Roosevelt Island’s Tram, falsely perceived as profitable, is an expensive failure. Residents suffer while RIOC mismanages operations, forcing locals to cover exorbitant losses. Missing leadership…
by David Stone
The Roosevelt Island Daily News
The way RIOC draws tourists into Roosevelt Island Tram cabins, it’s easy imagining it’s a gold mine. Financial realities, though, tell a different, less visible story. Today, it’s a money-losing venture without obvious solutions.
Roosevelt Islanders pour millions into RIOC’s bank account every year. The irony is, in recent years, many of those kicking in to cover losses, can’t get on board. And many of those who can don’t because conditions are unpleasant and/or dangerous.
Tourist lines provide a steady source of income for RIOC. But it’s not enough to cover costs, and demand pushes residents out.
“After nearly 42 years here, who’d have thought it would come to this? Heart breaking. RIOC has really failed the residents and folks who live and/or work on the Island. Shameful. Tone-deaf. Lazy… “
A longtime resident
Dilemma of The Money Losing Tram
The facts are not unknown. Solutions are.
In a email to The Daily, RIOC CEO Dhruvika Patel Amin acknowledged the losses: “For Fiscal Year 25/26, RIOC will be in a deficit position for the Tram Operations based on our budget. The $6.7MM in projected revenue will not cover all the expenses for the Tram. This is due to high management and insurance costs.”
The Nuts and Bolts
- Management fees to Leitner POMA for operating the Tram are over $5.5 million annually.
- Insurance cost add another $1.5 million.
- Project Tram revenue: $6.6 million.
The Tram’s losses exceed $400,000 before other lesser known costs. “Lights, Heat and Power” cost, for example, are over $200,000. And RIOC adds another $120,000 to the money losing Tram by hiring a group that helps manage Leitner POMA.
Total direct costs are $7.6 million, resulting in an annual operating loss of over $1 million. But there’s more.
Administrative overhead budgeting does not single out specific units. Because of that, the Tram’s administrative burden is not known, but it’s substantial. Similarly, the costs of Public Safety officers assigned to the Tram is unknown. These are meaningful costs, however unknown.
“And this loss would be higher if we associated PSD time and or administrative time by other employees,” Amin wrote. “However, for budget purposes, we keep salary expense under personnel expenses.”
“If we include the capital improvements the loss would increase to $2.5MM.”
Why Fixing It Is So Hard
Studying the numbers reveals an important set of facts. That is, virtually none of the costs for operating the money losing Tram are within RIOC’s control. Within the next year, RIOC will negotiate a contract renewal with Leitner-POMA. But Leitner-POMA is a sole source and expecting any price decrease is a pipe dream.
RIOC’s only reasonable prospect for making ends meet is increasing revenue. Bring OMNY to the Tram, phasing out MetroCards, gives RIOC a substantially greater piece of the pie. In RIOC’s budget, those gains are offset by an expected drop in ridership. But recent reports suggest that the ridership decrease may not be realized.
That would help, of course, but the cost is of Roosevelt Islanders, especially school kids, TJ’s shoppers, seniors and disabled losing access. Some of that’s unlawful. All of it is wrong. But Roosevelt Islanders, without consent, must cover the losses through the hidden RIOC tax.
RIOC cannot raise fares because of its operating agreement with the MTA.
Given these realities, Roosevelt Islanders have collectively demanded priority boarding for residents and workers. In the same vein, the community has expressed outrage over RIOC’s poor, often unlawful mistreatment of older adults and physically challenged riders.
Finally, The Money Losing Tram
While it’s true that RIOC is stuck between a rock and a hard place fiscally, it can create better conditions. Especially as residents and local businesses are forced to cover losses, some privileges are earned. Priority boarding is one, and that’s patently obvious.
On a strictly moral front, the community should also not be forced to chip in in support of a system grossly unfair to the neediest riders.
A Vote in the Shadows: When the Public Record Disagrees with Fay Christian
There are two truths in public governance. Timelines do not lie. And silence is often the loudest answer.
