(Artvoice, May 3, 1999)
 
 

The Great Summer Peace Bridge Q&A

Bruce Jackson
 
 

(Every question in this article was asked by someone who wrote a letter, sent an email to me at bjackson@buffalo.edu, called on the phone, talked to me in a store, on the street, at school. They are real questions; I'm not interviewing myself. I'd like to thank everyone who helped me prepare this article, as well as the eleven that preceded it, especially Jeff Belt, Mark Mitskovski, Bill Banas, Jeremy Toth, Mary Catherine Malley, Laura D. Monte, Jim Kane, Earl Rowe, Steve Meyer, Jim Pitts, Sam Hoyt, Tom Schofield, Bruno Freschi, Sam Savarino, Pamela Earl, Tony Fryer, Clint Brown, Mike Desmond, Don Wharf, Ross Robinson, and Jamie Moses.)
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Who Owns the Peace Bridge?
The Buffalo and Fort Erie Public Bridge Authority, a public benefit corporation chartered by the State of New York, the United States Congress, and the Canadian Parliament.

There were conversations about and attempts at building a bridge between Fort Erie and Buffalo going back at least to 1851, but nothing happened until 1919 when a group of twenty-five Canadians and Americans set up the Buffalo and Fort Erie Bridge Corporation. They wanted a bridge that would get let them move between the two communities faster and more flexibly than did the ferries then available. (Did you ever wonder why West Ferry Street has that name?) They put up $50,000 of their own money to get the corporation going, and then set out to raise $4,500,000 in bonds for the actual construction. The bonds were mostly sold locally, and the offering was oversubscribed before the first offering day was out. People on both sides of the river really wanted the bridge, they liked the idea of the bridge, they were willing to invest their own money to have the bridge.

The first automobile to make an official crossing was driven by Edward J. Lupfer, the bridge company's chief engineer, on March 13, 1927. The Bridge opened to the public on June 1 of that year. At the August 7, 1927, opening ceremony, which was attended by the Prince of Wales and the Vice President of the United States, John W. Van Allen, one of the original incorporators of the Peace Bridge said:

Hereafter, this bridge belongs to the public. Our sole remaining function is to collect the tolls and pass the money back to those who advanced it. The construction problems are over; [there] remains now only its dedication to service, and we wish to all, great joy and the convenience in the use of it.
Would that it had been so. The public has yet to get ownership of the bridge, the people who run the bridge have and are doing far more than collecting tolls and giving money back to investors, and the construction problems have never been worse.

By law, the PBA board has five members appointed by the Canadian Minister of Transport in Ottawa, two appointed by the Governor of New York, and three Americans serving ex officio, which means they're on the board because of their jobs. The defined ex officio members are the head of the Niagara Frontier Transportation Authority, the New York attorney general, and the director of the New York Department of Transportation. The NFTA director usually attends PBA board meetings, but the other two officials send representatives. The attorney general usually assigns the job to the chief of his Buffalo office. Attorney General Elliot Spitzer did that when he appointed Barbra Kavanagh to the Board. His predecessor, Dennis Vacco, who was far more political in his appointments, gave that job to steel mill owner and Republican Party contributor Brian J. Lipke. When Spitzer replaced Lipke, NYDOT head Joseph Boardman pulled his transportation expert off the board and gave Lipke his seat.

So seven of the ten are political appointees. In practice, the PBA is an insular group, taking advice only from staff, long-time consultants and a few people who have special access. One of those is Andrew Rudnick, CEO and president of the Buffalo and Niagara Partnership, who has worked closely with the PBA and has on occasion acted as spokesman for it. Close connections between the boards of the two groups probably make Rudnick’s participation in PBA affairs possible. Luis Kahl is a member of both boards. PBA board member Gary Blum was, until last year, chief financial officer of Buffalo Crushed Stone, which is owned by Richard E. Garman, who is chairman of the Partnership’s board.

PBA board member and Fort Erie resident Deanna DiMartile told Time Magazine correspondent Stephen Handelman, “It’s only when outside influences step in that things break down.” This, I think, is the heart of the current problem with the PBA. It regards nearly everyone outside its own boardroom as “outside influences.” Senators Moynihan and Schumer, Governor Pataki, the Buffalo Common Council, the region’s delegation to Albany, you and me—we’re “outside influences.”

How did a private corporation become a public authority?
Because of the Great Depression and the end of Prohibition, the numbers of vehicles making the crossing plunged and there was a real danger that the company would default on its bonds. For a time, Frank B. Baird, president and prime mover of the project, put his own money into the struggling company but not even his great private wealth could keep it going in the face of declining income.

In 1933, the Bridge Company sought governmental salvation. Over the next year, three separate pieces of legislation in Ottawa, Albany, and Washington, D.C., created the Buffalo and Fort Erie Public Bridge Commission, a public benefit corporation. Public benefit corporations exist in a land of deliberate legal ambiguity: they aren't government agencies and neither are they private corporations. Their profits in theory belong to the governments that created them, but they behave more like ordinary corporations than an arm of government. They can partake of some of the benefits of government status-their property and bonds are tax exempt, for example-but they have separation from primary agencies of government not enjoyed by organizations that really belong to the public, such as SUNY or the New York Thruway. A public benefit corporation controls its own resources.

The Authority at first had nine members, six from the US and three from Canada. It acquired all the assets and debts of the bridge company. With the debts restructured and almost no taxes to pay, the Authority was on firm financial footing.

In 1957, New York State created the Niagara Frontier Port Authority (now the Niagara Frontier Transportation Authority) and tried to tuck the now-profitable Peace Bridge into it. The Bridge Authority balked. It asked New York Attorney General Jacob Javits for a ruling: could the New York Legislature take over an organization created by the government of New York, the government of Canada and the U.S. Congress? Javits said no, the power play wouldn't hold up.

So the ownership papers were redrawn another time. There were four key changes:
 

---Total board membership would increase to ten, with five members from each country.
---The bridge would be directly tied to no other agency so it could remain fully
           independent.
---The two countries would divide excess revenues equally.
---And the sunset, the date everything would be turned over to the two governments, was
            extended from whenever the outstanding bonds were paid off to 1992.
By 1970, it was clear that bridge capacity would have to be expanded, which meant the Authority would have to issue new construction bonds. The governments extended the life of the Authority to 2020 and raised the debt limit. The Canadian government and the State of New York, instead of splitting whatever cash was left over after payments were made, would each get a flat $200,000 each year, and the Public Bridge Authority would keep the excess for development.

What do the members of the Buffalo and Fort Erie Public Bridge Authority really do?
When it's not engaged in a war with the community about a construction project gone sour, most of what the PBA does is very ordinary. If you go through the minutes of the Buffalo and Erie Public Bridge Authority, you read of decisions regarding who shall paint the bridge and how much shall bridge employees who have worked 20 years get as a bonus and what shall we do for the widows of PBA employees who died mid-year and how shall we apportion the funds to the Canadian and American banks and what tolls shall we set? You read about negotiations with the City of Buffalo to take more of Front Park for truck and customs sheds. You read about issuing and retiring bonds.

The primary change I noticed in the sixty-five years of minutes has to do with secrecy. In the early years the Board seemed open; in more recent years, the minutes suggest an organization on the defensive, an organization with secrets, an organization with the kind of we-they mentality reflected in Deanna DiMartile's statement above. In recent years, the board began doing much of its decision-making in executive session, which means no observers were permitted and no minutes were kept. There are minutes of some meetings that record nothing other than attendance, a call to order, a motion to go into executive session, a motion to come out of executive session, and a motion to adjourn. Things happened at those meetings, but not things you and I will know about.

What's the meaning of the bridge's name and what's the real name of the organization that operates the Peace Bridge?
The Peace Bridge is named to commemorate the century of peace between Canada and the United States following the end of the War of 1812. It would have gone up a decade earlier had not Grand Duke Ferdinand been assassinated in Sarajevo and the world erupted into the Great War.

The corporation that owns the bridge is named The Buffalo and Fort Erie Public Bridge Authority, but you'd hardly know that if you had any dealings with them. An April 15 press release from the Authority's Secretary/Treasurer Earl Rowe has "Peace Bridge Authority" under his name. A statement in it about increasing frequency of crossings is attributed to "Stephen F. Mayer, P.P.E., Operations Manager, Peace Bridge Authority." If you call the Authority's number (716/884-6744) the recorded message begins, "Thank you for calling the Peace Bridge Authority." The letters glued to their office door at the bridge plaza say "Peace Bridge Authority."

I think it important that they deleted the word "Public" wherever possible. They could just as easily have the taped message say, "Public Bridge Authority"; they could just as easily use "Public Bridge Authority" on their correspondence and door. The difference is this: "Peace Bridge Authority" connotes an object that this group controls; "Public Bridge Authority" connotes something belonging to the public for which this group is responsible. "Peace Bridge Authority" is about power, "Public Bridge Authority" is about service.

I doubt anyone with a nefarious bent of mind consciously thought up that nuanced shift in nomenclature. But it is in nuance that the rest of us sometimes learn out what happened in those rooms to which we are never admitted or from which we are ejected when it's executive session time. Speech reflects attitudes of mind, and shifts in nomenclature usually reflect something we ought to know about.

Who uses the Peace Bridge and what do they pay?
In 1992: 7,192,199 cars and 919,991 commercial vehicles.
In 1997: 6,345,622 cars and 1,319,163 commercial vehicles
In 1998: 6,288,318 cars and 1,381,496 commercial vehicles

Fewer and fewer people, and more and more trucks. Automobiles pay $2 per vehicle. Trucks pay $0.41 per ton. There are far more commercial tons than automobiles, so the Authority collects far more in tolls from trucks than from passenger cars.

The toll schedule has simplified from days of yore. 1953 tolls were twenty-five cents plus five cents per person for autos, with an extra quarter for trailers; five cents for pedestrians or bike riders; fifteen cents for a motorcycle with or without a sidecar; twenty cents for a person on horseback, twenty-five cents for a one-horse vehicle and forty cents for a two-horse vehicle. Vehicles in which someone is horizontal were charged more: forty cents for an ambulance and half a buck for a hearse. Kids under five were free whatever mode of transportation they utilized.

They stopped charging people on foot when their accountants discovered it cost more to collect the nickel tolls than the bridge made on them. I can understand why they'd add a nickel for the second horse, all that extra sweeping and scooping, but why is a hearse a dime more than an ambulance? The PBA's equivalent of the pennies on a dead man's eyes?

Does the Peace Bridge make money?
Yes. Huge amounts of it.

In 1998, the PBA reported income of $25,040,401 ($5,996,828 passenger tolls, $13,952,982 commercial tolls, $4,866,212 rentals, and $224,379 other) and operating expenses of $14,009,836. It also reported other expenses and income-such as interest income ($1,346,187), interest expense ($2,513,422), writing off the former duty-free building ($988,674-a curious entry since they don't depreciate any other real property) for a total of $4,829,458.

That results in what their accountant terms an "excess of revenues over expenses" (what you and I would refer to as "profit") of $9,180,378.After paying all operating expenses and debt service, the Bridge made a 36.6% profit. If the Peace Bridge were a private corporation, this would be a staggering rate of return.

Equally important is the fund balance, which is what they've accumulated. When you want to know how rich someone is, you don't look at what came in or what went out, you look at the fund balance. Last year the Bridge had a fund balance of $64,668,291, up from $55,487,913 the year before. I don't know where that money is. The report gives no information about who's controlling the money or what is being done with it; it records very little interest income. Some institution or institutions are making a great deal of money handling the PBA's money.

If the Authority paid real estate taxes, the way you and I do and the way any profit-making corporation does, it would have paid about $6 million last year instead of the $783,000 it divided equally between Buffalo and Fort Erie in lieu of taxes and the $200,000 it paid to the NFTA. Even if the Authority had paid real estate taxes and taxes on profits, it would still have registered a very respectable 12.7% profit. Any commercial operation would be delighted with that profit margin.

With what it is making on truck traffic, the Authority could dispense entirely with the income from automobiles and still turn a profit.

Does the Bridge make money for us or take money from us?
There's a pretty little packet of six prints on heavy 8 1/2" x 11 stock the PBA sometimes gives away titled "Construction Paintings of the Peace Bridge by H. H. Green." Green was one of the original incorporators. A note on the inside cover of that packet says, "No public funds have ever been granted or used for construction, operation, maintenance or for capital expenditure. All financing has been done from private and institutional funds." John A. Lopinski's Chairman's Report in the 1997 Annual Report begins, "No public funds have ever been granted or used for construction, operation, maintenance or for capital expenditure. All financing has been done from private and institutional funds." They say that a lot. It is perhaps the lie they have told more than any other.

The PBA exists entirely on public funds. Entirely. If the public wants to cross the river from the Buffalo into Fort Erie, the public has to pay the Buffalo and Fort Erie Public Bridge Authority $2 for the right to do it-unless the public is driving a truck, in which case it pays considerably more. Last year the PBA received almost $5 million in rental income, the largest portion of it for space rented at above market rates for use by Customs and Immigration—your tax dollars pay that rent.

The Authority has been tax exempt since 1934. Tax exemption means the government has decided that what an organization does accrues to the public good, so it doesn't take from its profits (profits, not income) the share everyone else pays. Symphony orchestras, social service organizations, museums, churches, schools--all such organizations receive tax exemptions. Taxes are monies that belong to the public. If an organization is declared tax exempt, the government is subsidizing that organization to the extent that the organization is permitted to keep and use for its own purposes the funds that would otherwise have been shared by all of us. All organizations that engage in commerce and are tax exempt are recipients of public money to exactly the extent of the taxes they would have paid had they been treated like everyone else. That includes not only the taxes on profit, but also sales tax and real estate tax from which they are exempt. Bonds of tax exempt organizations are themselves tax exempt, which means those bonds enter the market with a competitive edge over bonds from profit-making organizations. That enables the sellers of nonprofit organizations' bonds to offer them for a lower interest rate, which means the nonprofit gets to rent money more cheaply than you and I do.

It's moot now. However often they made that claim in the past, they can't make it any longer. Last week the Peace Bridge received two grants from the US government for a total of $2.76 million to develop a high-speed frequent-traveler lane and an electronic document transmission system.

Why are the lawsuits necessary? Won't they just slow things down?
How much and whether the lawsuits slow things down depends on the PBA, not on the groups filing the lawsuits. The PBA saying "You shouldn't sue because that slows up our project" is like someone who hit you with a car saying you shouldn't sue because that's going to cost him money. Yeah, it will, but who damaged whom here? Blaming the victim is a lawyer's tactic, nothing more. If the PBA had done the right thing in the first place-considered all the alternatives rather than locking themselves into a single choice and then pretending they were considering alternatives, or if they'd just be willing to consider them now--the lawsuits would not be necessary. Furthermore, had the lawsuits not been filed now certain legal rights would have been lost for good because of the statute of limitations.

A lawsuit is the citizens' recourse to benign force and it is sometimes the only way to get government to behave decently. I came across this passage in a letter from Samuel Adams to Thomas Jefferson dated October 9, 1787: "I have long been settled in my own opinion, that neither Philosophy, nor Religion, nor Morality, nor Wisdom, nor Interest, will ever govern nations or Parties, against their Vanity, their Pride, their Resentment or Revenge, or their Avarice or Ambition. Nothing but Force and Power and Strength can restrain them." The lawsuits filed by the city of Buffalo, the Episcopal Church Home and the Olmstead Conservancy were necessary because they was the only way to get the PBA to pay attention.

You keep saying the LaFalce-Maloney bridge evaluation plan, the one endorsed by the Public Bridge Authority, is a sham. Why?
LaFalce-Maloney would have two engineering firms, one American and one Canadian, estimate the cost and timeline for constructing a companion span and the Freschi-Lin signature bridge.

Its key defect is that it locks out consideration of two vital issues: construction of the plaza on the American side and maintenance costs for whichever bridge or bridges are up. The first goes to time, the second to money.

I'm assuming that LaFalce's and Maloney's goal isn't just to get a new bridge up; it's to have six fully functional lanes available as quickly and efficiently and economically as possible. The kicker is "fully functional." A bridge doesn't float in space; it lands somewhere. The speed with which it handles traffic, and its impact on the community, is determined by the entirety, the bridge and the plazas at either end. The plaza on the Canadian side is already there; the PBA says its new bridge will feed into it and Freschi says his design will land there without disruption. So the Canadian plaza is not a problem.

The American plaza is. The PBA hasn't told us what plaza plans it's been developing, but they have said they won't begin construction on it until after the new bridge is completed and the old bridge rehabilitated. By its own estimate, that project will take a full decade. A full decade before those six lanes and two plazas are capable of delivering traffic. Freschi says he and T. Y. Lin haven't designed just a bridge; they've designed a bridge system that articulates with the plaza on the Canadian side and contains a plaza on the American side more useful to the city of Buffalo than anything suggested by the PBA. He's also said that his entire system will be ready to use earlier and will cost less than the companion span and expanded plaza system advocated by the PBA. The PBA says Freschi is wrong, but it has never given his design serious consideration.

The only meaningful comparison is between the two entire bridge systems. Anything else is grounded in a syllogism, flawed from the start.

Once a bridge is up, it's got to be maintained. The concrete cable-stayed bridge is nearly maintenance free. Over their useful lifetimes, the maintenance costs for the two companion spans will be more than constructing a companion span and rehabilitating the old bridge. Whatever the initial cost of construction, the long-term cost, the real cost, will be far greater for the steel companion span than it would be for the concrete signature span.

That's why looking at the bridges alone and comparing only them is a sham issue.

If everything you say is true, why is the Authority so adamant about the companion span? They're not stupid.
No, they're not, but they're doing what a lot of people do when they find they've made a wrong decision that has wasted a lot of money: they close their eyes, dig in their heels and hope it will go away.

About five years ago, the PBA decided that the present bridge could not be torn down. All else follows from their initial error. They spent millions of dollars designing a companion span and now, instead of confronting that erroneous initial assumption they're defending its consequences. It's quite human for them to want to avoid admitting they screwed up. To make matters worse, they've gotten all their engineering advice from one company, Parsons/DeLeuw, their engineering partner for decades and the company that, were all alternative plans to go away, will get to build the companion span. Going to Parsons for advice on alternate options at this point is like asking the fox to evaluate the henhouse security system.

Some board members may really believe the twin span is a better idea, but I'm convinced that it's now primarily a matter of saving face. They are in no financial danger, however things turn out. At its meeting of April 28, 1995, the board voted to revise the by-laws by indemnifying all its members-past, present and future--against the costs of any lawsuit and any legal judgements arising from their connections with the Peace Bridge, except for actions that were purely criminal. The minutes of that meeting include the word "twinning." So far as I know, that's the first time that word entered the official historical record of the Buffalo and Fort Erie Public Bridge Authority.

What's more important, commerce or aesthetics?
Beware the false dichotomy. There is no good reason why we must set one above the other. It may be true that any bridge at all wide enough for the truck traffic will benefit the region commercially. That doesn't displace the fact that a beautiful bridge between Buffalo and Fort Erie will benefit the region commercially to exactly the same degree and it will benefit the region in other ways as well. If people tell us we must choose one or the other and they provide no compelling reason why such a choice must be made, we must conclude they are people who don't give a damn about the quality of life for people in this area or they have unstated economic interests. (None of the Canadian members of the board, for example, have said whether or how much the rigidity of their position has been influenced by the fact that a large Canadian construction firm has the contract to build the companion span.)

It's apparently easy to document the economic impact of a wider bridge. I write "apparently" because the businessmen and trade diplomats can tally tonnage of goods shipped back and forth and the number of jobs in the region involved in packaging and shipping and weighing and tolling and inspecting that might go elsewhere were a wide enough bridge not available, but they do not tally the costs to the region in pollution, environmental degradation, wear on the infrastructure, consumption of land that might be used for other purposes and so forth. But whatever economic benefits accrue to this region or the two nations will accrue whatever bridge is built. The kind of bridge built has nothing at all to do with the value of six fully functional lanes.

It is not so easy to document the aesthetic impact of a beautiful bridge. How can you tally in advance the wages of the aesthetic in ways the businessmen and trade diplomats can appreciate?

Maybe by looking elsewhere. A few months ago, WNYC's"New York Kids" show sponsored a poetry contest in which kids in grades three through six were invited to enter poems on the subject of "New York Dreams." This poem was written by Kristin McMurrer, a ten-year-old fifth grader from Brooklyn:

My New York Dream

In my dream
I see the Verrazano Bridge
Bright silvery light forms a shimmering swing
I am drawn
Drawn by the light's welcome,
"Come Swing!"

I soar towards the shimmering lights
Through the cool starlit sky.
I hop on the long swing
Pump my legs faster and faster
The wind pushes between my legs
Billowing my skirt like a parachute.

Before me, the Statue of Liberty
Stands tall holding her flaming torch.
I am proud to be an American, a free American
Proud to be a New Yorker.

Above me, twinkling stars like little flashlights
Wink at me
The full moon casts a pathway shadow on the water below.
In the distance a tiny tug boat
Tugs a cruise liner under the bridge.

This is my freedom.
This is my city.
This is my bridge.
This is my dream.
This is my New York.

How much would it be worth if our kids in Buffalo and Fort Erie could have dreams like that inspired by the bridge we built across the waters that join our two cities? Wayne Redekop, John Lopinski, Andrew Rudnick, Mark Romoff: what's it worth to you? Brian Lipke, John LaFalce, John Maloney: what's it worth to you? Anything? Anything at all?

How will it end?
We'll get the signature bridge.
 
 

copyright 1999 Bruce Jackson

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