A few weeks ago, word got out of a few new FTA reports concerning the MTA’s ongoing big-ticket capital items. Initially, we learned that the Federal Transit Administration believed the MTA’s current launch dates for the Second Ave. Subway and East Side Access project were premature. Instead of a 2016 revenue service date, the FTA expects SAS and ESA to open in 2018. That was not, apparently, the only key finding in the reports.
As The Post details, turnover at the top of the management structure for these projects has become a major issue for the MTA. Brain drain, it seems, isn’t just limited to the Chairman’s spot. Jennifer Fermino has more:
Top managers on mega-MTA projects — who haven’t had raises in four years — are bolting at an alarmingly high rate, leaving crucial positions vacant and prompting concern from federal regulators. The Federal Transit Administration is so disturbed by the high turnover that in two separate reports, they’ve cautioned the cash-strapped agency to quickly bring in experienced managers to fill current and future vacancies on such massive projects as the Second Avenue Subway, according to government reports obtained by The Post. But that likely will be easier said than done. Unlike unionized workers — whose contracts ensure they get annual cost-of-living increases — members of MTA management haven’t had a salary hike in four years.
“There are obviously issues with MTA employees and staffing levels and pay scales,” said MTA board member Mitch Pally, who is on the committee that monitors the agency’s big-ticket projects. “I can assure you that management doesn’t make enough money, especially for people who are experienced,” he said. “These are complicated jobs.”
…Federal regulators lamented the “substantial turnover” among contract and MTA staff managers over the past year in their monthly report on the Second Avenue Subway. The agency “remains concerned that the continued staff shortage may impair proper functioning of the project quality processes,” the FTA said in another report, which suggests they hire more managers. In one area of quality management on the Second Avenue Subway, two of the MTA’s three agency consultants are new. Another outside consulting position in the same division also is vacant, according to the report.
This is what we call a vicious cycle. As unionized workers — those who weren’t dismissed, that is — earned raises and will fight for more, the MTA’s management minds have gotten none, and they’re starting to leave. They can get higher paying jobs at organizations that enjoy greater political and fiscal support than the MTA. So then why shouldn’t they leave? If that story sounds similar, it’s because that’s basically what Jay Walder is doing at the end of October.
The solution, of course, is a politically dangerous one. The MTA must be allowed to raise salaries to remain competitive in a global market. The authority can’t afford to see its projects completed slowly, haphazardly or not at all because its salaries aren’t high enough to attract and retain the leaders they need. Ultimately, this isn’t some great insight into the state of things at the MTA, but it’s a lesson few people in Albany and elsewhere have learned. Now it’s starting to get too late.
31 comments
Let’s put a big picture look at the issue. Across the economy, those at the very top have earned more and more over the past 30 years, while everyone else is earning less. But this change never came to the public sector. In fact, the reverse has been true.
As a result, virtually everyone in public sector management is underpaid compared with what they can get outside, and everyone else is overpaid. Public sector managment jobs are undesirable, therefore, and thousands line up to join the public sector rank and file.
My response is this — the quality of public services is not on managment, it is on the unions. They are the ones with the superior pay and benefits. They are the ones who are either providing value in return, or ripping us off.
Speaking of New York City Transit in particular, if you go back 30 years transit workers didn’t do their jobs. There was a tremendous amount of goldbricking and shirking. So when money became available, the TA hugely increased management so there would be lots of people checking up on workers, yelling at them, doing whatever it took. (I know, I worked for the TA in the mid-1980s).
It worked — the productivity of TWU workers went up, and the work got done. But the TA became more top heavy.
Bottom line — with the pay and benefits the rank and file get compared with those in the private sector, they shouldn’t even need management.
As for contract managers, the contractors seem to rob the MTA no matter how many people are checking up on them.
Of course the disparity in the pay between managers and workers has not been regarded as universally good. In fact it’s attributed to high unemployment, stagnation of the middle class, lower tax returns, increased debt — and more or less resulted in every economic bubble of the last 30 years as well. (All that money at the top has nowhere to go but into speculative investments. And the middle classes have borrowed more to make up for their loss in income.)
The solution to me doesn’t seem to make the public sector more like the private sector, but make the private sector more like the public again. Of course no one will suggest that.
One thing I thought when I read this is … what is the MTA doing to make sure that people are moving up the chain of command? Is the MTA and the TWU working on succession plans, management training, etc? And should they be? It seems like more pathways up is one solution to the top of the organizations running out of good managers. There is probably also a need to do more of the Japanese management style of constantly moving around management to have training and cross-training across organizations. I suppose that’s what we have when people are constantly moving to different organizations. But would be far better to have it be intra-org than from org to org. We see this same problem in schools and with city managers. Where there is only a handful of big names that move from one government to another. Often taken golden parachutes with each move. This is a breakdown within both the private and public sectors, actually.
“The solution to me doesn’t seem to make the public sector more like the private sector, but make the private sector more like the public again. Of course no one will suggest that.”
I would. How about not investing in stocks until executive pay is reduced and dividends are increased back to what they used to be?
Who is dumb enough to invest in stocks given a 2 percent dividend yield and no capital gains over the long term? Public employee pension funds. That’s the link between the pension rich and the years in retirement rich.
http://www.r8ny.com/blog/larry....._rich.html
Oh I agree. I would suggest it too. But we have to keep those high dollar political donors (the new oligarchs!) happy. And your solution is an interesting one. Other things like leveraging regulations on banks would also slow the flow of money to the very top of the financial industry which would trickle out across the payment grades.
I disagree that the quality of services is on the unions, not management. They are both equal partners. The unions do not decide where the bus routes are or to keep bus routes that have been outdated for 70 years. It is not the unions who will not invest a dime to make small changes that could save riders 10 or 15 minutes. It is not the unions who insist that every bus route extension must be accompanied by a loss of service. It is not the unions who design routes which make transferring inconvenient increasing two bus trips to three bus trips and then charge an extra fare for the added inconvenience. It is not the unions who decided to have buses bypass passengers going directly to the depot when the following bus has standees or are too crowded to even stop. All those decisions are made by management.
As for contractors robbing the MTA, that is also the MTAs fault. The contractors are merely taking advantage of what they legally can. I was an MTA contract manager for three years in the 1980s and the only times the MTA was ripped off was either when a contact was poorly written enabling the contractor to low bid to get the job and then pile on tons of change orders escalating the cost. The other instance was through no bid sole source contracts that someone high up wanted to award to someone who was politically connected. Other times there was no option to sole source.
“I was an MTA contract manager for three years in the 1980s and the only times the MTA was ripped off was either when a contact was poorly written enabling the contractor to low bid to get the job and then pile on tons of change orders escalating the cost.”
Costs have soared since the late 1980s.
In the private sector, you don’t need to have 5,000 page contracts to keep contractors from ripping you off, because they know if they do, they won’t have the “right” to bid for future work.
And you don’t need an army of managers to babysit workers to make them work, because you don’t need prove someone is shirking beyond a reasonable doubt to fire them.
Now management discresion creates its own problems, such as corruption. That’s the dilemma of discretion.
http://www.r8ny.com/blog/larry.....ml?page=10
And what do you attribute the rise in costs to? If it’s just inflation, there is little the MTA can do about that.
The NYCT at least has a qualified birders list and contractors who screw the MTA are removed from that list and it isn’t easy to get put back on it. Being a contractor for the MTA is not easy. They are all written to benefit the MTA. Shortly before I started in Contracts, a contractor had had a heart attack and died right in a meeting because the MTA was giving him such a difficult time. I’ve never seen Contractors goofing off or an army of people having to watch them as you claim because they know they have a timeframe to complete the job and there are severe penalties for being late. Some cost overruns are just unavoidable, like when asbestos was unexpectedly found in the floors of the first subway cars being overhauled or other problems you can’t for see beforehand.
I’m not sure what the rise in costs is due to, although I worked in Capital Budget at the MTA for three years and tried to find out. They atrribited it to the TA factor — everyone just charges the TA more.
They tried all kinds of different contracting methods — breaking them up into little jobs to get more bids, etc. No help.
One problem — the TA uses the cost in the last contract as the basis for the estimate and budget for the next contract. That is published, and all the bidders know it.
Also, the “official” labor rates, which the government pays, are much higher than what most construction workers actually earn. And I get the feeling that construction companies shift a lot of their overhead — management, consultants — to the public side.
Finally, the construction unions got retroactive pension increases and construction companies cut pension contributions during the stock market bubble, just as in the government. But whereas the government can force people to pay taxes, the construction companies can’t force people to build buildings for more money to cover their soaring pension costs. So the “multi-employer” pension funds are all in crisis. So they try to shift the bill to…the MTA.
Also, every time some organized group or politician said “boo,” the MTA would change the work schedule in a way that increased costs, and just borrowed more.
I saw GOs cancelled because merchants complained about Christmas shoppers not being able to travel from their homes in Manhattan to Brooklyn, at a cost of $millions.
Finally, a lot of operating costs were shifted to the capital budget in the early 1990s. Ie. “reimbursable expenditures.” Currently about $1.4 billion per year.
So it is more of a government problem than an MTA problem why costs have increased.
I don’t see why publishing the cost of the last contract should matter much because no two contacts are alike. The MTA also has the ability to not accept any of the bids and rebid the contract writing it differently if it feels the bids are all too high. I think I saw that occasionally happen.
If you were in Capital Budget between 1983 and 1988, you were on the 12th floor of the Howard Building. I was two floors below you from 85 to 87 and went up there frequently but don’t remember speaking with you, though I’m sure we know people in common.
I was a budget analyst for the TA from 2001 to mid-2004.
In a prior stint with the MTA, however, I was in inventory management at the Howard Building from 1986 to 1988.
As proof, do you remember all the fires and false alarms? You could tell the difference because it was a real fire, rats would come pouring out of the central stairwell.
I remember fire drills but only one real fire. Not that many people leave the MTA and then return a second time. Were you constantly making trips over to 370 Jay several times a week like I was? A total waste of money by moving into the Howard Building.
I was in Inventory Management in 1982 when it was called Sources and Requirements. Still don’t know what that was supposed to mean. By 2001, I already was in Woodside at the Cemtral Electronics Shop.
Bidder list? The mob (Schiavone Construction) is still building the 2nd ave subway after their South Ferry Disaster. Unless you wear turbans and drive around in Ryder trucks (hint hint), nothing else can get you off this list.
I’m going to beat my drum again for the breakup of the MTA.
If NYCT were, once again, part of the City, Bloomberg and Sadik-Kahn would be directly responsible for the success of SAS and would do what they needed to do to make it happen on time.
If LIRR reported directly to NYSDOT, the Cuomo administration would be responsible for ESA and would do what they needed to do to make it happen.
But an amorphous entity that no-one takes responsibility for, the MTA, a political punching bag, is in charge of these two very large infrastructure projects. If they falter, if they’re delayed, if there are still greater cost overruns, who will be held responsible?
At the time, creating the MTA seemed expedient. But it’s outlived its usefulness. It hasn’t done any good. And now its existence is threatening these major projects.
Agreed. The current MTA structure is untenable.
We tried that for 20+ years from the city takeover in 1940 (Board of Transportation, later turned into the TA) until the Transit Authority was put under MTA. What happened? Maintenance was cut way past the bone to keep the fare from rising. Zero new construction once the last bits of the IND were finished after WW2. (And that was a low cost cutback – No one really wanted to keep the Fulton St El a the far end, but it’s still here today.)
Mind you the first several MTA leaders were political hacks and they had big expansion dreams, but didn’t care about maintenance. It wasn’t until Ravitch came in that appropriate priorities were set – the magic phrase is “state of good repair”.
In sum – it’s not the structure – although the current MTA structure is flawed I agree – it’s really the people making the decisions. If Governors and Mayors don’t support the agency then service will suffer and fares will rise, no matter what the org chart looks like.
I tend to think that the political benefits of better management on these projects are few and far between, since they are so long term and pretty invisible to most voters. And any benefits would be more than offset by the sharply negative press of major pay raises, especially when the projects are overbudget and behind schedule. And for a captive state-owned business the only benefits that matter are the political ones. Benefits to riders, unless they translate into additonal votes, have no obvious place. So I’m not too hopeful here.
I don’t think the problem entirely has to do with money. True, Jay Walder left a $350k/year job to take a $924k/year, but when you are at that level, it’s not always entirely about money — it’s about power and about accomplishments. Heck, even Mike Bloomberg is only compensated a dollar a year for his work as Mayor.
I think that conditions as head of the MTA are so bad that nobody wants to take the job, and those who do are so beat down by the untenable conditions that come with it, that they look to leave when they can. Part of these conditions are within the chief’s control, but many — idiotic politicians and labor unions — are not. The entire organization works in a poisonous environment where nothing, and no one, can possibly thrive. Throwing more money at the problem won’t solve it, it will just put the MTA deeper in debt and cause more resentment. The fix needs to be at the governmental level, restructuring the “Authority” to a different type of entity. Jim has a good point up there.
Money could actually be the issue. Bloomberg is independently wealthy. Any salary he could draw as mayor pales in comparison to what he already has – to say nothing of the ability to steer money to favorable businesses. Walder is clearly rich, but he’s not a billionaire; for him, $924,000 a year is real money.
I suspect you’re right, but I still get the sense that Walder is just giving up because there’s not much left he can do. The MTA is what it is, and nobody really puts the feet of the legislature to the fire to change it. Walder is mid-late in his career and probably doesn’t want to waste time on futility.
If politicians were serious, they’d scramble to give him a higher salary to keep him on – and the support he needs to transform the MTA.
I totally disagree that the problem with capital projects has anything to do with a brain drain at the top. Were these projects running any better during the years when MTA managers were receiving 3 to 5 percent raises every year?
The answer is definitely no. While the people on the very top could have been making more in private industry, that applies to a very small percentage of the work force. The economy is so bad that people are just glad to have a job these days. If any could have left for private enterprise, they would have. Although they may not be happy with not receiving a raise, most have no place to go. And I don’t feel sorry for them because for public sector employee, MTA managers are well compensated. Some in fact are overpaid. There are managers making over $100,000 a year who do not supervise anyone and many don’t exactly kill themselves either. When I retired, six years ago, I was earning $80,000. By contrast if in would have been working for a mayoral agency, I only would have been earning about $60,000 for doing comparable work. A coworker of mine retired 9 years ago at $94,000 and his duties were a little more than buying the boss coffee, bringing him lunch, writing performance reviews for about 50 employees he didn’t even know, because his boss didnt want to be bothered with such mundane tasks like writing reviews.
And that brings up another point, how the MTA promotes people, not by merit but by favoritism. The performance reviews are just a joke. Employees should be rewarded for good work, but that rarely happens. Individuality is discouraged. You must go with the flow to succeed, even if the flow is toward Niagra Falls. The Employee Suggestion Program which could be a great tool is just for show. If the MTA were serious about it, it would be headed by a vice president, not a professional/ tech employee who is jot even a manager. As such she cannot challenge suggestion rejections because some departments are too pompous to believe that any employee could have a valuable suggestion that they didn’t think of themselves so they reject perfectly good suggestions.
When there is a fare increase, the first thing the MTA does is give it’s managers’ raises, not improve service. And what is also unfair is rather than giving everyone an equal amount based on performance, the highest paid employees, those making over $130,000 a year get the highest raises since a 3% raise for someone making $150,000 is three times the raise a $50,000 manager receives.
There are many reasons for capital projects being so behind schedule and taking seemingly forever to complete, but turnover of the three or four project heads is not one of them.
Agreed (again). Despite Mr. Walder’s efforts, I’ve seen the same dead weight skulking around MTAHQ for going on 15 or 20 years now. It’s unbelievable how these people get paid well over $100k, and then add benefits and pension, and yet they are still there!! They don’t work, and are not shy about it either.
Correct. I once joked with a former boss after I saw her doing so much personal work on company time why she doesn’t bring in her ironing to do in the office. I had an employee once who spent hours on the phone making personal calls and doing other personal work, then at 3PM had the nerve to ask me for overtime to do the work he had all day to complete. Of course I denied it. The next time he was on the phone with a long personal call, after I warned him that work takes priority, I just pulled the phone out of his hand and slammed it on the hook. I should have written him up.
For every hard working and conscientious MTA office employee, there is another one who is goofing off, and yes, some spend their entire career accomplishing very litte except receiving raises. They aren’t fired because they arrive and leave on time and do not drink on the job and never make any waves. That’s all you need to “succeed” at the MTA if that’s what you want to call it.
But if your goal is to improve transit and make the system run better, then the MTA is not the place for you because there are too many obstacles in your way and too many people looking to pass blame or sabotage your efforts. That is the climate that needs to be changed and something the next MTA head needs to address. You can’t run the agency by looking at numbers, you must understand the social dynamics of the agency which are only known by the people who have worked there. It’s very easy to always blame Albany, the unions, salaries not comparable with the private sector, and other factors while holding the MTA completely harmless as many on this forum do. But the truth is that he MTA can be do a much better job if it just wanted to by changing some of its own internal practices and treated it’s employees with respect and valued their input instead of abusing them.
When there is a fare increase, the first thing the MTA does is give it’s managers’ raises, not improve service.
This hasn’t been true for decades, if it was ever true in the first place — coincidentally you haven’t worked at the MTA for decades.
In case you missed it in Ben’s post here or in the past coverage, management has had fewer wage increases lately than the union workers. In fact, management hasn’t had a raise since the mid-2000s. Trust me; I know.
You seem to disagree with most every post I make accusing me of untruths. I worked for the MTA for 25 years and that was what I remember because I received those increases and remember when they occurred. They never happened when raising the fare was an issue because that would look bad, but right after the increase, no one was checking. It was true until 2005 when I retired.
There are a lot of issues here. The problems are going to get worse – and it’s not about the bosses, but the mid-level people. I can say from experience that if the boss is clueless, but the people beneath him (or her) are good, things can proceed pretty well. But in the reverse things are bound to go wrong, one person can’t be everywhere and watch everything.
If you want things to go better, you need to hire very good people and they are in short supply. (Yes there is some deadwood, but there are a lot of amazing people who keep the service running every day, worth their weight in gold. It’s the later who really matter, if you want the trains to run.) For the subways and trains to run you need a lot of people trained in engineering and technical areas. So you need to compensate them appropriately – it’s not about other government jobs, but the private sector. The US doesn’t produce that many engineers, we pay smart people to become lawyers and financial wizards. For several decades we imported engineers & scientists – any engineering organization, public or private is heavy on immigrants – but since 9/11 we are far less friendly to immigrants. Plus the opportunities in China and India (two large sources) are much improved. So getting those people – and if you want all these high tech systems to function you need those people – will just get harder and harder.
Plus there is a demographic bulge issue: there were a lot of hires in the early 80s as Gunn built a managerial corps. Those people are leaving. So the hole will get bigger. They stayed as long as they did because of the pension. Someone above claimed annual 3-5% raises. Maybe in the 80s, but for the past two decades it’s been a zero about half the years. The pension keeps those people. Get rid of that and turnover will massively increase in the next generation. Which means more time for them to gain experience. You’ll pay more in cash compensation than you save killing the pension. Or you can outsource – good people will get the same compensation but now you pay 20% extra for overhead and profit to the company they “officially” work for. And you lose institutional memory, which is important. A lot of stuff isn’t on the plans.
The issues aren’t new. When I joined (not that far from 20 years ago) I was told how many good people get to the highest union titles (supervisors) and refuse to take a managerial position because it’s far more headaches for no more pay. Less pay even, since managers can’t get overtime and supervisors are the ones who clean up whatever mess needs to be handled.
You make a lot of good points.
Just want to add one thing about when the boss is clueless and the people beneath him are good and keep things running well. The way the performance reviews are structured, guess who gets the credit for keeping the system running? It’s not the mid-level people beneath him but the clueless but lucky boss who gets the promotion or merit based on the hard work of the people beneath him when he shows the progress his department has made to his superiors. They may get something but the boss gets much more.
I’ve seen bosses whose only contribution is to badger their employees into meeting deadlines and demanding reasons when assignments are late, but do nothing to help solve problems or assist their employees in meeting those deadlines. I was once in a new job assignment, and the only help my boss gave me was to show me the room where the file cabinets were, not even to tell me which drawers to look at. I had to figure it out for myself. I’ve also seen employees complete a task in several hours that another less knowledgable employees would take two weeks to do. The only reward for doing the job quicker is to get more assignments to complete.
Top guys were already turning down promotions in the mid-1980s, as I recall.
But having worked at NYCT in two eras, in the mid-1980s and the early 2000s, I can tell you that there were a lot more white collar workers in the latter era. In the first era I had to work like a maniac. After being bored a City Planning, I went back to the TA expecting more action, and instead they couldn’t keep me busy.
Oh incidentally, Walder had been going around telling people at employee forums that he planned to fight to get a managerial increase – it’s even on video on the LIRR intranet at one of their employee meetings – so I guess that’s another promise he ran out on.
Not that I ever really thought he’d deliver!
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