After a nearly five-year hiatus from the public sector, Kim Paparello Vaccari in early April joined New Jersey Transit as deputy chief financial officer under the current CFO, Charlie Wedel. When Wedel retires later this year from his 18-year tenure at NJTransit, Paparello Vaccari will head the agency’s finance department.
NJTransit’s next CFO said she was looking to get back into a government position at a mass transit agency after heading Bank of America’s transportation group in its public finance department for over four years, beginning in April 2004. Before that, Paparello Vaccari was finance director for New York’s Metropolitan Transportation Authority from 1997 to 2003.
Missing the government side of public finance, Paparello Vaccari grabbed at the chance to work for NJTransit, one of the largest mass transit systems in the country. Like most bus and rail systems in the current recession, NJTransit has its fiscal challenges, but earlier this month it was able to sign off on a $1.79 billion fiscal 2010 operating budget that does not include a fare increase or major cutbacks in service to its customers.
“NJTransit is one of the best-run transit agencies in the country and these opportunities don’t come along very often,” Paparello Vaccari said. “So I was very lucky that the timing worked out perfectly for me.”
The agency doesn’t anticipate any new-money issuance or refinancings in the near term, although she said it will continue to evaluate the market for potential refunding opportunities.
NJTransit has $2.16 billion of outstanding debt, including certificates of participation and bonds sold through the New Jersey Economic Development Authority. NJTransit does not have the authority to issue bonds on its own.
“I think that our existing debt portfolio is very efficient, and we’ve been lucky that we don’t have huge amounts of debt and we don’t have any plans to increase our exposure to the bond market right now,” Paparello Vaccari said. “So, we’d like to move forward as much as we can without relying on debt. And I think that would be a big achievement for us.”
NJTransit’s $1.39 billion fiscal 2010 capital budget is financed with nearly $700 million of New Jersey Transportation Trust Fund Authority bonds and federal funds.
While she is happy to be back in the public sector, the more than four years at Bank of America gave Paparello Vaccari a broader exposure to the public transportation sector and enabled her to evaluate mass transit systems throughout the U.S., comparing their various strengths and weaknesses.
“I had the opportunity to work with transits around the country, virtually all of the largest transit agencies in the country,” she said. “And I got to see a number of issues that they faced and see how they dealt with their financial issues, and I think I can bring all that I’ve learned over the last four years from a national perspective here and try to apply some of the things that I learned there.”
Having both government and private banking experience will help Paparello Vaccari as the agency faces slower ridership growth than in previous years and fluctuating fuel costs.
“She’s had [financial adviser] experience, investment banking experience, and issuer experience,” said MTA finance director Patrick McCoy. “So I think she brings a lot to the table which is so critical in navigating these difficult times.”
McCoy served as MTA’s deputy director of finance beginning in 2002, reporting directly to Paparello Vaccari until her departure from the authority.
Wedel has yet to announce a retirement date, but the agency anticipates he will depart in the fall. Working with Wedel allows for a smooth transition that Paparello Vaccari said she is grateful to have.
“He keeps threatening that it will be soon,” she said. “But he has not made any definitive plans, which has been enormously helpful for me.”
NJTransit is the country’s third-largest mass transit system, providing roughly 223 million passenger trips per year on 236 bus routes and 11 rail lines, according to its Web site. The system links New Jersey to New York and Philadelphia.
Major projects include a new $8.7 billion passenger-rail tunnel that will connect Newark to midtown Manhattan, providing an additional 85,000 trips annually. Officials broke ground on the tunnel on June 8 and the project will take eight years to complete.
