Archive for November, 2011
In final four-year budget plan, no service cuts
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If the MTA is unable to attain a net zero wage increase for unionized workers, operating deficits could top $500 million by 2014. (via)
The MTA Wednesday unveiled its final 2012 budget and the latest set of projections for 2013-2015. Although the budgets still rely on revenue generated by fare hikes in both 2013 and 2015, the authority does not currently anticipate cutting services to balance its books. However, the long-term outlook remains debt-heavy, and the MTA admitted that its four-year projections rest on a precariously balanced dime.
“The MTA has achieved a fragile fiscal stability by reducing expenses and operating more efficiently,” Joseph Lhota, MTA Executive Director, said in a statement. “It’s clear, though, that we’re still feeling the impact of the economic crisis and must continue to reduce costs even as we work to improve service.”
The details, available in full as a PDF here, remain substantially the same as they were in July. Thanks to aggressive cost-cutting measures instituted while Jay Walder was the CEO and Chair, the MTA anticipates annual savings of at least $850 million by 2015. By freezing non-unionized worker pay for three years, reducing administrative overhead and reining in overtime, the MTA has begrudgingly become a leaner organization.
Yet, the long-term outlook is rife with potential problems. Even still, the MTA is relying on two fare and toll hikes that will be designed to increase revenue by 7.5 percent, but those are the safe figures. The MTA is counting on $323 million in what they’re calling “net zero wage savings for represented employees.” In other words, unionized workers will either by taking pay freezes for the foreseeable future or the MTA will have to resort to layoffs. I don’t think John Samuelsen will be too happy to hear that.
The MTA, meanwhile, warned of inherent risks in their rosy projects. For now, the authority anticipates an operating surplus in 2011, a balanced budget in 2012 and a smaller surplus in 2013 before the MTA lands over $200 million in the red by 2015. Much of this deficit, the authority says, is driven by increasing costs of retiree and healthcare benefits that will eat up nearly all of the additional revenue generated by the anticipated 2013 and 2015 fare hikes.
Furthermore, the MTA warns that a variety of factors could turn this rosy outlook sour. Among those factors are a stagnant overall economy; reductions in state subsidies and dedicated taxes; a failure to achieve desired expense reductions; an increase in labor costs due to bargained-for agreements that do not attain the “net zero” wage level; less funding for the capital program. As far as projected budgets go, then, the MTA’s current plan may be a final one that needs approval but it’s hardly set in stone.
The other 800 pound gorilla in the room involves debt on the operating budget and funding for the capital plan. As the MTA seeks to close a significant funding gap in its five-year capital plan, it will do so through a series of measures that will increase its long-term debt obligations. Even as the authority retires debt from the 1980s, more will hit the books. Future New Yorkers will have to pay for both our desired maintenance and theirs.
“In the context of the ongoing economic crisis in New York State, this proposal advances our critical capital investments in an affordable way,” MTA CFO Robert Foran said. “It relies on revenues already dedicated to capital expenses and keeps debt service at a manageable level, with the percentage of debt to capital investment the lowest in 15 years.”
And what of the surplus and budget flexibility? Two MTA Board members have proposed reinstituting services lost to the 2010 cuts. Mitch Pally and Allen Cappelli both called up on the MTA to include a $20 million item in its $12 billion budget that would restore some of the old service. “I don’t believe we can restore all of them, but I believe a portion of them should be – and can be – funded in this plan,” Pally said during yesterday’s MTA Board meeting.
Everyone is fighting for a piece of the pie, and those who inherit the most are those who will have to face the MTA’s mounting pile of debt. For now, the authority will stay afloat, but the long-term outlook is not comforting.
Lhota: MTA must ‘focus on the good that it does’
Posted by: | CommentsEarlier this morning, current MTA Executive Director and future Chairman and CEO Joseph Lhota had the opportunity to attend his first Board meeting as leader of the much-maligned organization. Both Michael Grynbaum and Andrew Grossman were on hand to file reports from the meeting, and it sounds as though Lhota is at least prepared for the daunting challenges he faces over the next six years. “In the last two days, not a moment goes by that I don’t think about the budget,” Lhota said during the meeting. “I have to be optimistic about everything I do, because that’s how you get things done and move things forward.”
The next Chairman talked at length about both the MTA budget and its perception problems. He called the sprawling budget “a living organism” and spoke about improving the way the public views the MTA. “I do think the good that the MTA does, and all of its operating agencies, sometimes fails to get above the horizon,” he said. “Do I think it has a public-relations problem? I think it needs to focus on the good that it does and how important the MTA is to the economy of the region, because it is critical.”
Results will be more powerful for Lhota, who has already admitted the need to maintain a predictable pace for fare hikes that is tied to the overall inflation rate. As with Jay Walder and Lee Sander before him, though, the public will judge him on subway service, station cleanliness and fare policy. No amount of talk can change that reality.
Federal contributions to MTA megaprojects lagging
Posted by: | CommentsDespite a request by President Obama to fulfill full-funding obligations, Congress has authorized slightly less than promised for the MTA’s big-ticket items. As Rep. Carolyn Maloney announced yesterday, in the 2012 budget, House and Senate leaders have granted the MTA $186,566,000 for the Second Ave. Subway and $203,424,000 for the East Side Access Project. Some House Republicans had tried to introduce significant funding cuts, but a bipartisan effort led to the restoration of nearly all of the promised dollars.
Despite these grants, the MTA had been counting on more. The President had asked for $197 million for SAS and $215 million for ESA. Some House drafts of the appropriations bill would have cut those mounts by 21 and 47 percent respectively. These cuts, in the 5-9 percent range instead, are much more palatable. It is, as yet, unclear how the lesser grants will increase the MTA’s two megaprojects.
“These funding levels are not ideal, but the MTA should be able to keep the Second Avenue Subway and East Side Access on track with the amounts provided. These desperately-needed transit projects are creating tens of thousands of jobs literally beneath our feet,” Maloney said in a statement. “At a time when pretty much everyone agrees that job creation should be our number-one priority, I’m relieved that adequate federal funding for two of the best job-creation engines in the New York area has been included in the 2012 budget. Transit projects are among the best economic stimulus programs around – indeed, every dollar spent on public infrastructure boosts our economy by an estimated $1.59.”
Subway operations: one for the city or one for the state?
Posted by: | CommentsSince earning an appointment to the MTA, Joseph Lhota hasn’t said anything at all to the press. He co-signed a letter to New York City district attorneys concerning assaults on MTA employees, but he won’t be giving one-on-one interviews to the press until after his State Senate confirmation hearing. Instead, we’re left with the public record of a one-time Giuiliani official who has little transit experience and has spent the bulk of the past decade in the private sector.
Today in The Times, Michael Grynbaum unearths a gem. During the 1999 brouhaha over a controversial art exhibit at the Brooklyn Museum, then-Deputy Mayor Lhota discussed his views on MTA control in a sworn deposition. As Grynbaum reports, Lhota espoused a view that has generated some debate over the years:
In 1999, while serving as Rudolph W. Giuliani’s deputy mayor, Mr. Lhota stated in a deposition that if he had his way, the responsibility for New York’s subways and buses would lie fully with City Hall, not with the state. “I do wish we controlled the transit authority,” Mr. Lhota said at the time. “I have gone to Albany constantly in my capacity as budget director, because I don’t think the way the transit authority works with the City of New York is very appropriate.”
Reminded of his comments in a brief interview on Tuesday, Mr. Lhota laughed, groaned and then said emphatically that he no longer held the same position. “I believed it then,” he said. “I don’t believe it now.”
…On Tuesday, Mr. Lhota cheerfully conceded that under the Giuliani administration, he was occasionally frustrated by the city’s lack of oversight of the transit system. “It is a matter of perspective,” he said. “I think that statement was consistent with what most budget directors in New York would have said.” But he added, “I do believe the management of the M.T.A. is in much better shape today than it was then, and I do not subscribe to the same thoughts.”
The context and Lhota’s comments are nearly incidental to the idea that has long since plagued New York: Who should be in control of the New York City subway system? For the first half of subway history, New York City was responsible for the subways. Mayor La Guardia oversaw an ambitious reunification plan that brought the IRT and BMT under direct city control, and the Board of Estimates set budgets and fare policies.
Although it made sense for the city to oversee its transit network, the bureaucratic and political structure was rife with problems. Candidates for office turned the subway’s nickel fare into a campaign issue, and from 1904-1948, the fare remained five cents even as inflation devalued that nickel. Eventually, thanks to overly ambitious plans to build out the IND lines and the declining fare revenue, overseeing the subways nearly drove the city to bankruptcy.
When the state assumed control of the subway system and eventually created the MTA, it did so for purposes of financing. Surplus from the Triborough Bridge and Tunnel Authority helped cover the subway operating deficit, and eventually the state folded the regional transit network — including buses and commuter rail — into the MTA in an attempt to streamline operations. Without proper legislative support and authorization, it hasn’t always succeeded.
At this point in time, we know of the problems with the MTA. The state legislature refuses to own the problems; New York City disclaims as much interest as possible. It is at once everyone’s and no one’s problem. If the city were to assume control of the subway, as Lhota proposed in 1999, the state would quickly roll back a lot of funding, and the city would have to find those dollars. On the other hand, any such rollback could come with an expansive home rule grant that could allow the city to toll bridges or institute congestion pricing without Albany approval.
For now, of course, nothing will happen with MTA control. The state will continue to maintain its oversight, and the city, which isn’t interested, won’t be arguing for a larger role in subway management. It’s been that way for nearly six decades, and it won’t change any time soon.
Drilling down on the line segment closure plan
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I appeared on NBC New York with Chuck Scarborough last night to discuss the line segment closure plan.
When word leaked out on Sunday night of a looming Transit plan to engage in partial line-segment shutdowns to speed up necessary track work, straphangers wondered if this would be the end of the 24/7 subway system as we know it. A day later and with an official MTA presentation on the books, we have a better sense of what this means for late-night weekday subway riders. It’s not great news for that relatively small group of riders, but it could mean fewer weekend headaches for the rest of us.
First, Transit addressed the rational behind the plan. Noting that 82 percent of the recent increase of subway service has occurred during off-peak and weekend hours, Transit now recognizes that it can no longer use those times to load up on disruptive work. It’s time, Transit officials said, to get creative.
“We are one of the few transit systems that operate around the clock, so it’s always a challenge to find time to do work on the tracks, especially with ridership up on weekends and overnight,” MTA New York City Transit President Tom Prendergast said. “Closing segments of lines so that we can get in and get the work done quickly benefits everyone. It’s safer for workers, less disruptive for riders and gets projects done more quickly for everyone.”
Just how much quicker the project get done will determine the future of this pilot, and it’s important to note that this project has two distinct components. The first involves partial line segment closures. These are set to occur for four nights in a row once per quarter on one Manhattan trunk line at a time from 10 p.m. to 5 a.m. The following table lists the line, first-quarter shutdown dates, service area and number of impacted customers. The authority claims only a 10-15 minute increase in commute times, and it’s clear that, based on transit redundancies, those folks on the East Side in Midtown will have to walk the further for alternate subway service.
- 4, 5, 6: January 9-13, no service from 42nd St.-Grand Central to Atlantic Avenue, 38,500.
- 1, 2, 3: February 13-17, no service from 34th St. to Atlantic Avenue, 23,000.
- B, D, F, M: February 20-24. No service from 59th St. to West 4th Street, 35,000.
- A, C, E: March 12-16. No service from 59th St. to Jay St, 39,000.
I’m not yet sure how this will impact service on the E, F or 1 trains. The work here will involve track and signal repair as well as trackbad cleaning.
The second part of this plan is the one that should be drawing more headlines, but as it impacts fewer commuters and all in the Outer Boroughs, it hasn’t drawn as much scrutiny. For a few distinct capital projects, the MTA will engage in a continuous line shutdown over a series of days. By doing so, the authority will quickly complete capital projects and then have fewer weekend service changes.
The MTA has identified four projects that will impact riders and subway service. First, the authority is planning a nine-day shutdown of all Manhattan-bound F service from Parsons to Forest Hills. Second, the D train will run only local in both directions for nine days from Norwood to 145th St. Third, for 16 days, all D trains will terminate at Bay Parkway. Fourth, for 16 days, there will be no 2 service between 241st St. and Nereid Avenue.
Drilling down on the Forest Hills work, Transit says this nine-day shutdown will eight weekend and 20 weeknight shutdowns for a savings of $1.3 million — or 21 percent — for that project alone. Furthermore, Transit estimates that 90,000 customers would experience 150,000 hours of delay with a shutdown instead of 190,000 customers experiencing a combined 225,000 hours of delayed travel for weekend and off-peak work. Of course, knowing the MTA’s on-time rate when it comes to delivering projects, these projections should be taken with a grain of salt, but these are the numbers upon which the MTA is making its argument.
Ultimately, putting such a line shutdown program in place involves a balancing out. How can the TA provide enough service around the clock? What work schedule is least disruptive to the overall patterns of commuters? As the Authority says, “No time is a good time to do work.” If the line-segment shutdown plan — both for routine maintenance and capital projects — can improve our commuters in the long run, it is at least worth a shot.
Samuelsen: TWU has ‘no intention of striking’
Posted by: | CommentsTalk about trial by fire. One day after starting as the MTA’s Executive Director, eventual CEO and Chairman Joseph Lhota is set to kick off negotiations with the TWU today, and already, he’s drawing praise from union leaders. Whether he can sustain that initial burst of good will may dictate whether or not the TWU strikes in mid-January as its contract runs out.
In an interview with Brian Lehrer this morning, TWU President John Samuelsen talked at length about the looming negotiations and his relationship with those in charge at the authority. Never one to miss an opportunity to bash the departed Jay Walder, Samuelsen spoke optimistically of the negotiations while stressing the hard line the TWU intends to toe.
“I’m more optimistic regarding having a labor/management relationship with Lhota. That was impossible under his predecessor,” he said. “I think Lhota has demonstrated already a willingness to open a dialogue with the union on a host of issues. I think it was the right thing to do for Lhota to reach out to the union and jointly sign a letter to the district attorneys in the five boroughs.”
As the talk turned to the negotiations, though, Samuelsen stressed how the TWU would not give into threats from management. “We’re not ready to do that,” Samuelsen said of a zero wage increase, “We don’t believe the other unions should have done that. We’re not in those circumstances, and we certainly won’t be bullied into accepting wage freezes by the threat of layoffs…We do not intend to accept zeroes or a wage freeze.”
Bullying seemed to be a common theme. Samuelsen noted how Walder had threatened the MTA with layoffs if they did not drop the three-percent wage hike, awarded to the TWU by an arbitration panel in 2009. Walder was forced to dismiss the workers when the wage hike went through, and Samuelsen claimed a dubious triumph. “Our folks are almost all back to work, and the riding public is still suffering for it,” he said of the service cuts. “We demonstrated last year that we’re not going engage in that type of bully negotiation and we’re not going to do it this time either.”
The key moment came toward the end of Lehrer’s interview when the WNYC host challenged the TWU president on a strike if the contract situation is not resolved by January. Samuelsen hedged. “I’m not going to make any promises, but certainly the union doesn’t want to go on strike and has no intention of striking. But for me to make a promise would be immature…I mean, premature,” he said with an amusing slip of the tongue.
Both the MTA and TWU are in a tough position during the negotiations. The TWU knows Lhota was brought in keep costs down and toe a hard line on wage increases. Lhota knows the TWU will not be forgiving in its ask. As negotiations begin today, two months in advance of a potential strike date, all eyes will be on these two leaders. Can we avoid another mid-winter subway worker walk-out? The ghosts of 2005 sure hope so.
Learning from the Select Bus Service success story
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During yesterday’s Transit Committee meeting, the topic of conversation between the assembled MTA Board members and agency president Thomas Prendergast turned to bus ridership figures. As I’ve detailed here before, bus ridership is suffering from a slow, steady and long decline. As subway ridership nears record highs, the buses just aren’t drawing passengers.
Under fire from Charles Moedler and others, Prendergast reiterated the MTA line that the 2010 service cuts, in which numerous bus stops were eliminated and service was pared down across the board, were not the main drivers behind this decline in bus service. Rather, Prendergast said, the weak economy has stiffled discretionary trips and the MTA is recapturing many former bus riders through the subway system instead. After all, who wouldn’t rather have a ride faster and more reliable than a New York City bus?
As a contrast to this doom-and-gloom back-and-forth over the steady decline in bus ridership, city and MTA officials launched the latest Manhattan Select Bus Service route along the 34th St. corridor, and NYC DOT issued a progress report praising the M15 SBS. Regular old local bus service may be on the wane, but New Yorkers are flocking to the Select Bus Service routes, and the differences in service could provide an easy path to a better bus network throughout the city.
The story along 34th Street is a familiar one to us. After a rancorous debate amongst residents who did not want an ambitious Transitway in front of their lobbies, the city settled for a typical SBS route instead. Buses along the corridor will feature pre-board fare payment (with proof of receipt), dedicated and off-set bus lanes and camera enforcement of those lanes. Despite the reduction in plans with the death of the transitway, city officials are trumpeting SBS success stories anyway.
“Select Bus Service is proving to be a success wherever we install it,” said Mayor Bloomberg. “Travel times go down, ridership increases and safety improves with Select Bus Service. We expect to see the same positive results here on 34th Street and we will continue to look for more opportunities to expand this great service. We all know that when mass transit works well, more people use the service, which helps to free up our streets – a boost for our economy and our environment.”
At the 34th St. unveiling, DOT and the MTA also revealed a progress report on the SBS M15. So far, the new bus service is a success. Ridership along the SBS corridor from around 25,000 limited bus riders per day in 2010 to 35,000 SBS riders per day in 2011. Although some of that increase has come from riders shifting from the M15 local to the SBS routes, overall M15 bus ridership is still up by around 11 percent per day as overall bus ridership drops by 5-8 percent.

Meanwhile, travel times are dropping as well. An end-to-end run on the M15 Limited would take nearly 81 minutes. Forty of those were spent traveling while 19 were spent stopped at the bus stop, 18 at red lights and three minutes spent at other delays. The M15 Select Bus Service takes 68 minutes end-to-end. Of those, 35 are spent in motion and just 12 are spent at bus stops while the delays due to red lights remain the same. That drop — from 19 minutes to 12 at bus stops — is the key. By removing the line at the point of payment, the MTA doesn’t even need flashing buses to improve service.
So then can we see the key to better bus service in the stories of the SBS? By improving frequency along 1st and 2nd Avenues and speeding up the on-boarding process, the MTA has made bus service attractive, and it was rewarded with increased ridership. Elsewhere, buses run less frequently and involve long waits to board. Thus, ridership is down, and the MTA seems to know it. “If we are able to further reduce travel time through faster boarding and improved fare collection, we can expect an additional increase in ridership of five to ten percent,” Darryl Irick, the Senior Vice President at the Department of Buses, said.
If the authority is intent on improving bus convenience and combatting declining ridership, the answers are in Select Bus Service. Pre-board fare payment and regular and predictable service would go a long way toward improving the bus network. The buses simply must be treated as something more than second-class transportation. Otherwise, ridership will decline on every route but the glorified Select Bus Service.
Media Hits: NBC New York tonight, Good Day New York tomorrow
Posted by: | CommentsWhile I’m still waiting for you all to RSVP to my party, I have another little bit of self-promotion to plug this evening. At around 7:30 p.m. tonight, I’ll be making another guest appearance on NBC New York’s news hour with Chuck Scarborough. I’ll be talking about Joseph Lhota and his expectations, Transit’s plan implement line segment shut-downs and a recent report on the successes of Select Bus Service on the East Side. Tomorrow morning at the bright hour of 7:15 a.m., I’ll be on Fox 5′s Good Day New York to discuss the line segment shut-down. If you’re around a TV, give it a watch. I’ll post the video as soon as I can.
Reminder: Second Avenue Sagas 5th Anniversary Soiree
Posted by: | CommentsLet’s do this again now that it’s not late on a Friday afternoon. As hard as it is to believe, this little site of mine is turning five years old at the end of the month, and what better excuse to we need to have a party. On Thursday, December 1 at 7 p.m. in the Vice Room at The 13th Step on 2nd Ave. between East 9th and 10th Sts., join in the birthday bash for Second Ave. Sagas. Everyone is invited, and admission is free. We’ll have some food, some sweets and a cash bar. Stop by for some subway schmoozing, grab a beer and say hi. It’s been a great five years because of you, my readers, and it’s time to celebrate.
For those who are going to attend — and that should be every single one of you — I have a small request: Please RSVP on the EventBrite page for this event. As I need to have a rough headcount, registration is free. Looking forward to seeing you all there. [Second Ave. Sagas Soiree]
Joseph Lhota kinda sorta takes over
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Former deputy mayor Joseph Lhota started at the MTA today as its executive director.
As the MTA is debating a new plan to speed up disruptive track work, the authority’s new boss is taking over. Although Joseph Lhota cannot assume his role as the MTA Chairman and CEO until after State Senate confirmation hearings set for early 2012, the Cuomo nominee and former Giuliani administration official joined the MTA today as its Executive Director, and he will be responsible for day-to-day operations. Andrew Saul will continue to serve as Acting Chairman until Lhota is confirmed in Albany.
“The MTA is the engine that drives our economy and makes our way of life possible here in New York, and we have a responsibility to operate our service as efficiently and effectively as possible,” Lhota said in a brief statement. “The MTA is facing a number of difficult fiscal and operating challenges, including funding our vital capital program and continuing to improve service in tough economic times. My focus in the next couple of months is understanding this organization from top-to-bottom, and listening to our employees, customers, and community leaders as we work together to shape an agenda and improve this vital service for all New Yorkers.”
His first official duty involved a rare joint statement with TWU President John Samuelsen. The two leaders asked New York City prosecutors to pursue maximum penalties for those who assault MTA employees. It is a good sign indeed for the upcoming TWU negotiations that the two parties are working together to make a public show of support.
In addition to the arrival of Lhota, the MTA announced a handful of other leadership changes as well, including one that is raising some eyebrows. Nuria Fernandez has joined the organization as Chief Operating Officer, and Catherine Rinaldi, former MTA and LIRR General Counsel will now serve as the authority’s Chief of Staff. Charlie Monheim, the outgoing COO, will remain on board as Director of Strategic Initiatives, and he will be working on the MTA’s technology projecting and overseeing labor relations.
The intriguing departure though involves Diana Jones Ritter. Brought in as a so-called efficiency expert, Ritter was to serve as the MTA’s Managing Director, but her appointment drew criticism. No one is saying much about her departure, but it seems as though the MTA will find its efficiencies elsewhere.









