Immediately after Hurricane Sandy battered the New York City region, Metropolitan Transportation Authority chairman Joseph Lhota acknowledged the fragility of the aging subway, commuter rail and bridge-and-tunnel system.

"This is a 100-year-old system," Lhota said at a news conference. "Think of it as a 90- to 100-year-old patient that got into an accident and is in the hospital. Things always happen when you get in the hospital that you don't expect."

MTA officials expect to release preliminary Sandy-related costs around Nov. 20. Lhota, speaking in downtown Brooklyn Wednesday night, said he envisions the authority receiving about 90% to 95% of reimbursement from insurers and the Federal Emergency Management Agency.

Agency officials expect to pay for the storm with available cash – $1.3 billion on hand – and say they will need no additional short-term bridge borrowing before reimbursements come in.

Richard Larkin, senior vice president and director of credit analysis at Herbert J. Sims & Co., expressed confidence in the agency and others battered by Sandy.

"Credit stress will be temporary, and will not jeopardize repayment of their bonds," he said. "Until these issuers can access FEMA funds and insurance proceeds, they all have the resources to withstand temporary service disruptions until normalcy can be reached, and while debt loads may rise because of the storm damage, financial operations should remain sound."

Fitch Ratings on Friday, while acknowledging that the MTA and the Port Authority Trans-Hudson, or PATH, commuter rail system were hardest hit among the 23 East Coast issuers it surveyed, cited the MTA's "significant progress" in restoring operational status. Fitch and Standard & Poor's rate the MTA's transportation revenue bonds A, while Moody's Investors Service assigns an equivalent A2 rating.

Meanwhile, Sandy and its tragic consequences have given the New York region a harsh wakeup call about the need to fix the aging infrastructure – the MTA included – especially amid climate change.

"How do you harden our system? Our transportation system is vulnerable and we learned that the hard way," New York Gov. Andrew Cuomo said.

Alan Rubin sees a teaching moment arising from the tragedy.

"These occasions are horrible, but if you can learn more about infrastructure and figure out how to do it right, you can go to the next step and that's a good thing," said Rubin, a New York-based government-relations specialist at law firm Cozen O'Connor LP.

Federal, state and local officials call Rubin the "Hurricane Czar" for his work after Hurricane Andrew hit South Florida in 1992, causing more than $30 million in damage. While working in Lehman Brothers' investment banking division, Rubin helped design and underwrite the catastrophe fund for hurricane relief and rebuilding Florida.

Beyond the immediate goal of getting the system up and running, the next steps are to plan and to know how to offset costs, said Rubin, who served as vice president of Miami-Dade County's economic development partnership, the Beacon Council. There, he led major reconstruction efforts post-Andrew.

"Once you get people comfortable and safe, then you take a look at how to repair the infrastructure and do so economically so that it's the opportunity of a lifetime. You can think about what the infrastructure will cost and do a bond issue and then a P3 – a public-private partnership. You can't just throw up a band-aid and be satisfied that the system is running. Some of this infrastructure is 100 years old," Rubin added. "Within 90 or 120 days or so of the event is the time to get a buy-in and have everybody agree to start to do something."

Cost-effective measures, he said, could include gates to seal off water from subway entrances.

Rubin favors an infrastructure task force of federal, state, city, and private sector leaders. "You've got to something multi-jurisdictional. The state runs it, the city is where it is and the federal government is offsetting some of the costs," Rubin said.

Lhota agreed with Rubin that the agency must think long-term, and collaboratively. "It just can't be the subway system alone," he said. "I think we need to include the state, the city and all the real estate owners on what is the comprehensive answer to the next surge of water."

Corrosive saltwater, in particular, created massive headaches for the MTA.

"One of the big problems with the MTA tunnels was the amount of saltwater. We have to take stock of ways to work around that, and that's an overall strategy that will involve flying in some of the best engineers in the country and even the world to deal with it," said Anthony Figliola, vice president of lobbying group Empire Government Strategies in Uniondale, N.Y. "We're low-lying and we have to approach infrastructure in a way that prevents waters from getting into the subway. And it may involve fare increases to pay for it."

On Wednesday, the MTA resumed public hearings on previously announced plans for fare-and-toll increases. Its board is expected to decide on one of four fare-hike scenarios, and then approve one of them in December.  The increases would take effect in March.

The authority faces financial stresses on several fronts. Its capital plan includes big projects including East Side access for Long Island Rail Road trains, the Second Avenue subway line, and reworking the Fulton Street transit hub. And its payroll mobility tax, which provides $1.3 billion annually, is now under a court challenge.

According to Peter Derrick, a transit historian, former MTA executive and now a visiting scholar at New York University's Rudin Center for Transportation, the authority needs about $5 billion annually to fix its infrastructure. The federal government reimburses the MTA for about $1.5 billion of that.

"Not the Second Avenue subway, but signals, tracks, subway cars … not anything else. All of these have lifecycles," said Derrick. "The main thing with the storm is that it could require more infrastructure needs. Capital needs could increase to $6 billion, maybe, but the feds would probably keep their figure at $1.5."

 "Long term is a very good question," said John Hallacy, the head of municipal research at Bank of America Merrill Lynch. "It's really a matter of where to draw the line between what's the best for public safety and what's affordable. Clearly there will be tradeoffs, but there's no doubting the fact that it's the city's backbone. I think it's remarkable that they got the system up and running as quickly as they did."

By Thursday, the vast majority of subway lines throughout the city had been restored, including all but one of the lines that cross the East River.

The MTA this past week issued about $970 million in bonds, both new-money and refunding, just as follow-up winter storm Athena beckoned.  They ranged from transportation revenue, dedicated tax fund and Triborough Bridge and Tunnel Authority bonds to the floating-rate note, which finance manager Patrick McCoy has called an effective tool in the short market.

Agency officials bristled at the suggestion that a "Sandy penalty" among traders is in place, especially after one trader said anonymously that the MTA and Triborough "will come real cheap and drag the market down," because of the storm.

"The MTA has had significant investor interest throughout the yield curve. Overall spreads to [Municipal Market Data] achieved were some of the tightest the TBTA has ever achieved," spokesman Aaron Donovan said Wednesday after the authority priced $820 million worth of transportation revenue bonds in two sales. "One week After Hurricane Sandy hampered the MTA transportation network with flooding and wind damage, the investment community has come out in strong support of the MTA."

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