Continued biennial toll and fare increases, and further savings are essential for the finances of New York's Metropolitan Transportation Authority, its chief financial officer said Wednesday.
Otherwise, "our financial situation becomes untenable," chief financial officer Robert Foran told board members at the monthly meeting at lower Manhattan headquarters.
Foran and other MTA officials discussed the authority's November rolling four-year
According to Foran, the authority is changing its 2017 increase from a 4% yield to a 4% price increase. He said customers would save $94 million over the plan period while savings in-house would counter a projected $26 million drop in related revenue.
Fredericka Cuenca, the MTA's director of corporate initiatives, outlined fare-hike scenarios including basic fare, weekly and monthly pass holders, and tweaks to the discount bonus. Changes to seven-day and 30-day unlimited ride MetroCards are the same under both proposals.
David Jones, a new board member and an appointee of Mayor Bill de Blasio, raised the possibility of subsidized or even free MetroCards to lower-income riders.
"It's a social issue that every transit agency faces," said Chairman Thomas Prendergast.
The MTA will hold public hearings next month and vote on a final proposal in January. The increases, if enacted, would take effect on March 19.
Foran said re-estimates and other changes are $507 million favorable through 2020 since the July plan. About 58% of that amount, or $204 million, comes from lower debt service expenses. He cited lower-than-projected interest rates, refunding savings, assumed favorable borrowing rates and variable-rate savings.
The MTA is one of the largest municipal issuers with $38 billion in debt.
Also favorable, said Foran, were lower electricity forecasts, higher passenger and toll revenue forecasts, higher payroll mobility tax and MTA aid, and lower health and welfare forecasts. That more than offset $83 million less in lower real estate tax receipt estimates.
Prendergast, citing cost-cutting that began under predecessors Jay Walder and Joseph Lhota, said $1.6 billion in annual recurring savings will increase to $2 billion by 2020. "You'll see that our belt-tightening days are far from over," said Prendergast.
Challenges, said Foran, include labor contracts due to expire Jan. 15. "I'm confident," Prendergast told reporters Wednesday. "We're always confident."
On Tuesday night, Transport Workers Union Local 100 held a rally in front of MTA headquarters at 2 Broadway in lower Manhattan. About 3,000 people attended the event, which included supportive speeches by political leaders.
"Four years ago, this union waited to secure a contract while the regional and national economy was still recovering from the Great Recession, where concessions and red ink were a part of the bargaining picture everywhere you looked," said TWU local president John Samuelsen.
"Today, we're on an upswing, with a fully funded capital program and robust expectations for our economic future."
Samuelsen is also a nonvoting MTA board member.
