Cuomo's extended reach prompts questions about MTA debt structure

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Gov. Andrew Cuomo's abrupt strategy shift on the Canarsie Tunnel repair project and his call for firmer control of the Metropolitan Transportation Authority have reignited conflict among the state, New York City and the transit authority over funding, raising questions about debt service.

Cuomo now controls a plurality of MTA board seats, six of 16.

The governor swooped in Jan. 3 with an alternate repair plan for the tunnel that carries the L train under the East River, saying it would avoid a 15-month shutdown that was set to begin in April.

Before Tuesday's MTA emergency board meeting on his proposal to fix Hurricane Sandy-related damage to the tunnel between Manhattan and Brooklyn without a full shutdown, the governor said he wants a majority of board appointees and full budgetary control, while forcing the city to assume half the authority's debt.

He also wants the city to backstop shortfalls from any Manhattan congestion-pricing plan the state legislature passes to help fund mass transit. He advocated congestion pricing in his budget message, also on Tuesday.

The MTA is one of the largest municipal issuers, with roughly $41 billion of debt.

Cuomo extending his reach would counter the original mission of the MTA and raise questions about debt issuance, according to Nicole Gelinas, a senior fellow with the Manhattan Institute of Policy Research.

Before the MTA's origin in 1968, the city itself and before that private operators ran the subways.

"The MTA debt is not guaranteed by the state or the city. It is guaranteed by this nonprofit, independent authority, so if the governor wants to turn the MTA into more of something that is a state agency, can you still really consider that debt to be independent, or should this be bonded debt that is a liability of the state?" Gelinas said.

"It seems like you can't have it both ways," she said. "You can't have the fiction of a public authority for bondholder purposes, but the reality of just another gubernatorial agency for political purposes."

Engineering and palace intrigue consumed Tuesday's MTA board meeting.

Although board approval for the new plan is necessary, several board members complained that Cuomo was railroading them and negating three years of work on the project by MTA engineers.

"Is the decision made? Do we have any actual role here? I’m not hearing that we do," said Polly Trottenberg, an appointee of Mayor Bill de Blasio to the MTA board and also the city's transportation commissioner.

Trottenberg and her DOT staff have been working with MTA officials on shutdown contingencies that include bicycle and ferry service, express bus lanes and other forms of street management.

"This is just another complete — to me — MTA disaster," said board member Andrew Saul. "The board has given out contracts. God, it must be unbelievable the time and the money expended here by the management, and now we are making an abrupt change."

Acting board Chairman Fernando Ferrer said the board would hire an independent firm to review the plan. The board, scheduled to hold its regular meetings next week, held no vote Tuesday. Ferrer also called for a review of the MTA's contracting process and an expansion of design-build project delivery that could save costs and time.

Consulting firm WSP, formerly Parsons Brinckerhoff, recommended approval of the new plans amid discussions that ranged from project safety to whether the board should re-bid.

The new process intends to minimize the labor-intensive removal of benchwall, a supportive form of tunnel outerwall, instead using material such as fiberglass wrapping that reduces the need for continual fixes. A "racking" system for cables will include decoupling cable-system housing from the benchwall, engineers from Cornell and Columbia universities have said.

Ferrer also said the MTA’s capital construction unit, not New York City Transit, would coordinate the plan. MTA Managing Director Ronnie Hakim will be "directly responsible" for its supervision.

NYC Transit President Andy Byford was silent for much of Tuesday's meeting, prompting reporters to ask Ferrer about what they thought was a sidelining of Byford.

"Let's be clear about something. The board hires. The board is responsible in a fiduciary way for all of this." Ferrer said. "That's what we're doing and Andy understands that."

De Blasio bristled at the notion of putting the city further on the hook for MTA funding and debt.

"We need a long-term funding solution," he said Tuesday. "It's not something that can be paid for out of the city budget."

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Budgets Infrastructure State budgets Bill de Blasio Andrew Cuomo City of New York, NY State of New York Metropolitan Transportation Authority New York