MTA Chairman Thomas Prendergast leaped at the opportunity to pitch the agency's
"As ridership increases, the MTA capital program is vital to fund new subway cars, higher-capacity signal systems and improved stations to meet our customers' growing needs and rising expectations," he said Wednesday while announcing that ridership broke records five times in September, peaking with 6.1 million on Sept. 23.
The pitch was timely.
New York's Metropolitan Transportation Authority, though far removed from the frequent breakdowns and track fires of the early 1980s, finds itself trying to put out fires of a different kind. Troubleshooting ranges from scrambling to fix a gap of at least $15.2 billion in its rolling four-year capital plan to explaining to federal investigators what has gone wrong at Metro-North Railroad, home to several mishaps in the past year including a train collision that killed four persons.
The Capital Program Review Board of top state officials rejected the MTA's 2015-2019 capital plan, triggering the latest periodic dance between the agency and state officials. Particulars won't come until sometime after the November elections.
"Everywhere else in the civilized world — Japan, Hong King, Paris, London -the central government pays most of the costs of public transportation. They're not dependent on the stuff we have to go through where you have to beg and plead with the politicians," said Richard Ravitch, who chaired the MTA from 1979 to 1983.
On Tuesday, state Comptroller Thomas DiNapoli said the authority's most immediate challenge is to fully fund the plan without soaking the riders through extra fare hikes or service cuts. Increases of 4% are scheduled for next year and 2017 under a state aid package crafted in 2009.
DiNapoli cautioned that every $1 billion it borrows would raise debt service by an amount comparable to a 1% increase in fares and tolls, meaning farepayers could be in line for a 15% hike overall. He projected the MTA — already one of the largest municipal issuers with nearly $34 billion in debt — will owe $39 billion by 2018, more than double the amount it carried in 2003.
Prendergast acknowledged some discomfort with the debt level, but considers it an acceptable alternative to the dark days.
"There isn't a board member at the MTA that wants to go back to that level [of 1982]," he said at a recent
Given all the authority's challenges, debating its governance structure might seem too wonky to some. Not so, says one transportation expert.
"You can't look at governance without looking at funding because the person controlling the purse is controlling the governance. You have to follow the money to see how the governance works," Eno Transportation Center president Joshua Schank said at the Baruch conference, co-hosted by the Eno Center, the TransitCenter and the Regional Plan Association.
According to Schank, a double whammy works against both the MTA and the Port Authority of New York and New Jersey.
"While there is strong state control over these large public authorities, there's not necessarily accountability on the part of governors for outcomes," said Schank. "So in other words, the governors are free to both criticize the public authority as if they had nothing to do with it — allowing them to take the blame for it — while still being in control of those public authorities. And that's not a recipe for success."
Schank spoke similarly in July at a meeting of the Transportation Reinvention Commission, which Gov. Andrew Cuomo formed to drum up support for the capital plan.
Cuomo and the MTA are still awaiting the commission's report.
Despite
Standard & Poor's rates the MTA's transportation revenue bonds, its primary credit, AA-minus — its fourth-highest rating — while Moody's Investors Service and Fitch Ratings rate them A2 and A, respectively.
"The uncertainty related to the ultimate size and funding plan of the capital program, in our opinion, does not pose an immediate credit concern," S&P wrote in an Oct. 14 commentary.
Prendergast remains confident about the process.
"When the deal needs to get done, it gets done and the money is there: a $14 billion operating budget, a capital budget for about $32 billion," he said. "There are four quarters in this game and we've got a long way to go, and we're going to end up where we need to go."
The authority's board consists of 21 members, including four "quarter pounders" from upstate counties who cast only a quarter-vote and must vote collectively. New York City's mayor appoints only four to the board, which according to Schank tilts priorities away from city needs.
"This creates a tendency to overinvest in suburban capital projects, such as the Long Island East Side access project, and underinvest in city infrastructure. It also may contribute to higher operating subsidies for suburban commuters," said an Eno report, "Getting to the Route of It," which examined governance in the tri-state New York region and transit systems in Chicago, Boston, Dallas-Fort Worth, Minneapolis and San Francisco.
Prendergast, however, downplayed the governance factor.
"I came from a patriarchal family. My wife comes from a matriarchal family. And I've got other people who came from families where the eldest sibling was the leader of that family. And you can make arguments about what's better or what's worse," he said. "What really worked for those that worked were the personalities, the individuals and what they had to do."
Eno Center's roots trace to founder William P. Eno, whose interest in transit stemmed from a horse-and-buggy traffic jam he endured at age 9. Skeptics say some of the MTA's infrastructure is only a tad more modern.
"It's a very challenging environment for these transportation entities and they have to deal with what is, in some parts of the MTA, over a 100-year-old infrastructure," Howard Cure, director of municipal bond research for Evercore Wealth Management, said in a recent Bond Buyer video.
"And it's not glamorous. You know, you don't get the political support for refurbishing tracks and switches and signals as you would for the opening of a new subway station. You also have expansion of the system inevitably costs more than they say, and is delayed."
Major MTA capital projects include the Second Avenue subway line, East Side access for Long Island Rail Road trains and the Fulton Center transit hub. Some transit advocates say the Manhattan-centric projects fail to grasp changing residency and commuting demographics in the outer boroughs — and even beyond, to New Jersey and Connecticut.
"The Second Avenue subway line is a great idea, but its primary virtue is greater comfort for those of us who can afford to live on the Upper East Side. In the other direction it goes to lower Manhattan, one of the most oversubwayed part of the city," Ravitch told a gathering at the New York Transit Museum in downtown Brooklyn. "Its real virtue would have come if you extended the line to the east Bronx. If you opened up the east Bronx, you would have massive development up there."
The capital program does allocate $743 million for the Penn Access project to bring Metro-North New Haven Line service into Pennsylvania Station — and thus alternative access into Manhattan during storms and other catastrophes — and add four stations in the east Bronx.
The plan also budgets $365 million for agency-wide safety measures, and a further $914 million in capital funds to install so-called positive train control and communications-based train control safety measures on all Metro-North and LIRR trains by December 2018 — still three years later than the deadline Congress set back in 2008.
Speaking in March before National Transportation Safety Board investigators studying the Metro-North crash that killed four people in December near Spuyten Duyvil station in the Bronx, Prendergast acknowledged that key Metro-North personnel were working seven days a week for weeks on end and that technology was perilously aging.
"It's exactly the wrong place where you want to — you don't want to overwork anybody anywhere," Prendergast said, according to a hearing transcript released earlier this month. "You certainly don't want to overwork people to physical exhaustion in a field they're going to get hurt, OK, put themselves in harm's way or other employees.
"But you certainly don't want mental acuity of suffering in the control center. That's a bad place to be."
