Measuring his words carefully, the chairman-designate of New York’s Metropolitan Transportation Authority said Wednesday that favorable state aid might partially offset the size of the next fare and toll increase in 2015.
“As we get more money and we decide where and how to spend it, we can look at restoration and maybe not have a full fare increase,” Thomas Prendergast told the MTA board in midtown Manhattan.
Gov. Andrew Cuomo two weeks ago nominated Prendergast, a career insider at the MTA, to succeed Joseph Lhota, who resigned to run for New York City mayor. Carmen Bianco will assume Prendergast’s previous role as chief of New York City Transit.
The MTA, with about $32 billion of debt, is one of the largest issuers in the municipal marketplace. It has committed to substantial borrowing for such major projects as the Second Avenue subway line, East Side access for Long Island Rail Road trains and a new Fulton Street transit and office hub.
The state Senate must approve Prendergast’s nomination.
Speaking with reporters after the board meeting, Prendergast said riders should expect some form of fare increase in two years. Authority officials look to raise an additional $450 million to $500 million annually from these increases, the most recent one coming in March.
“There will be a fare hike in 2015. The current financial plan is the current financial plan. We have to examine the relationship to the level of service,” Prendergast said.
The board’s committees on Monday, and the full board on Wednesday, briefly discussed applying an additional $40 million from the state budget to restoring service cuts implemented in 2010, parts of which the MTA restored last year.
Board members Allen Cappelli of New York City’s Staten Island borough and Mitchell Pally of Long Island proposed such a move, which MTA officials will consider when they introduce their last proposed budget and four-year financial plan in July.
The MTA received further good news from Albany recently when Cuomo announced a cooperative agreement between the authority and the New York State Department of Transportation, which provides $111 million in transportation development credits to leverage $1 billion in federal disaster relief funding for recovery and rebuilding efforts related to Hurricane Sandy.
MTA officials estimated that the system sustained an estimated $4.8 billion worth of damage, mostly from corrosive salt water.
The Federal Transit Administration awarded the MTA $1 billion on March 29 as reimbursement for Sandy-related costs. The funding is in addition to more than $193 million in initial reimbursement to the MTA and its components, including New York City Transit, Metro-North Railroad, Long Island Rail Road and MTA Bridges and Tunnels.
This funding requires a 10% local match, but the latest deal relieves the MTA of this cost.
Prendergast on Wednesday cited Sandy recovery as one of the authority’s biggest challenges under his watch.
“We need to get that money and spend that money as wisely as possible,” Prendergast said.