Niagara Gazette

February 5, 2013

NFTA audit finds a lot of waste

Staff reports
Niagara Gazette

Niagara Gazette — New York's Authorities Budget Office believes the Niagara Frontier Transportation Authority could be run more efficiently. 

In an operational review of the NFTA released Tuesday, the budget office determined that while the local transportation agency has adopted a series of cost-saving measures in recent months, it could be doing more to achieve additional savings and maximize available revenues not currently being realized.

According to the report, the budget office found as many as 165 employees — more than 10 percent of the NFTA's total workforce — perform functions that need not be performed. The authorities budget office pegged the annual cost for those employees at more than $13.8 million, including $10.8 million in expenses for roughly 85 NFTA police officers stationed at local airports and throughout the Western New York transit system.

The budget office made 13 recommendations for improving NFTA efficiency, including re-evaluating the need for in-house public safety personnel, continuing to reduce or eliminate low-performing bus routes and actively marketing available space inside regional transportation centers, including two in Niagara Falls.  

In response the audit findings, NFTA Chairman Howard Zemsky issued a statement, saying it validates the "extensive effort put forth by senior staff over the past year to address both short- and long-term financial efficiencies throughout the authority."

"We will fully process the audit and staff will completely review the recommendations made by the ABO for future consideration," he said. 

One of those revenue sources not being fully realized relates to operations of two transit centers in the Niagara Falls area, including the bus terminal on Portage Road and the Niagara Falls Transportation Center on Fashion Outlets Boulevard. 

In its review, the budget office found that while the NFTA spent more than $2.4 million to maintain and operate both transit centers as well as its main terminal in the city of Buffalo in fiscal year 2011-12, it collected only about $500,000 in rental and vendor payments during the same time period. 

The budget office determined that it cost $690,000 to operate both Falls locations during the most recent fiscal year, while the agency took in less than $150 in revenue from vending machines and food services agreements at both sites. 

State budget office officials attributed the situation to the NFTA's failure to enforce the terms of a five-year vending agreement it approved in 2007. Under that deal, the agency was to receive 30 percent of gross vending machine sales and a graduated share of revenues after the first $75,000 from restaurant sales at the Niagara Falls Transportation Center. 

During the 2007 opening of the $6.4 million transportation center, which is located near the Fashion Outlets mall, NFTA officials touted the availability of a full-service eatery called the Bijou Cafe for Metro users of the facility. The vendor is Food Art Concessions, LLC, 2495 Main St. in Buffalo.

The budget office found that the restaurant ceased operation and no vending payment had been made since December 2010, the agency took no action to evict the vendor or to solicit another vendor to provide those services. 

The contract terms specify that if the vendor fails to meet its obligations and defaults on payments, it will surrender the leased property, allowing the NFTA to contract with a new vendor. According to the report, the NFTA estimates that the current vendor owes the agency $43,000 under the existing contract terms. 

"The NFTA is not only failing to collect revenue to which it is owed, but continuing this relationship will likely result in lost revenue opportunities in the future," the state budget office concluded.