Marybeth Labate (Chair of the RIOC Board):
The first item of new business is authorization to enter into a
contract for management and operation services for the Roosevelt
Island Aerial Tramway. Mr. Siconolfi...
Robert Ryan (President of RIOC):
Pat? Where's Pat? No, he's right there.
Pat? Do you want to make a presentation on the Tram?
Patrick Siconolfi (Chief Financial Officer):
Thank you. You have a memo on the subject. You will
recall that in April the current operator of the Tram gave notice
that they would be terminating their operation of the Tram.
They gave us notice that on June 30th they would be
terminating. They have since extended that, at our request,
to the end of this month. In their notice, they indicated
that they would approximately double the fee that they had been
getting for the operation of the Tram. We immediately began
the public bidding process, and in response to the bids we received
four... in response to the RFP we received four bids -- you have
the detail there -- Ropeway Engineering, American Tramways,
American Ropeway, and the current operator, Intefac, all responded
with the price quotes that you see in front of you. The
Board is asked to make a resolution tonight to recommend that
American Tramways be selected as the operator of the Tram.
I'll be happy to answer any questions if you have...
Labate:
My understanding of what the Board's being asked to do today is, as
you said, authorize us to enter into a contract with one of the
vendors, with your recommendation being American Tramway.
The other issue was the issue of how many shifts the contract
should cover. At the last Board meeting I had asked for some
data on ridership. I believe that's included in the package,
but if you could just talk about that briefly...
Siconolfi:
There are a series of questions related to the usage of the Tram on
the overnight shift, and let me provide you with that
information. We did a sampling of a year's worth of
ridership and what we found was that the overnight shift accounted
for 9% of the total ridership on the Tram. Of that 9%, less
than 1%, .96%, was represented by seniors on that shift, and 2.6%
was disabled riders on that shift. So, just so you have a
sense of the number, that's 1% of 9%, and 2.6% of the 9%, so these
were... the data shows that they are very small numbers. So
that's the first point. The second point was to look at how
the ridership compares to the costs. And, as I've said, the
overnight shift accounts for 9% of ridership. However, the
overnight shift accounts for 27% of the direct expenses of
operating the Tram, so that's three times as great as the
ridership. So 9% of the ridership, but 27% of the
cost. And by the way that cost... the total cost of that
third shift is $645,000. The loss in revenue, if that shift
were not operating, would be about $100,000, so the net cost saving
associated with that overnight shift would be about $545,000.
In addition to that, to get a sense of the cost of providing one of
those rides, as was asked, we took a look at that data. One
ride, to provide one ride, and each ride on the overnight shift
cost $7.94, and each such ride provides $1.50 in revenue.
Voice:
How much?
Siconolfi:
$7.94.
Ryan:
Almost $8.
Labate:
Let's just go back for a second to the issue of the selection of
the operator. Can you just go through for a minute, Patrick,
what the decisive factors were in recommending AT. I know we
all realize the cost needs to be secondary in this matter.
Siconolfi:
Right, as we point out in the memo, the safety of the riding public
is the first priority. Any other consideration is
secondary. So in that regard we took a look at the four
bidders and made a judgment and made a judgment as to who would be
able to provide the safest level of operation and it was
particularly in this field (of safety) that American Tramways was
preeminent. American Tramways is a subsidiary of Doppelmyer,
which is the premiere builders, constructors, maintainers of tram
and tram-like equipment, so that was a record that is unequalled,
not even close, it's unequalled by any of the other bidders.
In addition to that the principal of American Tramways is someone
who has had involvement with the Tram for a period of approximately
ten years, providing service and capital repairs at various times
and in various capacities.
Labate:
OK. Any questions on the operator?
David Kraut (resident Board member):
I just want to clarify. Are we picking an operator
tonight. When do we engage a discussion of whether we can
best afford only two shifts or whether we should be willing to
commit to three?
Labate:
I would suggest the following. I think the data (and I thank
Patrick for the exhaustive data you've given us)... I think the
data presents a pretty compelling fiscal case for questioning the
late evening shift. I'm not prepared right now to recommend
right now that the board take action -- a vote -- on that
tonight. I'd ak that we give a comment period for residents
to come forward in writing to President Ryan and express any
concerns, voice any support, lack of support, etc., that they might
have. Once we have those comments I would then be prepared
to bring it to the Board for consideration
Kraut:
So tonight we're just picking an operator.
Labate:
Tonight we're just picking the operator.
Kraut:
Are we doing a lottery among four? The staff recommends that
we pick among two. Can we reiterate why that is?
Labate:
The staff is recommending American Tramways.
Siconolfi:
The staff has recommended American Tramways primarily because of
our collective judgment that they would be the ones most able to
provide safe ridership.
John Mannix (Board member):
They are not the low bidder.
Siconolfi:
They are not the low bidder. That's correct.
Kraut:
Well, can I move that we approve American Tramway as our operator
so we can get a discussion going on the pros and cons of that
organization. I move that we select American Tramways as our
operator.
Mannix:
Second.
Labate:
Roll call.
Kayser:
Well, no, now we're going to discuss it, right?
Labate:
Not on American Tram... We're going to take a vote on
American Tramways unless you have further discussion. Then
we're going to discuss the ending of the third shift.
Kayser:
Well, I do have some questions on American Tram...
Labate:
Someone said they're not the low bidder. What is the
difference between the low... What were the bids for the
record?
Siconolfi:
OK, if you refer to page 2 of the memo, Ropeway Engineering bid
$1,928,000; American Tramways, $1,900,000; American Ropeway,
$1,701,000; and Intefac, $1,904,000.
Kayser:
So the difference between...
Siconolfi:
Well, three of the bidders are clustered quite closely around
the...
Kayser:
There's no material difference in three of them but there's one
low, particularly low-bidder that...
Siconolfi:
American Ropeway.
Kayser:
...which is about $200,000 lower...
Siconolfi:
And can you explain the reason for...
Ryan:
Maybe I can answer that, Pat. We looked at all these
different companies and their experience and the operations that
American Ropeway are involved in tend to lean more towards
amusement rides... touristy-type things. It's not so much a
form of commuting that we have here, and it isn't as intensive as
we have here, or as big as we have here. What makes American
Tramway attractive, for lack of a better term, is they are the
American affiliate of the largest tramway builder in the world,
Doppelmyer, which is Austrian, I believe, company, I believe, and
also they are the company that... Regular maintenance is
done by the operator, and that's the daily and weekly things.
When a big piece of maintenance, a big capital improvement on the
Tram, anything technical, happens, it's American Tramway that does
the work, and they have built scores of large system trams
throughout North America, so they really have the greatest
experience of anyone.
Kayser:
Madame Chairman, I move the question at this point.
[ROLL CALL unanimous: Labate, Shepherd, Dawson, Fullington,
Kayser, Kraut, Mannix, Stewart, Whitaker.]
Labate:
Motion approved. Now I open up the discussion to the Board
on a decision whether to discontinue the third shift of the
Tram. As I had just previously said, I would recommend to
the Board that we not take action at this point, that we await an
opportunity to get some resident input, but I would certainly be
interested in...
Mannix:
Instinctually, I don't think we should do it. I think
fiscally it clearly... the numbers clearly say what they
say. Instinctually, I feel cutting back that service while
we are trying to build and bring more residents, probably a series
of young residents and a series of people who work different shifts
in the City, may send the wrong message, so instinctually, I'm not
convinced that the fiscal numbers override the service that we
provide, to particularly the newer residents, who we are really
going to try to welcome to the Island.
Kraut:
That's a point I hadn't considered, and I think it's highly
valid. I have no trouble understanding, on a purely dollars
and cents basis, why we should cut out the third shift. We
can use that money elsewhere, such as on the many Tramway
maintenance issues themselves which we're facing, plus whatever
extra monies it might make available for other operational
needs. I understand this. But I also understand that
that Tramway is the way some number of our residents are accustomed
to coming home late at night and if not on a regular basis because
they work late, then fulfilling the entertainment portions of their
day. I'm also sensible of the fact that we, our own subway
station may not be totally in compliance with ADA
regulations... the getting a wheelchair on and off the
subway, and this is part of our discussion. I'm aware that
the City, for some reason or another, has told us we can't put
advertising on the Tram, which means we've lost another bunch of
revenue, potential revenue, which has to be part of our thinking as
we move forward every year [UNINT] Tramway.
I will always continue to speak in favor of absorbing the expense
of that extra shift even though I know it's an incredible subsidy
to the people who ride the Tram at those hours, not just the fact
that it's 27% of our operating expenses against 9% of our
ridership, but we're subsidizing every ride after 10:00 o'clock in
the evening at a cost of 7 dollars and change per ride.
Financially, it looks horrible, but in terms of continuing to keep
the Tram a viable part of the community's operation and the
potential for more ridership in the future, at the least I offer
the thought that, if we do decide to go to two shifts, that it be
a short-term consideration until we begin to see the population of
Southtown growing to the point where there's an incremental
increase, and then get that third shift back as soon as possible if
this Board should decide in its collective wisdom to eliminate
it. I've taken the Tram home at night too many times to want
to just give it away, never be able to do it again because of a
short-term financial consideration, even though I'm very sensitive
to the finances.
Dr. Joan Dawson (Board member):
I'd just like to say that I agree, and I just want to expand on
david's comment. I think that we probably need to do some
investigating to see the legality or the illegality of, if what you
say is accurate, in terms of ADA, of not having... residents not
having any way of getting on the Island or off the Island after a
certain period of time if the subway is not... does not have the
provisions for people for whom... who have disabilities. So
I think we need some additional information before we make that
decision, because we could put ourselves in a position where we are
liable as far as that's concerned. I know that in most
situations you must have at least some way that people who are
disabled are able to move about, and we really need to check that
out thoroughly.
Kayser:
Madam Chairman, I want to reiterate some of the thoughts that I
mentioned at the last Board meeting. The Hobson's choices
that are being placed before the Board in respect to the Tram
operation: 1, service cutbacks; 2, the questions of compliance
with Federal statutes, ADA; 3, the capital requirements that we
haven't mentioned yet but we've been briefed on with respect to
maintaining safe and reliable Tram operations that we know have to
occur; 4th, the fact that Mr. Ryan has had his conversations with
the MTA since the last meeting, which he may want to comment on
tonight, but which I understand we're not being encouraged by the
MTA that there's any chance of a takeover of these expenses.
Therefore, we have to stand on our own two feet, or collective feet
on this Island, and the other major source of revenue that can help
ameliorate some of these things happens to be advertising, which
we're being barred by [UNINT] own elected representatives of the
people on this island, from the City Council, from doing, which to
me makes no sense whatsoever, in terms of the interest of the
people out here, and I think that we ought to be bold if required
and go ahead and proceed with looking into advertising whether it's
authorized by the City Council or not, and letting people on this
island know that we as an organization are prepared to stand up for
them, even if their own elected representatives on City Council
aren't, and look into the advertising contracts we might have, and
capitalize them, and bring the money in, so that some of these
choices we're being faced with can be alleviated.
Labate:
Have we had any discussions with... Who would we engage in
discussion on that... the City Council...?
Ryan:
We have had meetings and maybe also another board member who's very
familiar with the City council could help on this. but we had
meetings last summer... I think it was probably last June or July,
with our representative on the City Council, Gifford Miller, and
the Chairman of the Franchise Committee, Walter McCaffrey.
We are under a franchise agreement with the City of New York on the
Tram, and that is because the Tram moves across City streets, quote
unquote. We are the only form of transportation I know of in
the City of New York, and that includes the uses, subways, taxis,
and ferries, that is not allowed to have advertising. I
think it's sort of ridiculous; I think it's sort of discriminatory,
but that's just my personal opinion. We could stand to
raise, and these are just ballpark figures, we could stand to raise
somewhere in the neighborhood of a half million dollars a year if
we were allowed to have advertising, and when you have a Tram
system that is losing about 1.7 million a year, every $500,000
counts. And maybe Ken would like to add, on a legal basis,
some things.
Kenneth Leitner (staff attorney):
I'll defer to Kevin, who actually knows a little bit about the City
Council.
Kevin Fullington (Board member):
To answer your question about whether it's legislative or
administrative, the franchise agreement is between the Roosevelt
Island Operating Corporation and the administration of the City,
but the City Council is the one that passes an authorizing
resolution telling the administration of the City what the terms of
the franchise agreement are to be of that franchise
agreement. So the answer is, in short, it's legislative...
that the City Council told them any terms you agree to with
Roosevelt Island cannot be allowed to advertise on the Tram, and
they would have to pass another resolution changing that.
Labate:
Have we done anything proactively with the City Council on...
Ryan:
Yes, that was what that meeting entailed, and the reaction we sort
of got was, 'well, we will consider it if you will get the
MetroCard for the Tram. The problem with that view of the
world is, first of all, the capital costs of putting in the
MetroCard system is going to be about between $700,000 and $800,000
for the system, and then the MTA takes approximately about 40 to
50% of the revenues, so we would be getting the advertising which
would generate about half a million dollars a year, but we'd be
losing in revenues to the MTA somewhere in the neighborhood of
$700,000 to $800,000 a year, we'd have a loss of revenue, so we'd
be in a worse position than we are now.
Fullington:
If I could just add, the unfortunate problem with this is, with
these kind of issues, when it's a land use type issue that involves
a specific community, in this case, Council District 5, which is
Councilmember Gifford Miller's district, the decision about whether
specific things in an authorizing resolution are land use issues,
they're generally not debated before the full council, and the full
Council's wisdom, or lack thereof, does not go into a decision
whether or not this is wise. On these kinds of issues the
Council kind of defers to the local Councilmember and will go along
with what their issues are, and in this case Councilmember Miller
has taken a firm stand that unless there is MetroCard put in he's
not going to be willing to approve a plan that doesn't... that
would allow advertising.
Kayser:
Madam Chairman, my understanding of the political lay of the land
is the way Mr. Fullington has just described it. However,
the realities are that the remedy in the event that we were to
proceed with an advertising contract, and capitalize it, and do it
without further action at this time by the City Council, because we
can't get it, because Mr. Miller
isn't helping us, but that we should go ahead... I, I'm, I
would like to have a resolution put before the Board at our next
Board meeting, which, for us to debate, to the effect that the
President of the Corporation be authorized to proceed to enter into
contracts regardless of the authorization from the City Council,
and I would then... What the remedy would be is that we are
technically in violation of our franchise agreement, which has
lapsed anyway, we don't have one, and... we're operating technical
without one, right? We're just on an extension, month to
month...
Leitner:
Under the previous franchise agreement, because we have not
executed a more recent one with the prohibition in it from the City
Council. Under the previous one we had an opportunity to
negotiate with the Department of Transportation, and so there
was...
Kayser:
My question is, do we have an executed franchise agreement now?
Leitner:
We actually do, but not a new one.
Kayser:
The current one has lapsed, has it not, it's just on a month-to-
month extension.
Leitner:
It's on... Yes.
Kayser:
So right now we don't even have a current franchise agreement, it's
on month to month, it can be terminated at any time by either
party, probably on very short notice, and I'm suggesting we proceed
because we have to, to protect the interests of the people on this
Island, so I'm asking that a resolution be presented to the Board
for debate and a vote next time authorizing the president to go
ahead and put out RFPs and do whatever is required to obtain
advertising revenue on the Tram, and if, in fact, we're not
expressly authorized to do that and the City, somebody wants to
take action against us, the remedy is limited to injunctive relief,
and the injunctive relief would only arise out of revoking our
franchise and saying we can't operate the Tram. I suggest
that that's not going to happen, because Mr. Miller would be in a
position of preventing it from happening, because he could go back
with these home rule courtesies that he has on the Council, and he
could get us, at that point, authority, and if he didn't, he would
be responsible for the shutdown, and he would be responsible for
our not having the revenue to keep up the safety requirements, and
he would be responsible for our having to prune back service, and
the political accountability would be where it ought to be.
But we need to take action to do what we are supposed to do
first. I don't expect anybody, unless we are bold enough to
do what we need to do to protect the interests of this Island, then
you can't expect anything else to happen, so that's why I ask that
that resolution be put on the table at the next Board meeting, and
if we can avoid this kind of confrontational situation, Mr. Miller
has time to bring up at any meeting of the City Council at any
point to bring up at any meeting of the City Council, where he
could ask that this thing be reconsidered, so that we don't have to
be in a conflict situation to start with. So I think we
should proceed whether or not the authority is there or not with
respect to the agreement.
Patrick Stewart (resident Board member):
Patrick [Siconolfi], do we have any figures, or can we get figures,
on the number of people in buildings, in Southtown, in buildings
one and two and probably three, who would be using the Tram?
I would expect a lot because they're they're going to work right
across the river here, so the usage of the Tram would be quite
high. I would also expect that we are talking about more
than one shift. Now, again these are things that we don't
know as we sit here, but I would imagine that will deliver us a
certain amount of revenue, I done' know how much, but if you're
talking about three buildings of people, it would be a substantial
amount. And other considerations that may come as a result
of those institutions being here as residents... Could
you...
Siconolfi [OFF-MIKE]:
We actually did that [UNINT].
Stewart:
...that be helpful, thank you.
Fullington:
Could I make a request of Pat also? I don't know if this is
possible, but my curiosity and the numbers of the last shift of the
Tram, on a daily basis it's 9% of the overall ridership, but my
question is not so much what percentage of daily ridership, but
what percent of regular riders of the Tram, on a weekly or monthly
basis, utilize that third shift. In other words, say there's
6000 riders a day, what percent of them on a weekly basis utilize
that third shift at some point during the week? Because I
want to get a sense of... not that only 9%, that the last shift is
9%, but the universe of riders, what percent of them actually
utilize it from time to time, if possible.
Ryan:
I understand it, too, but I don't know how you find that out, short
of stopping every single person...
Voice:
[OFF-MIKE, UNINT]
Ryan:
Questionnaire... spray-painting their foreheads so we could
spot them, you know.
Siconolfi [OFF-MIKE]:
We could sample... we could station someone...
[UNINT]
Fullington:
I mean, I just think it's... because I think it would just confirm
what my sense is, which is that the vast majority of regular riders
utilize the third shift from time to time.
Siconolfi [OFF-MIKE]:
I'm open to suggestion, but what me might do is...
[UNINT]
Fullington:
If that isn't too much of an inconvenience.
Voice [OFF-MIKE]:
[UNINT]
Labate:
OK. Any other comments on it? Then I'd like to
proceed with it as we have discussed, with providing a window of
opportunity for residents to provide their input. Rob, if we
could get word on that out, certainly beyond the limited audience
who are here.., I think we're in for some healthy debate on this
issue in the coming months. Certainly we could look at the
legal things that Joan [Dawson] raised. I think also John
makes a good point in that the potential of the new development on
the island brings for the Tram and it might be worth speaking to
the developers to see what extent that Tram played an important
role in the demographics that they were anticipating, and what
their anticipation is of what the demographic impact is on the
Tram, so if we could do that also. Leo [Kayser], the issue
of advertising is one that I know is near and dear to your heart,
and to all the Board members, I would say. Again, I think
that's an issue that the board will continue to debate... The other
alternative would be to work the political channels to get Mr.
Gifford to see it our way... I don't know to what extent we have
fully exhausted our options in that category. I guess i'm a
little hesitant to defy the City Council until we know we've doe
everything in our powers to persuade them of our viewpoint, and I
don't know if we've done that.
Mannix:
i'd just like to say that I support Leo's position on that.
I think it's the old adage, you've got to break a few eggs to make
an omelette, and I think in this case the leverage that may come to
bear may bring about a resolution, perhaps not in the most amicable
way, but I think we're searching for the resolution, so I support
Leo.
Kayser:
Madam Chairman, as I say, I'd like to avoid confrontation by
raising this initially at the last Board meeting in a preliminary
way. I'm now raising it more specifically at this Board
meeting and doing it publicly. I'm asking that a resolution
be presented for debate at the next Board meeting, and the idea is
give as much notice as possible that we're moving in a certain
direction, so the onus shouldn't be on us that we are the one
precipitating this. If we don't move, time is working
against us, and the "us" are the people on this island, in terms of
keeping that Tram operating and keeping it operating safely, and
keep it... Listen, I'm looking at Miss Berdy's statement of
all the things that ought to be done to fix things up.
It takes money to do that. we can generate this money simply
by, in the private sphere, if we are given the ability to function,
and our hands are being tied here. So to the extent that
things are not being adequately kept up on that Tram, it's because
of lack of funds, which we perfectly willing to generate and are
capable of generating in the marketplace at no cost to anybody here
and with an upgrade of service and upgrade of both aesthetics and
on the safety area, and the responsibility ought to lay where
people can see it. And that's all I'm trying to say.
Labate:
I'm certainly willing to debate the issue and I think just by
our... this evening, I'm sure it will get back to the Councilman
that it's something that we're prepared to look at seriously, and
hopefully from that will come some useful discussions that may
forestall our need to take more aggressive action.
Kayser:
I share the Chair's sentiments. But if we can't bring about
those changes, then we have no alternative, I think.
Labate:
Very good...
[At this point, the Board turned to other matters.]
