Wednesday, January 11, 2006

On the Rocks

The city of Rochester is now out of the ferry business. This is a good thing. From the beginning I've been consistant one the fact that a government should focus on governing, not managing a venture better suited to the private sector. However, this is not how I was hoping it would play out. Some did. Some people in the city and county desired and anticipated the endevours failure. I can only imagine these are the same people that watch NASCAR for the crashes, get upset when the TV cameras avoid showing fights at NFL games, and complain about 5 months of snow in Rochester or a lack of snow, whichever position is counter to reality.

These people are going to have a very good day today.

Last night, Mayor Duffy ended the funding of the fast ferry from Rochester to Toronto. The decision, while painful for many, was the right one and easily justified. Simply put, the project had defied all estimates and projections when it came to things involving red ink, and the cost of maintaining it, of one more chances, was taking funding away from other projects that could be more successful. Simply put, it cost more than it was worth.

I understand some folks are going to be concerned with the question,"why approve a $9 million loan when another million would give the ferry another season?" The reasoning here is that $9 million is what it costs to put this boat down for the last time. Effectively, given one more season that fails, you've only deferred that cost as well as racked up another $10 million in additional debt. One way to look at it, is that Mayor Duffy had to decided between a loan to end the ferry of $9 million or a loan to end the ferry after one more season for $19 million (there are additional costs that would make this number higher than $19 million after 1 year, but we should keep this simple).

People will also likely decry that the ferry deserved a full season to show its value. I agree. There was a missed opportunity not having this boat running during the spring. However, if we want to track missed opportunities, weren' there many that we should consider? Pilotage fees on the order of $5000 a day were never resolved. How many riders a day paid money to cover that cost alone? It was wasteful. I'm not saying that it wasn't neccessary or that they weren't working to resolve it. What I'm saying is that the reality of this project wasn't planned for. The complexity of costs, rider demand, and the price structure wasn't realized by those that moved this project forward. Its a sad fact. A mistake I wish wasn't made. But one that will impact many municiple projects for years to come.

More on this later.