Ogdensburg Bridge and Port Authority

 

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NYS Comptroller

THOMAS P. DiNAPOLI

Taxpayers' Guide to State and Local Audits

Ogdensburg Bridge and Port Authority
Capital Planning and Maintenance


Issued: April 08, 2016
Link to full audit report 2015-S-70
Link to 90-day response

Purpose
To determine whether the Ogdensburg Bridge and Port Authority effectively plans and prioritizes its capital maintenance and improvement projects; whether or not it has developed reasonable long-term capital plans; and whether its significant assumptions, forecasts, and budgets are reasonable and supported. Our audit scope covers the period April 1, 2012 through December 23, 2015.

Background
The Ogdensburg Bridge and Port Authority (Authority), created in 1961, manages over $73 million in assets comprising five key transportation and commerce facilities in the State’s North Country: the Ogdensburg-Prescott International Bridge (Bridge); the Ogdensburg International Airport (Airport); the Port of Ogdensburg (Port); the New York and Ogdensburg Railway; and the Commerce and Heavy Industrial Parks. The assets operate in tandem to advance the Authority’s mission, which is to create sound economic business development through the promotion of buildings and river, road, rail, and air transportation.

Each year the Authority develops a capital plan that contains budget allocations for asset improvements or renovations. For projects that are beyond its means, the Authority relies on federal, State, and other sources of funding. During each of the fiscal years 2012-13, 2013-14, and 2014-15, the Authority allocated approximately $1 million in operating cash for capital projects. For fiscal year 2015-16, the Authority had an operating budget of approximately $6.2 million, with $77,000 in operating cash allocated to capital projects. The Authority’s 2015-16 capital plan contained 18 projects totaling $33.6 million – toward which the Authority contributed about $2.4 million (7 percent), $2.3 million of which was financed. The remainder was funded by the Federal Aviation Administration ($27.8 million, or 83 percent); the New York State Department of Transportation ($2.5 million, or 7 percent); and other sources (approximately $900,000, or 3 percent). In addition to its annual capital plan, pursuant to the Public Authorities Reform Act of 2009, the Authority is also required to develop four-year capital spending plans. 

The Bridge is currently the Authority’s only profitable asset, generating about $2.4 million in toll revenue annually. The Authority uses cash from the Bridge’s fund to subsidize its other assets: nearly $2.3 million in 2012-13, more than $700,000 in 2013-14, and over $2.2 million in 2014-15. However, the Authority is working to make all assets profitable. Expansion plans are underway for the Airport, and a low-cost carrier is expected to begin providing additional service to Myrtle Beach, SC, and Orlando, FL, in November 2016. The Authority is also expanding the Port to increase its ship capacity. 

Key Findings

  • Although the Authority has routinely developed four-year capital plans as required, the plans are incomplete and do not identify all of the Authority’s needs – in particular, those related to critical structural components of the Bridge. Failure to accurately report capital needs could put the State in a position of liability should these needs remain unaddressed and at some point require an immediate influx of funds to remediate an issue, likely at a cost higher than necessary.
  • The Authority estimates that the Bridge needs at least $104.5 million for complete repainting and replacement of the approaches. However, the Authority has neither the funds to make the capital investment nor the means to secure the necessary funding elsewhere. While recent legislation would permit the Authority to issue bonds for reconstruction and upgrades, based on its current revenue, it would be unable to afford enough bonding to generate the significant amount of funding needed.
  • Bridge tolls are currently set at levels that are equal to or significantly below those charged by other St. Lawrence River crossings. Given the Bridge’s extensive maintenance needs, including those resulting from accelerating deterioration in certain structural components, Authority officials should formally assess the propriety of the current toll structure.

Key Recommendations

  • Include all anticipated needs in the four-year capital plans, even those the Authority deems to be currently unaffordable.
  • Perform a formal comprehensive analysis of the Bridge’s current toll structure to determine the most appropriate rates for each vehicle type from short-term, intermediate, and long-term perspectives.

Other Related Audits/Reports of Interest

Albany Port District Commission: Select Financial Management Practices (2015-S-55)
Niagara Frontier Transportation Authority: Capital Planning (2015-S-37)


State Government Accountability Contact Information:
Audit Director: John Buyce
Phone: (518) 474-3271; Email: StateGovernmentAccountability@osc.state.ny.us
Address: Office of the State Comptroller; Division of State Government Accountability; 110 State Street, 11th Floor; Albany, NY 12236