N.Y. MTA Board OKs Latest Capital Program

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The board of New York's Metropolitan Transportation Authority passed its latest iteration of its 2015 to 2019 capital program, and MTA Chairman Thomas Prendergast is confident that the third time's the charm.

The MTA, after Wednesday's approval of the $29.5 billion document that seemingly has had more delays than some of its megaprojects, intends to quickly submit it to a state review panel, which could even approve it de-facto within 30 days by not acting on it.

"There are no outstanding issues. The items of concern have been addressed, and I expect the Capital Program Review Board to approve it," Prendergast told reporters after the monthly board meeting in lower Manhattan.

The review panel rejected the board's original $32 billion request in September 2014, citing a $15 billion funding gap. Late last year, the MTA, a state-run agency, worked out an intricate agreement for additional funding from the state and New York City that also includes efficiencies within the authority, such as streamlined procurements.

New York State's approval last month of its fiscal 2017 budget included an extra $1 billion for the second phase of Second Avenue subway line construction, thus requiring the latest board approval for the capital plan. That north-south line is intended to alleviate congestion along the Lexington Avenue corridor on Manhattan's East Side.

The state, at Gov. Andrew Cuomo's behest, provided an additional $7.3 billion overall for the five-year plan period. The plan also includes nearly $500 million in annual contributions from New York City – a 392% increase – in addition to $32 million in city matching funds to federal grants supporting the MTA capital bus program.

The MTA's chief financial officer, Robert Foran, said the finalized plan, assuming review board approval, will resonate favorably among bond rating agencies. The authority is one of the largest municipal issuers with roughly $37.1 billion of debt as of April 1, according to authority documents.

"We have an ongoing dialogue with the rating agencies. They're aware of the capital program, they're aware of this proposal and we will continue to work with them," said Foran. "I have to say their response has been very good. The credit is perceived as a strong credit and we'll do everything we can to maintain our strong credit ratings."

Moody's Investors Service assigns an A1 rating to the MTA's workhorse credit, its transportation revenue bonds. Fitch Ratings and Standard & Poor's rate them A and AA-minus, respectively, while Kroll Bond Rating Agency rates them AA-plus.

The proposed plan includes $5.7 billion in bonding capacity, including $200 million in bond proceeds generated from savings from the Federal Railroad Administration's low-interest railroad rehabilitation and improvement financing, or RRIF, loan supporting positive train control, a remote train-control system designed to minimize accident risk.

The plan also includes $1.6 billion in pay-as-you-go capital.

About $3 billion of the capital program is self-funded through bridge and toll revenue.

According to Prendergast, the plan will enable the authority to advance such projects as positive train control completion for Metro-North and Long Island railroads, expansion of select bus service, introduction of contactless fare-payment technology, access for Metro-North trains into Penn Station and addition of a second track to the Long Island Rail Road's Ronkonkoma branch.

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Transportation industry New York
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