The board of New York’s Metropolitan Transportation Authority discussed the proposed four-year budget and capital plan for 2012 to 2014 on Wednesday amid the hovering shadow of labor negotiations.

Talks began a day earlier over a new contact with Transport Workers Union Local 100. The current one expires Jan. 15.

Six years ago, workers struck for three days right before Christmas.

Moody’s Investors Service has warned the MTA about the “significant risk” in assuming that labor settlements will include three years of net-zero wage growth — what authority insiders call “triple zero.”

“Yeah, we have a tough row to hoe,” the MTA’s interim executive director, Joseph Lhota, said at a news conference after the board meeting. Lhota’s confirmation by Gov. Andrew Cuomo is pending in the state Senate.

“I never like to negotiate in public. I’d rather negotiate behind closed doors, and do so without any personal animosity,” said Lhota, who was New York City’s deputy mayor under Rudolph Giuliani.

The board Wednesday discussed the MTA’s financial and capital plans — and its rising debt and $10 billion capital plan gap — after hearing a presentation from chief financial officer Robert Foran and deputy executive director for administration Linda Kleinbaum. Foran discussed the need for a balanced capital program and funded 2012-2014 capital program.

“Our financial ratings are at risk,” he said.

The proposed budget, upon which the board will act next month, includes no fare increases or service cuts, but restores no service cut last year.

Overall, the MTA has about $30 billion of outstanding debt.

The four-year financial plan, Foran said, focuses on cost-cutting for $850 million in annual recurring savings by 2015 as a result of management actions begun last year, including reducing administrative payroll expenses and overtime costs, and rebidding the MTA’s health care plan.

But Foran also warned about such hazards as labor uncertainty, a worsening economy, and a further erosion in state subsidies and dedicated taxes.

The authority plans 7.5% fare increases in 2013 and 2015.

A balanced financial plan and a funded capital program for 2012 to 2014 are closely linked, according to Foran. “Only a balanced plan protects the revenues committed for [pay-as-you-go] capital to be available for debt service on new bonds for 2012-2014 capital projects,” he said.

The MTA began its capital program in 1982. The agency prepares financial plans in February, July and November, and votes on the budget every December.

Foran and Kleinbaum said the MTA could close the gap through a $2.2 billion loan under the Railroad Rehabilitation and Improvement Financing program, which is pending in Washington, for the East Side access project; $4.5 billion of revenue bonds for the Second Avenue subway and core projects; and using $640 million in revenue budgeted for pay-as-you-go capital in the financial plan to pay for debt service. The RRIF loan, Kleinbaum said, uses longer maturity bonds and flexible terms, appropriate for new projects because of their longevity.

Borrowing at the U.S. Treasury rate, she said, would be 100 basis points lower than current MTA rates. Kleinbaum also said the move would generate more than $800 million in additional funding with the same revenue.

Lhota, at his press conference, said the authority’s debt is manageable. Vice chairman Andrew Saul called the rising debt “a ticking time bomb” during July budget deliberations.

“It’s a phrase I don’t agree with,” said Lhota, who succeeds Jay Walder. “You can operate with a reasonable amount of debt, provided there is constant, day-to-day oversight. I view the budget as a living organism.”

The board will vote on the capital plan early next year.

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