to snag Torontonians into grabbing the phone and place a reservation. While that may have raised awareness of the ferry's existence, for the most part it was ignored like so much other advertising in our daily lives. How much of the spam you receive do you read and buy into? How often do you pour over the junk mail in your mailbox? Why do people hit Mute when commercials appear on TV?
It's all relegated to the dust-bins of the mind. It may register for a nanosecond, but is largely ignored or forgotten. Some may actually pay attention and take the bait, but that would be such a small minority that believing 'marketing' will be the needed panacea to turn the ferry business around only amounts to wishful thinking.
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Fast Ferry Makes Its Final 2005 Run
by Wendy Mills photo by Tim Keegan Published Dec 12, 2005
Passengers climbed aboard Rochester’s high speed ferry bound for Toronto for the last time this year. The fast ferry wrapped up its 2005 service on Monday, December 12. Less than three dozen ticketed passengers boarded for the ferry’s 8 a.m. final run to Toronto. A Bay Ferries spokesperson says there were less than 100 people on board. Cheryl Emiliano and her daughter Danielle planned to spend the day in Toronto shopping. A friend, who was unable to use the tickets prior to the final run, gave them the tickets. "It is the second time that I will be going on the ferry, I loved it the first time and I am sure I will love it this time,” said Cheryl Emiliano from Chili. “I am really surprised that a lot more people don't take advantage of it." (Let's see, Cheryl. How many people are willing and able to take a workday off and use free tickets on a joy ride to Toronto for a day of shopping?) Jeffery Raetz invited four co-workers along for the ride. It was his first time on the ferry. “I didn't know that it was exactly the last run of the year, but I work for Johnson & Johnson and I have a wonderful team and I couldn't think of a better way to reward them this year than to take them on the fast ferry,” said Raetz. (How about the cash instead? That is, after all, why they're working.) Originally ferry operators, Bay Ferries, planned to stop service on December 31. Bay Ferries says it will focus on a seven month seasonal schedule instead. The 2006 season will resume on March 31 and run through October 29. |
Amazingly cavalier assumptions at work here. What percentage of the population is able to trot off on a shopping trip to Toronto during the week? Canvassing a ferry passenger at the terminal is like asking a country club member why more people don't own BMW's.
Assuming employees share the same enthusiasm for the ferry instead of the cash is blithely ignoring why people work in the first place. Anybody who says differently needs to ask themselves how long they'd stick around on a job if a permanent 50% reduction in pay was announced.
A sidenote here for the non-local readers: take another look at the accompanying photo above. Note the grey skies. That's pretty typical for this area from October until April... not particularly inspiring for outdoor activities and even less so for people who chronically whine about the weather in this region. Even though the ferry experience is no more 'outdoors' than any other activity, the image of exposure to the elements is unavoidable and interest really drops off.
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"Media promotions will create hundreds of thousands of dollars in new advertising revenue."
OK. Now we're playing the Shell Game and this is absurd beyond comparison. Paying money to one's own company's advertising slots and calling it 'revenue' is ridiculous and deceptive.
The local Feel Good station is at it again:
 Marketing
The Big Beautiful Boat
(Rochester,
NY) 12/12/05 - The
fast ferry made its final trip of the season Monday; service will start
again in March. Between now and then a
mass marketing campaign
will be launched to attract new riders. |
Marketing The Big Beautiful Boat
No hidden agenda in those headlines, is there? 13WHAM News is relentless in presenting the cheerful, if not realistic, side of local news. When the news is bad, it ignores or downplays the issue. When a spark of optimism shows up, 13WHAM News is all over it like a cheap suit.
The shallow rationalization of the details of the new 'marketing plan' are obvious. People simply need to do a quick mental itinerary of how they would get from the Rochester ferry terminal to... say... the Waterloo Outlets (50 miles away), shop til they drop, drive back loaded down with merchandise, then try to clear Canadian Customs with their detailed Declaration Forms.. making sure they're prepared to pay the duty on the allowable excess on goods they could have bought easier, faster and far cheaper at most Toronto area stores anyway.
It's not hard to do, but some people get antsy when they start thinking in logically progressive terms. These are the types of people who are quick to blame others for their own lack of planning when all it would have taken is some advance preparation and thought. 13WHAM News caters to these folks who don't want to trouble themselves with details but want the illusion of All Is Well.
Sad, really.
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Ferry season ends for lakes
Rochester ship last to tie up today; Lake
Michigan runs halted in Oct.
(December 12, 2005) —
The high-speed ferry's scheduled
sailing today is the last of the season — not just for Rochester, but for
any ferry crossing the Great Lakes. (Once again,
who's brilliant idea was it to offer year-round service of the
Toronto-Rochester route?) "The ferries that have operated in the past generally go from the first of May until the beginning or middle of October," said Ken Szallai, president of Lake Express, which runs between Milwaukee, Wis., and Muskegon, Mich. "I do believe that there is a November market here. The surveying that we have done has indicated that there is. ... What we have is a perception problem, or deficit." For Rochester, the road to next season
begins today. Also this week, Mayor William A. Johnson Jr. is expected to submit legislation for a sizable cash infusion, since the operators spent most or all of an $8 million reserve over the past 10 months. City Councilman Tim Mains, briefed on the 2006 budget plan, has said he would not be surprised if the mayor's request is for $10 million.
"I hope it's a vigorous marketing plan, but they need to change things in here," said Mike Manioci, co-owner of JAM's Nutty Bavarian in the Port of Rochester terminal. He talks about advertising local attractions in the terminal, having a kiosk up on Lake Avenue to let people know the building and shops are open, putting in a bank or money changer, installing video lottery terminals. Like most of the businesses, his will shut down for January and February, with landlord Maplestar Development Co. agreeing to suspend rent. Manioci said he is not sure how any of the businesses will survive next year's shortened season. "We ain't gonna make it without the boat," he said. After the ship sailed Sunday afternoon,
the terminal was empty. Szallai is in his second year. He said his staff will redouble efforts next year and try to push on into November. Changing people's perception, he said, "comes down to getting the word out that you will be operating, that you can keep a manageable schedule." In Rochester, manager Bay Ferries adjusted its schedule in midseason three times this year. Citing several weeks of falling sales, Bay Ferries announced last week that it would stop sailing after today. No more than 40 people were booked on any of its remaining trips. "If the ferry is running, there will be people," said Pat Maheswaran, 63, of Toronto, who boarded the ship Sunday afternoon instead of having her children split the drive to get her home. Her son lives in Rochester, her daughter in Toronto. "You can't rely on it (the ferry)," she
said. "People don't know when it is running, when it is not running." "Some will find it might be a viable situation. I think most will find it is not," Szallai said. "Older cities struggling for some time in redeveloping their downtown and revisiting past glories look to this as a way to bring people to town and stimulate development. "You have to have a very clear business goal when you get into this line of work, and you have to be very realistic about what ships can do and what they can't do. Too often, cities put too much on one initiative. It's not fair to the initiative, and then the initiative gets way too much scrutiny." (Let's give this man a hand, folks. In two paragraphs, he managed to bring clarity to the ferry project which should have existed from the time CATS first came knocking. Well done!) Lake Express will begin next season April 29. The private operation has a 192-foot, 250-passenger ship that can carry 46 automobiles. Szallai said the ship carried 100,000 riders its first year and gained 10 percent to 15 percent this season. (S.S. Badger is 410 feet long and can carry 620 passengers and 180 vehicles.) Rochester's ferry is 284 feet long and
can carry 774 passengers. It carried 73,231 riders in its first three
months. |
A picture's worth a thousand words and if folks would take
a look at something called a 'map', they'd easily see why the the Lake Michigan
and Lake Ontario ferry services have little to do with each other. To
arrive at the corresponding destination across Lake Michigan by driving involves
a considerably longer trip. Those ferries offer what's known as a
'shortcut'.
The Toronto-Rochester ferry offers no shortcut between the cities as the highway system serves the purpose. The Lake Ontario route serves only as amusement.
The Lake Michigan route offers a multipurpose use: travel and enjoyment. The Lake Ontario route only offers enjoyment as it makes little sense to use the ferry as a shortcut instead of driving. That knocks off a reason, a segment of the public and an advantage that the Lake Michigan routes have over their Lake Ontario counterpart.
And that translates into passenger numbers which equals revenue. This isn't rocket science here.
While it's certainly interesting to examine other Great Lakes ferry services, it's both lazy and reckless to assume "what works there will work here". That doesn't stop ferry supporters from trying, though. From sending the ship down south for the winter (like the Bay Ferries-owned other ferry) to the airline system of demand-based ticket pricing, the Ferry Board is desperately looking at other businesses and localities in a bid to save their skin. Minus any original creativity, the ferry supporters are clutching at straws.
In the beginning, instead of looking at reasons why the ferry project SHOULDN'T go forward, the organizers didn't want to hear it -- hence the 'naysayer' labels -- and only looked at reasons why the project SHOULD go forward. The attitude should have been one of "We'll assume the project shouldn't be allowed to happen. Now present your evidence and convince us it should." The onus of proof should have been on the ferry proponents -- not on the 'naysayers' who were drowned out and derided as being 'pessimistic' or 'negative'.
Muddling through some self-congratulatory 'marketing plan' which is far more style than substance will inevitably result in the same finding as has been the case all along:
Not enough demand to support a venture of this magnitude.
 Ferry
marketing plan unveiled12/12/2005 6:00 PM |
"I think a lot of us in the community have come to grips with the fact that it's failure would desperately hurt us all. So I think that it's a critical next step in terms of marketing," said Rothschild."
Really? There's been nothing to indicate that the failure of the ferry "would desperately hurt us all" is a 'fact'. That has not been established and frankly Arnie, its failure wouldn't hurt me in the slightest. Rather, the continued operation of a business which operates at a severe negative cash flow is pounding the local tax coffers and causing irreparable damage to the business credibility and pride of the local community. THAT'S what's desperately hurting us all.
"Under the plan, the ferry would no longer be advertised as a faster way to get across the lake. Instead, promotions will focus on the ferry as a "lifestyle experience."
Please excuse the crude phrase, but this is one of the most 'retarded' things they've come up with yet. A "lifestyle experience"? What the hell is a "lifestyle experience" and why would anyone want to buy into a "lifestyle experience" to cross Lake Ontario? Is this along the lines of Lifestyles of the Rich and Famous where hopping a private Lear jet for an afternoon picnic in Bali is proof of ostentatious hedonism? "Lifestyle experience". Yeah, RIGHT.
Nobody ever bought the 'faster way to cross the lake' routine and nobody's going to buy into an even MORE ludicrous and vague concept of a "lifestyle experience".
"In Toronto, potential passengers will be lured by tourism opportunities in New York state."
This one's almost as ridiculous. True, there are tourist attractions on this side of the lake but none which haven't already been slogged to the Toronto area ad nauseum. Canadians KNOW about the museums here... and don't care. The wine industry and beauty of the Finger Lakes has been well-publicized as well. Ditto for the High Falls and East End Entertainment districts, the art galleries, the RPO, the Erie Canal, Bristol Mountain and the heady thrill of visiting a supermarket in the Rochester area. Obviously, by the lack of Canadian passenger numbers, Canadians aren't interested in taking the bait.
"Lifestyle experience". This is an example of the grand 'marketing' plan to save the ferry? Pathetic.
WROC-TV keeps slamming away. These guys are the main local media antagonists of the ferry.
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Ferry makes
last trip of 2005 12/12/2005 6:00 PM Docked in Toronto for the last time in 2005, the fast ferry has proven to be no sure money maker. (Gee. That's not a very charitable statement.) However, that doesn't mean anyone's ready to call it quits. "Hopefully this won't be the last trip for the ferry," said Dan Sattler of Chili. "I think everybody's hoping the ferry will do a lot for the community." The community didn't line up to close out the season. Including the News 8 Now crew, 25 riders showed up Monday morning to ride a vessel that holds more than 700.  "Sometimes it's packed and you can't get a seat. Other times it's dead, it's so sad," said ferry regular Mili Kahan of Toronto. Bay Ferries Vice President Don Cormier admitted running a ship with so few people is costly. "That is why we made the decision to stop the season at this time," said Cormier. What can be done to fill the seats? "Marketing, marketing, marketing. On both sides of the lake," declared Jed Cancran of Toronto. Maybe the ship should be marketed as the love boat. That's why Cancran rides all the time. His partner lives in Rochester. Kahan makes the trip every weekend to see her fiancé in Brighton. or those not traveling for love, a casino or break in ticket prices will do. "I think they definitely need to look at lowering the price. I have a family of five and it would be difficult," said Cheryl Emiliano of Chili. (Yeah, kids can be expensive, Cheryl. Sometimes concessions have to be made; like driving versus a cross-lake joy ride.) "We've established the service can be done safely and reliably," said Cormier. But will it ever be self sustaining or even profitable. Stephanie McFarland of Rochester hopes so. Her job depends on it. "I do love my job," said McFarland who works as a bartender on board the Cat. "I'm definitely looking forward to being back next year." |
It's marketing mania run amok:
 
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Ferry marketing plan unveiled
Consultant says publicity is crucial
(December 13, 2005) —
Marketing the high-speed ferry in the year ahead will be a combination of
tactical and guerrilla strategies, a consultant said Monday. Part of the plan involves package deals targeted to specific audiences. Another involves offering young people low-cost tickets in exchange for recruiting Canadian riders. There will be tie-ins with Rochester's Music, Jazz and Lilac festivals. Ticket prices will depend on the day and month of travel as well as how far in advance a person books a trip, said consultant Arnie Rothschild. "We can really change and enhance this thing dramatically," he said as he described the varied sales options during a news conference at his Normal Communications office. (Uh-huh. And how many times has the public heard promises such as this?) On the ferry's final travel day of 2005, Rothschild was eagerly pointing to next year and promising a critical transformation. (And if he's wrong.....???) Manager Bay Ferries shut down service three weeks early with 40 or fewer passengers booked on all remaining trips aboard the 774-passenger ship. The venture lost an estimated $8 million or more in its first, partial season as a city-backed entity. Golf packages possible
"Buying travel is like buying anything else," said Ed Hall, president and CEO of the Greater Rochester Visitors Association, explaining there must be ease of purchase and perceived value. "I don't know whether operational issues were overwhelming (this past year), but certainly there were opportunities to do these sorts of things. It just didn't get done." The city backed a $40 million loan, created Rochester Ferry Co. to oversee operations and bought the ferry in February. Rochester Ferry then hired Bay Ferries as manager. Bay Ferries will take a more active role marketing the ship in the year ahead, instead of farming the work out to a third party. The city, meanwhile, under an as-yet-unsigned contract, would pay Rothschild up to $10,000 for his work on a marketing plan and helping Bay Ferries implement that plan, records show. The marketing expense for Rochester Ferry Co. should remain a constant $600,000 to $650,000, Rothschild said. But media and business partnerships could boost the total into the range of $1.5 million or more. "We are going to increase by hundreds and
hundreds and hundreds of thousands of dollars the overall
marketing of the
ferry," he said. (Good idea, Arnie!
Let's hand the local advertising 'consultants' as much taxpayer cash as
possible before the thing goes belly up. Let's run up that bill with
some completely theoretical proposals which have no accountability when
they don't deliver as promised.) Cheryl Emiliano, 47, of Chili, and her daughter, Danielle, 16, boarded the ferry Monday morning with tickets given to them by friends who had booked on one of the canceled voyages later this month. She said pricing is key to any marketing plan targeted at her family of five. "I think a lot of it is the price that
holds people back," Emiliano said. "It's really hard to expect it to be an overnight (success), and maybe that's my biggest disappointment," he said of how the ship has been judged. "It's one of the most beautiful resources for the city I've ever seen. ... It's a cruise ship, basically, for $29 (off-peak, one way). I don't know how you can go wrong." Trying media avenues, too The ship will be marketed differently in Toronto. Canadian passengers are more likely to travel with a vehicle, and go beyond Rochester, he said, so the focus will be on the region. (And the proof of that assumption is based on ___ ?) Here at home, there will be more of a "sample the ferry" campaign. Once on board, travelers will watch videos describing what to do in their destination city or region (They will? Who sits raptly and pays any attention to TV ads?) and be able to buy event tickets or book hotels. |
First word which came to mind? "Fluff". Complete form over substance. More gross baseless assumptions.
I want definitive proof for every statement made by Arnie Rothschild.... otherwise it amounts to nothing more than off-the-cuff observations which are little more than opinion.
Just what the HELL do Rochester 'marketers' and 'advertisers' know about the Toronto market's needs or desires? How do they have the unmitigated GALL to presume to understand what Canadians want, given the abysmal lack of Canadian input? How DARE they assume Canadian residents and consumers are motivated by the same priorities and values as the Americans across the lake?
The so-called 'marketing gurus' in the Rochester area are spouting off THEIR views and beliefs and trying to slap them on Canadian consumers with a nauseating frequency. Just because the U.S. side of the lake thinks a boat ride to Toronto amounts to a good time DOES NOT mean the Canadian side feels the same about a ride to the U.S. side. Why would anyone make that assumption? Especially if the Canadian public was all but ignored since the blueprints first hit the table?
Now the ferry's being 'marketed' as a "lifestyle experience". WHOSE "lifestyle"? An American "lifestyle"? Who's making the definition? An American? How about if a Canadian marketer starts making broad sweeping assumptions about the American market based on their personal theories?
Here's an analogy. Suppose a small independent Canadian car rental company wants to set up shop across from the Greater Rochester Airport next to the Usual Guys. These Canadians have been successful in the Toronto area because, considering the cost of Canadians gas, 90% of their rental fleet is stocked with smaller fuel-efficient compacts which really appeals to the Canadian renters. They have a few larger rentals but the smaller cars are the most popular.
The Canadians set up shop on Brooks Ave with the small car fleet. But much to their dismay, they find that American renters want the big cars far more often than the smaller fleet and most of their customer base is wandering next door to grab the gas-guzzlers with more room. They applied Canadian market priorities on the American market... assuming the values were the same when, in reality, they weren't.
Therein lies the danger of assuming to know what the customers want or need based on one's own personal perspective. That's what the ferry project has done since it first appeared and far too often, it's the very assumption that Canadians are 'just like Americans' which gets Canadians ticked off.
And in a display of reality.. or spite... the Canadian ferry customers have stayed away by the tens of thousands.
The Rochester ferry folks are left mystified... unable to figure out why.
Winterizing the ferry
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Can't wait to see what a Lake Ontario winter is going to do to last spring's new paint job. The rust streaks were already staining the hull before the leaves started falling.
Anybody have a REALLY big tarp? Any bets the ferry will make it through the entire winter completely unscathed?
Oh. By the way, right now the ferry's resting comfortably at the Port of Rochester in 13˚F with record lows to 0˚F or below predicted for tonight. Ice is nice... except it really does a number to anything left outdoors.
Like ferries.
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Mayor proposes bonds to fund ferry
(December 14, 2005) — Mayor William A.
Johnson Jr. will ask City Council to allow the Rochester Ferry Company to
issue $10 million in bonds to shore up the finances of the high-speed
ferry service. |
Bonds. Of course. And who guarantees the bonds issued by the city of Rochester? Who pays the interest to the bondholders? It's not like the $10 million from the sale of bonds will be invested in an interest bearing account which yields a higher return than what is promised to the bondholders.
No, this is $10 million being spent on local marketing, local advertising and local organizations. It's a gift, not a loan, because when the ferry business bites the dust for the final time these beneficiaries of some of the cash raised won't have to repay the money. It's not as if the Grand Marketing Plan doesn't deliver as promised, these people won't get paid -- although that scenario would certainly help to ensure the cash is spent wisely (not that any local 'professional' organizations would even touch that type of arrangement. Gutless wonders.)
Naturally, raising $10 million in bonds just might be a tough job as the potential to lose one's financial shirt is pretty high considering the ferry business' past and present non-performance. But hey; people are still buying Eastman Kodak stock so it stands to reason there are still a few well-heeled idiots around.
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Mayor proposes $11.5M more for ferry
(December 14, 2005) — Mayor William A. Johnson Jr. is asking City Council to approve $11.5 million in additional borrowing to shore up finances of the high-speed ferry. The authorization would allow Rochester Ferry Co. to sell bonds, backed by the city, and repay manager Bay Ferries, which covered $2 million in overages to end the current season. (So this means the $8 million in the 2005 reserve fund DIDN'T last to the end of this season? Small wonder why the season was cut short.) Johnson, at a press conference this morning, said $10 million in working capital is needed to move the ferry forward. The money remaining after repaying overages would go to a reserve fund and to transaction fees. "We have the best opportunity we've had to run this venture problem free, to plan for it," Johnson said, explaining the added infusion of cash would keep the ship sailing without taxpayer subsidy. Ultimately, however, the city is responsible for the debt. "If we would've shut down in '05," he said, "the taxpayers would have been on the hook." The city backed a $40 million loan, created Rochester Ferry Co. to oversee operations and bought the ship last February. Rochester Ferry then hired Bay Ferries Great Lakes to manage the ship. Facing public skepticism after the previous owner abruptly halted service in the fall of 2004, officials struggled to build ridership and revenue with limited marketing and a delayed, midseason start. City Council is expected to vote on the measure at its final meeting of the year on Tuesday. An aggressive marketing plan, set out earlier this week, promises to maximize revenue. Shortfalls in ridership — 276,396 were projected to ride, while 113,082 actually did — along with engine repairs and other expenses depleted an $8 million reserve in less than 10 months. The season ended ahead of schedule on Monday. Johnson and officials are hoping an influx of working capital would allow the ferry service to have a fresh start with a new marketing plan and new schedule. "We don't plan to be in the same place at the end of 2006 as we are in 2005," Johnson said. "We believe this will be successful, and we will have money in the bank." The ferry would operate next season between March and October. It likely would service a more tropical port during the winter months after next season. Mayor-elect Robert Duffy has been briefed
on the proposal as have officials in Toronto. |
Makes sense. Ram through as much support for the ferry while Johnson's supporters on the City Council still can. Once the Duffy Administration takes office, there's no guarantee they'll have the same allegiance to the project. I have this feeling that Mayor Bob isn't as devoted to the ferry as Mayor Bill is.
Ferry supporters should get their hopes up. The business is toast no matter how much cash is provided.
It's all taxpayer or taxpayer-backed money which will be lost.
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Mayor Asks for $10M for Ferry
by Rocco Vertuccio Published Dec 14, 2005 Rochester Mayor Bill Johnson says the fast ferry operation needs an extra $10 million to stay afloat. "We have no money for bills that will be due and payable in January and February," says Rochester Mayor Bill Johnson. Johnson says the need for the extra money is urgent. The $8 million reserve fund is gone. The mayor and the Rochester Ferry Company say without an extra $10 million, the ferry can't go forward. "You would not have the operating funds to close 2005, you would not have the funds to sit at the table with your partners that you need to drive the marketing efforts," says Rochester Ferry Company President Ben Douglas. The mayor is asking the city council to approve the sale of $10 million in city bonds to raise the money for the ferry. Two million dollars would be used to pay off this year's debt, the rest would be used as working capital for the 2006 season. Next year's business plan calls for a more aggressive marketing strategy to get more passengers and more revenue. The plan is based on 500 trips across Lake Ontario with 242,000 passengers during next year's seven month season. That's down from the original 344,000 passenger estimate. The mayor says with six million people in the Toronto and Rochester areas, selling that many tickets will be easy. (I refuse to accept the mayor actually made that statement.) Next year's plan predicts the operation will break even, a profit is projected for the third year. The ferry company and the mayor say 2006 won't end like 2005 because the operation won't be saddled with this year's problems, mainly the late startup and the rise in fuel costs. The ferry board looked at the possibility of ending the operation all together after this year. The boat would have been sold and taxpayers would have picked up any remaining losses. The board rejected that idea. It says the city bond route is less risky to taxpayers. "We explored all other opportunities, commercial banks, we believe the bond market was the way to go," says Mayor Johnson. (No, Bill, you mean the city hasn't got a prayer of convincing a bank to float a loan for a project on the verge of going under.) The mayor and the ferry company are not making any long term projections for the ferry. For now, it's one year at a time with lots of hope for 2006. |
NYS Attorney General Eliot Spitzer's office HAS to be keeping a close eye on the developments. Stepping in and slamming the door shut still can't be ruled out.
I notice all the buzz about City Council asking EFIC for an additional credit increase of $10 million is no where to be found now. Why not? Could it be word has it the EFIC people have quietly indicated the chances of that are nil? With the primary lender (EFIC) not going to advance any more cash, coupled with no bank willing to touch the thing, coupled with not enough cash available in city coffers, that sort of leaves floating bonds as the sole way of raising money.
Looks like they're running out of rope here. I mean, we're talking SERIOUS desperation now.
This is the equivalent of holding a Bake Sale to raise money.
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"The mayor and ferry officials are confident they have the votes on council."
Which explains why the big push to ram through the city council vote before the Johnson administration leaves in the next few weeks. The incoming Duffy administration has no such assurances for the ferry's future and Mayor Bill knows this.
| Mayor To
Council: $11.5 Mil More For Ferry
Jane Flasch
(Rochester, NY) 12/14/05 -
Without getting more money
fast, the fast ferry will not be able to pay its January and February
bills. |
This is really getting bizarre now. Logic is being tossed aside in favour of shell games which amount to putting lipstick on a pig.
The chequing account's dry and the bill is due. Going into debt to repay debt is a formula for disaster, regardless of what it's called and bonds need to be repaid -- with interest. That's a debt for the taxpayer, no matter how enthusiastic 'people on Wall Street' may be.
City Council will pass Mayor Bill's request. Why?
Why not? What's to be gained by NOT passing the request? True, NOT approving the sale of bonds would be the fiscally responsible thing to do, but let's not forget this is the same City Council which approved purchasing the failed business from CATS. Not a particularly shrewd move there.
Passing the request passes the buck. Instead of the Johnson City Council (one-third of which is leaving) taking the flak of dissolving the business and resolving the debt, now the Duffy administration will have to bear the headache. Passing the request buys time; it's delaying the inevitable -- a stay of execution, if you will -- and takes care of the immediate problem of paying the creditors.
Bay Ferries may be getting rather annoyed at being jerked around and if they simply threw up their hands and walked away from being the operators of the ferry, the city of Rochester would be screwed beyond description. Having no experience in running a ferry business is why Bay Ferries was sought out by the city and minus a competent operator, the ferry might not even be allowed to sail by the Feds. Ouch.
The legal contract would prevent that? That's only if both parties operate in good faith and uphold their end of the agreement; if the city is in violation of the terms of the contract (not paying the operator 'might' be considered a violation) Bay Ferries has every right to protect itself and bail out.
That scenario is particularly ominous. Ferry can't run, no income, a loan in default, bonds to repay and a big ship being hammered by Upstate winter weather with potential buyers holding all the trump cards. Nasty.
"Right now, the ferry doesn't have to make payments on the original $40 million loan until year five."
Provided the city still owns the ferry. Once the ferry is sold and passes hands, I'd be shocked if terms of the loan didn't specify that EFIC gets all its money paid back immediately. Ferry sells for less than the amount of the original loan? The difference is up to the city of Rochester to repay. Immediately.
Even of EFIC played the Nice Lender routine and said they'd accept monthly payments for the difference owed, that's yet MORE interest added on to what's owed. The longer it takes to repay a loan, the more money in interest is added.
What the city of Rochester should have done:
CATS: "We're out of money and have to shut down the ferry operation."
City of Rochester: "Gee, that too bad. What are you going to do now?"
End of story.
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desperately hurt us all. So I think that it's a
critical next step in terms of