It’s that time of year again in Boston as the city makes way for the ducklings and for another unusual deal for the operator of the swan boats in the Public Garden.
Swan Boats Inc., which has been running the popular tourist attraction since 1877, recently won a new three-year contract that is only slightly different from its past deals, which have come under fire for being too generous and poorly monitored.
CommonWealth reported last year that Swan Boats Inc. was paying a nonprofit arm of the city about $21,000 a year as part of its contract. The magazine also reported that the company’s financial statements weren’t being audited and customer admission fees were being stashed in a drawer instead of a cash register.
Matthew Cahill, executive director of the Boston Finance Commission, raised concerns about the practices in a letter to Boston Mayor Thomas Menino in February. Noting the city’s payments are calculated based on a percentage of sales and profits, he said, “It is incomprehensible that the Parks Department has not required the vendor to provide a full accounting of revenues and expenses.”
Lyn Paget, owner of Swan Boats Inc., downplayed the concerns. “Why all the interest? We’re just a mom and pop operation,” she said, adding that she holds down another job just to make ends meet.
The most recent financial statement issued by Swan Boats Inc. indicates the company reported $540,492 in gross sales during 2011 but earned a net profit of just $1,106.
The new contract was negotiated by the Fund for Parks and Recreation, a nonprofit entity controlled by the city of Boston’s Parks and Recreation Department. The contract requires Swan Boats Inc. to pay the fund $5,000 a year plus 2.75 percent of gross ticket sales and 5 percent of gross souvenir sales. The only change from the previous contract was the requirement to now turn over 5 percent of gross souvenir sales instead of 50 percent of souvenir net profit.
“The intent [of the change] was to remove any incentive the vendor might have to not be conscious of expenses,” said Jacquelyn Goddard, spokeswoman for the Parks Department. The change increases the company’s payments to the fund only slightly, by about $544 using 2011 data.
Cahill called for an audit of the books of Swan Boats, but the new contract only requires the company to provide an accounting of monthly ticket sales based on numbered tickets. There is also no requirement that Swan Boats Inc. start using a cash register.
“Before your article, no one ever questioned how we take in the money,” Paget told CommonWealth. “We do keep track, you know.”
Cohen & Associates, the Boston-based accounting firm for Swan Boats Inc., says in a letter accompanying the firm’s 2011 income statement that the company has not been audited and the statement is “not intended to be a presentation in conformity with accounting principles generally accepted in the United States.”
The income statement provides broad categories of income and expenses – labor, taxes, and benefits totaled $366,383, for example – but doesn’t reveal how much Paget pays herself.
The contract does say that Swan Boats, in conjunction with the Parks
Department, will “explore technology initiatives that improve customer service while maintaining the historic nature and appeal of the Swan Boats operation.” But any changes would not likely be instituted until the next contract period, which does not begin until 2014.
Shirley Kressel, a Back Bay activist and longtime critic of public-private partnership deals struck by the city, says the lack of oversight is troubling. “Mayor Menino is always happy to give away our taxpayer dollars to business interests while places like the Boston Public Schools and the Boston Public Library struggle to survive,” she said. “Apparently, no amount of press exposure is enough to shame him into properly using our public assets.”
Homepage photo by J. Cappuccio.