Archive for Capital Program 2015-2019
When the MTA first published its 2015-2019 Capital Program toward the end of last year, it seemed that Phase 2 of the Second Ave. Subway would soon see the light of day. Without pinpointing the total funding need for the stretch of the line that will run from 96th St. and 2nd Ave. to 125th St. and Lexington, the MTA had proposed a $1.5 billion line item that included project management and design, real estate acquisition and initial tunneling. The best laid plans would have seen initial tunneling being in 2019 with the remainder of Phase 2 funded in the 2020-2024 capital plan.
And then nothing happened. Governor Andrew Cuomo, the ultimate arbiter of all things MTA in New York State, didn’t make an effort to ensure the capital plan would be funded until mid-summer, and even then, he used the MTA to wage a petty political battle against the city and Mayor Bill de Blasio. By the time the two leaders set aside their childish fighting, nearly a year had elapsed between the MTA’s initial proposal and ultimate approval of the capital plan. For the MTA, this year meant uncertainty over funding and an inability to move forward on projects for which dollars were not guaranteed. Phase 2 of the Second Ave. Subway was one of those casualties.
When the MTA unveiled its revised 2015-2019 Capital Program last week, funding for the Second Ave. Subway had taken a big hit. Instead of a $1.5 billion request, the agency now included just over $530 million — still a lofty sum and one that would cover the full costs for Phase 2 were we in, say, Paris or Madrid — but the $1 billion cut was the single biggest reduction in the revised plan. The $535 million would fund “environmental, design, and real estate and project support to undertake preliminary construction work, such as utility relocation.” The MTA still plans to build Phase 2, but after a 13-month delay in capital funding approval, they claim to no longer have the time or resources available to spend $1.5 billion on the project before the end of 2019. With fewer dollars available, the MTA could make the decision to ask for more in four years.
And then everything hit the fan. Fallout was loud and angry with politicians accusing the agency of further delaying a massively delayed project, and the optics of withholding money for the Harlem-based sections after building the route through the Upper East Side looked even worse. If you take the MTA at its word, the agency still plans to build Phase 2 when it can, but the when looks a little more distant today than it did a year ago. Plus, New Yorkers aren’t keen on trusting the MTA. Can you blame them?
On Tuesday, local politicians struck back, and they were loud. Urging the MTA to just build the damn thing already, they condemned the agency for cutting the budget now. This was positive activism from politicians who were turning to a familiar whipping boy. In a letter to the MTA, Reps. Carolyn Maloney and Charles Rangel expressed their displeasure with the situation. “We understand that the MTA will be moving forward with preliminary engineering and design, but it is disappointing to know that this project is once again being short-changed,” they wrote. “As you know, the long history of the Second Avenue Subway has involved repeated incidents of funding allocated and withdrawn, plans made and cancelled, ground-breakings celebrated and construction halted. We hope that this substantial funding cut does not signal the MTA’s lack of commitment to building phase 2 of the project.”
The two members of Congress posed a series of questions that need to be asked. They questioned the timetable for Phase 2 — something that is currently a real mystery. Noting that the MTA hasn’t yet requested federal dollars, a move that would commit the agency to build all of Phase 2 or refund a billion dollars to the feds, they asked when the agency plans to apply for New Starts money and enter into a full funding agreement. And importantly, they asked about the total expected cost, another mystery.
Yet, I couldn’t help but think that it was long overdue and years too late. Politicians tasked with oversight duties should have been asking these questions years ago to ensure that Phase 2 started once (or even before, as the Final Environmental Impact Statement contemplated) Phase 1 was completed. These questions need to be answered, but based on the MTA’s speed and competence (or potentially lack thereof), the MTA cannot start Phase 2 work much before 2020. As MTA CEO and Chair Tom Prendergast said in a statement in response to Tuesday’s happenings, “[The $535 million] reflects the work we can realistically accomplish in the next four years given the regulatory and engineering constraints on heavy construction in a densely populated section of Manhattan.”
Meanwhile, the city too put some pressure on the MTA, and this too seemed oddly timed. Just last week, Polly Trottenberg, who is, thanks to Albany inaction on other potential appointees, Mayor Bill de Blasio’s only true representative on the MTA Board, praised the MTA’s capital plan with nary a peep about funding for the Second Ave. Subway. Yesterday, de Blasio’s words seemed to indicate that this cut was unexpected. “I do think it came as a surprise to many people that there was a change in the funding,” he said, “and I think that has to be reconsidered to make sure that everything is being done to move phase two as quickly as it can be done.”
The mayor, as you may recall, recently promised to contribute over $2.5 billion to the MTA’s capital program. Apparently, he wasn’t concerned enough with the details to follow up on how the city’s money will be spent and whether the MTA should be focusing on certain priorities. It is another move that shows the mayor’s lack of attention to transit matters, and it gave Cuomo, via Prendergast, the opportunity to ding de Blasio. In his statement, Prendergast highlighted how Trottenberg a week ago had called the new capital program a “very terrific capital plan.” What a mess.
At this controversy continues to boil, I hope New York City’s political representatives can learn a thing or two. First, paying attention to what the MTA is doing before it gets too late to do anything to change it is important. Imagine if Maloney and Rangel used their influence years ago to find out why Phase 2 planning hadn’t yet begun. Imagine if politicians were willing to hold the MTA’s feet to the fire on the outrageous costs associated with these capital projects. Imagine if de Blasio were to pay attention to transit spending priorities before they become news and not after. Imagine if the MTA were engaged in an aggressive effort to build out the Second Ave. Subway as fast as possible rather than as slow as possible.
The MTA knows it’s facing an uproar. As Prendergast said, “We have committed that if we can speed up the schedule to begin tunneling the East Harlem phase sooner, we will pursue a Capital Program amendment to do so. Governor Cuomo has made clear that he would like us to accelerate work on the Second Avenue Subway, and we are actively looking for ways to deliver the project faster.”
It is also not too late to right this wrong, but it will take considerable political effort and a lot of money. Phase 2 may now not finish until 2025 or beyond, and Phase 3 — the southern part — was originally supposed to take another nine years to complete. Maloney and Rangel should question that work as well. How much longer can we wait?
In the MTA’s original 2015-2019 Capital Plan, New York City seemed oddly underrepresented. The Second Ave. Subway had a big pot of money coming its way, but while the investment in Transit was steep, the benefits were behind the scenes. Such is the nature of a system in need of modernization, but in the revised 2015-2019 Capital Plan, certain improvements are more obvious.
One of those upgrades comes to us on the border of East New York and Brownsville, where the 3 train and the L train cross. As a remnant of history, the L train at Livonia Ave. and the 3 train at Junius St. cross, but there’s no transfer. You can think early-to-mid 1900s New York City politics for that quirk of the subway system, and this spot has long been one of the most obviously lacking transfer points. For years, East New York and Brownsville residents have clamored for the transfer, and early this year, politicians renewed their calls for the MTA to correct this oversight.
According to the capital plan documents, the transfer will be built out in 2018 and is part of the MTA’s accessibility efforts. The agency will spend $15 million on ADA upgrades and $30 million on an in-system transfer between the two stations. Perhaps a free out-of-system transfer would be cheaper, but $30 million is a rounding error in a $28 billion capital plan. It’s well worth the psychological impact of the work.
In another sense, though, even this minor move is an important one for the MTA and for the city. When was the last transit improvement geared toward East New York or Brownsville? As the city struggles to deal with the fallout from the decision to remove $1 billion from the funding request for Phase 2 of the Second Ave. Subway, the MTA is spending some money to upgrade transportation options in an area that often doesn’t see much attention. As Stephen Smith noted on Twitter, people are noticing:
Random people on the B38 are bonding with each other over the upcoming 3/L transfer.
— Market Urbanism (@MarketUrbanism) November 3, 2015
By investing in areas that don’t often see transit improvements, the MTA can send a message that transit matters. This move can get New Yorkers out of their cars and onto the subway. It can lead to an embrace of transit as something responsive to people’s needs and as something that can improve lives. These aren’t the busiest of stations, but it’s a need that has long been obvious. It’s also something that city residents shouldn’t have to fight this hard to see become a reality.
Across New York, there are a few other obvious transfer points that could yield benefits in the form of convenienced riders without a significant corresponding drop in revenue. I’m sure those who wish for a similarly obvious connection between the G and the J/M/Z in South Williamsburg are awfully jealous, and they have every reason to be. These minor but important upgrades simply shouldn’t take years to realize.
The MTA has a penchant for angering everyone. Whether it’s rush hour delays or crowded trains or fare increases, the agency is not high on New Yorkers’ lists of favorite things. But rare are the days when a line item in a budget draws as much ire as the MTA’s move to cut $1 billion in funding for Phase 2 of the Second Ave. Subway did on Thursday. Even though the agency still plans to spend half a billion dollars on design prep and real estate acquisition before 2020, lingering doubts over the project’s future have pushed this move onto front pages around the city.
In a certain sense, the MTA is trying to be practical. That there is a gap of at least three years between the expected revenue service date for Phase 1 and the date they can start construction work on Phase 2 is an indictment of other issues with the MTA’s ability to execute on large problems and plan appropriately. The MTA should have ensured that design work for Phase 2 was wrapped by the time Phase 1 opens so that the transition to work on the next section would be seamless. But the opportunity has passed. Instead, the MTA will prep everything necessary to start work during the 2020-2024 Capital Program.
That is, if you take the agency’s word at face value, and few do. As the implication of the $1 billion reduction in spending sunk in on Thursday, no one was happy. Some noted that the MTA would no longer be applying for federal grants that may or may not be available in five years. Others worry that this is the beginning of the end of the Second Ave. Subway. After 100 years, we’ll get three stations and nothing else.
But a funny thing happened on the way to 125th Street: New Yorkers grew aware of the fact that the Second Ave. Subway was actually under construction and would actually open soon, and they want more. The statements on Thursday came fast and furious. House representatives Carolyn Maloney and Charles Rangel issued a joint statement bashing the decision, calling the MTA’s painfully slow construction timeline a “huge mistake.” The two said:
“While we are delighted that the state and city were able to reach an agreement to move the MTA’s Capital Plan forward, we are deeply concerned that roughly one-half of the reduction in the cost of plan is coming from the Second Avenue Subway. The current plan includes only $535 million for the Second Avenue Subway, most of which will be spent for preliminary engineering and design, as opposed to the $1.5 billion originally proposed. The MTA has also dropped its assumption that it would receive New Starts federal funding for the subway during this capital plan. New Yorkers have been promised a full build Second Avenue Subway since the 1920s. Based on the current schedule, one hundred years will have passed and we will still be waiting. This ‘go slow’ approach to the Second Avenue Subway is a huge mistake. ”
Meanwhile, other local politicians hopped on board. Robert Rodriguez, an Assembly representative from Harlem, condemned the move. “The MTA’s vote to drastically cut the 2nd Avenue Subway budget is shocking and indefensible,” he said. “For over a century, New Yorkers from the Lower East Side to Harlem have patiently waited for transit equality to become a reality.Yet, the MTA’s approved plan has dashed those hopes and told New Yorkers north of 96th Street that they don’t matter. This cannot stand. I call on the MTA to correct this mistake, demonstrate fairness and leadership and include funding in the capital plan to complete the Second Avenue Subway up to 125th Street.”
In comments to WNYC’s Kate Hinds, he called the move an “economic injustice.” Relying on Rodriguez’s statements and words from others, Hinds wrote a fantastic and comprehensive rundown of the move which included a look back at how the MTA used the Second Ave. Subway to court money from the mayor and then cut the planned funding once the mayor ponied up the money. It is a must-read on this subject.
In other coverage, The Times wrote about the near-universal condemnation of the funding move, and even the New York Post editorial board, hardly a bastion of bleeding-heart liberals, noted the class issue inherent in the MTA’s decision, even if they used to bash de Blasio again. How do you build a subway line through the Upper East Side while delaying the one through, as Rodriguez put it, “a lower-income community that certainly needs the access as much as the first phase”?
So what exactly can the MTA do here? They don’t have time to restructure the capital program again. In fact, the funding battle between the Mayor and the Governor which led to a delay in approval of the capital plan is a major reason why Phase 2 is being shifted from the 2015-2019 plan to the 2020-2024 plan. The MTA simply couldn’t execute because the agency didn’t know how much money it would have. What they can do is stress a firm commitment to building Phase 2, secure the promise of federal dollars and look to put shovels in the ground as soon as possible. It’s not a perfect solution, and it raises the question of why Phase 2 isn’t ready to start the day after Phase 1 wraps. But it may be the best they can do. Either way, this has become a major flashpoint issue, and there’s no easy way out.
Nobody ever likes to grovel. It’s that antiestablishment aversion to brown-nosers we all develop in middle school, but yet, there comes a time in every person’s career when, if one is not the ultimate, one must grovel. Thus, when the MTA sent out a press release on the MTA Board’s approval Wednesday of the revised and pared-down $29 billion five-year capital plan, agency head Tom Prendergast had to grovel.
“Thanks to the leadership of Governor Andrew M. Cuomo and the hard work of our dedicated MTA staff, this revised Capital Program will reduce costs and deliver projects more efficiently without cutting any projects or the benefits they will bring to our customers,” Prendergast said. You can almost hear him gritting his teeth via press release.
Cuomo played the part. Calling Wednesday a “great day,” Cuomo easily dismissed the months of childish fighting. “I challenged the MTA to revise its Capital Program in a way that reduced costs and delivered results more efficiently, without cutting any major projects or the benefits they will bring to commuters – and that is exactly what this new Program does,” he said. “Along with the State’s historic $8.3 billion investment and significant funding from the City to pay its fair share, this will mean a stronger, safer and more reliable MTA well into the future.”
Take that for what you will (and keep in mind that Cuomo’s funding solution likely just means more MTA debt). Now that the capital plan approval is on its way toward full approval, the reality is that the MTA isn’t exactly underfunded. It can tap into a massive amount of money to keep up current projects and implement future ones. Whether the agency spends well and gets bang for the buck is certainly in doubt, but the money, in some form or another, is there.
So with the capital plan approved — and one that relies more on city input — what’s changed? When the MTA first unveiled the 2015-2019 Capital Program during the summer of 2014, we delved into the request for funds for Phase 2 of the Second Ave. Subway and a variety of other measures, from signal work to Penn Station Access to the MetroCard replacement and beyond. The new plan shows how even a contribution of just a few billion dollars, as Mayor Bill de Blasio eventually ponied up, can skew things.
Notably and most importantly, the idea that Phase 2 of the Second Ave. Subway will see shovels enter the ground before the end of the decade has gone up in smoke. Instead of proposing $1.5 billion for the northern section of the long-awaiting subway line, the MTA has pared down its request to slightly over $500 million, and nearly all of this money is expected to come from federal sources. Here’s MTA-speak on the project:
The proposed 2015-2019 Capital Program provides $535 million to commence SAS Phase 2. This is a reduction of $1.0 billion compared to the previous 2015-2019 capital plan proposal that was submitted in September 2014, reflecting funding availability and the ability to implement scope within the plan period. Included are environmental, design, and real estate and project support to undertake preliminary construction work, such as utility relocation. The balance of the work necessary for operation will be funded in future capital programs.
In plain English, this means that the MTA no longer expects to start the actual construction work on Harlem-bound part of the Second Ave. Subway until the 2020-2024 capital plan comes due. Previously, the MTA had expected some contracts for tunneling to be issued by 2019, but in the capital plan and subsequent comments on Wednesday, officials indicated that this was no longer a realistic timeline, considering the MTA’s ability to undertake the work and available funding. For what it’s worth, the billion-dollar reduction for Phase 2 of the Second Ave. Subway is the single biggest line-item cut in the new capital plan.
Now, this move doesn’t mean that the Second Ave. Subway extension to 125th St. and Lexington Ave. is dead. In fact, it commits the MTA to spend half a billion dollars on this vital part of the line. Rather, it means New Yorkers will have to wait longer for those stations at 106th, 116th and 125th, and, as time leads to more dollars spent, it’s likely to cost more as well. This is a symptom of the phased approach indicative of the funding constraints placed upon the MTA. It’s also a result of the ballooning East Side Access costs as the MTA needs to secure the dollars to finish that project. So we’ll wait until the mid-to-late 2020s instead. What a crazy thought.
Meanwhile, the new capital plan has more projects worth considering over the next few days. As a laundry list, the MTA, under pressure for some reason from de Blasio, will spend a whopping $5 million on the initial studies for a Utica Ave. extension (something I’ll revisit shortly) and will spend the same amount on studying converting Staten Island’s North Shore rail right-of-way to a bus rapid transit route. Investments in the new fare payment system have jumped from $250 million to $419 million, an indication that the MTA actually wants to see this project through, and the agency has yet again vowed to deliver countdown clocks throughout the subways by 2020 as well.
The agency has also signed up for a few more long-awaited subway-related projects. After years of requests, the agency will finally offer a connection between Livonia Ave. on the L and Junius St. on the 3 for a cost of $30 million, and the 42nd St. shuttle may see a big overhaul. (Look for more on that project soon too.) The MTA will also spend $740 million — up from $561 million — on ADA-related projects, including new entrances for the L train at Avenue A.
So that’s a lot to digest, and it barely scratches the surface. You can read through the revised booklet if you wish; the MTA has published it as a pdf. I’m not thrilled about the elongation of the Second Ave. Subway timeline, and I feel it’s indicative of the way the MTA operates (or doesn’t) these days. That’s the cost though of a 10 percent reduction in budget. If that’s the “bloat” Cuomo referred to when he bashed the initial capital plan, I don’t have high hopes for subway expansion until a more transit-friendly governor takes over in Albany. Either way, though, $29 billion is nothing to scoff at.
The topic of MTA debt is not a particularly sexy one. I’d rather write about how the subways are unsustainably crowded and how the MTA has no real plan for immediate relief. I’d rather write about light rail efforts through Queens, the latest goings-on in London with regards to overnight Tube service or some thoughts on closed entrances. But MTA debt is too important to ignore. Even if you’re tempted to close the tab or allow your mind to wander, stick with me for a few hundred words today.
The latest round of news about MTA debt comes from — you’ll never believe this — Gov. Andrew Cuomo. A few weeks ago, when Gov. Cuomo and Mayor Bill de Blasio magnanimously did their jobs and came to an agreement on MTA capital funding, the two politicians hailed the deal as something groundbreaking. The MTA, the argument went, had unprecedented support from the state and unprecedented support from the city. Everyone wins!
If that sounds too good to be true, well, you’ve been paying attention. Despite announcing around $9 billion in state support for the MTA, Cuomo has not once said how he plans to generate this money. Had he wanted to see through a Move New York-style traffic pricing plan, he could have, but that would have gone against the ethos of Mr. Muscle Car Governor Cuomo. Instead, he’s like to turn to the tried-and-truth method of totally screwing over New York City subway riders: debt.
Bill Hammond, now writing for Politico after his unceremonious ouster from the struggling Daily News, had the story:
At best – and assuming it holds up – the deal settles only the latest turf squabble between feuding politicians: With a $10 billion hole to fill in the MTA’s $26 billion five-year capital plan, Governor Andrew Cuomo committed that the state will contribute $8.3 billion while Mayor Bill de Blasio agreed to chip in $2.5 billion from city coffers. But this divvying-up exercise was a crisis only to the extent that governor made it one, as a tactic to offload a fraction of the headache onto his declared friend, fellow Democrat and favorite punching bag at City Hall.
The real political heavy lifting to be done involves not who collects that $10 billion tab, but who gets stuck with paying it – and how and when. And whether the MTA will walk away with a short-term cash infusion, or with the sustained base of funding necessary to build and maintain a halfway up-to-date mass transit system…The overdue debate on covering the $10 billion gap should begin to get serious in January, when Cuomo is promising to spell out, as part of his annual budget proposal, exactly how he intends to raise the $8.3 billion. De Blasio, too, will have to account for his share in budget documents due in the next three months.
This should be interesting. The Daily News has reported that Cuomo will likely borrow some or all of his amount – which is legitimate, given that it will be used for long-term investments in infrastructure – and that he is ruling out tax hikes. But $8.3 billion would add 15 percent to the state’s already prodigious debt load of $55 billion. Even if spread over a 30-year term, the annual payments on those new bonds would be roughly half a billion dollars – corresponding to nearly a 10 percent increase over current debt service.
The Daily News report Hammond mentioned is right here, and it’s a tells a tale of more debt. The MTA may have to borrow to cover the state’s contributions, and it’s not clear if the MTA or the state would fund the debt. The MTA simply cannot afford more debt. The agency is already carrying $35 billion in debt — debt that’s funded through fare revenue. More would simply push the cost of the capital plan onto the shoulders of riders, no matter what Cuomo says.
So Cuomo’s solution has been anything but a solution. Without identifying a revenue stream, debt simply becomes something we must fund in the future, and that’s no way to solve transit funding problems. Will New York wake up the problems of debt? It’s not looking good for the near future or the far future, and that’s not a positive development for anyone.
With the celebration over, the hungover can settle in. Now I’m not talking about the Royals or the Blue Jays; those two teams are still celebrating their victories this week. Rather, I’m talking about the MTA and its capital plan. After relief over this past weekend’s surprise agreement on capital funding, we’ve had to face the reality of the MTA’s spending decisions this week. We know that everything costs too much, and no one wants to tackle cost reform. But what are we actually getting for our $28 billion?
To only kinda sorta answer my own question, we don’t know with 100% certainty what the capital plan will be. The MTA has trimmed a few billion dollars and still has to cut $700 million. There’s also a chance that Mayor Bill de Blasio will wake up tomorrow and suddenly care about transit projects in the city, thus requiring the MTA to adjust some plans for city-focused projects. That is, however, a remote likelihood, and we can lean on the previously-released proposal for a $32 billion plan for guidance.
The highlights are a bit underwhelming unfortunately. The big-ticket expansion plans involve Penn Station Access, a post-East Side Access plan being pushed by the Governor that will bring Metro-North trains into Penn Station. The proposal involves four stops in the Bronx that cost far too much, and no indication that the MTA will rationalize intra-city commuter rail fares to encourage ridership to and from the Bronx and Manhattan. It’s a fine proposal on its merits, but it needs some help.
The other big-ticket item is Phase 2 of the Second Ave. Subway, and I have to assume this is where the bulk of the city’s dollars will go. Unfortunately, though, this is a request for only some of the money the MTA needs for Phase 2, and the agency has been tight-lipped on how much the northern extension will cost. We likely won’t see Phase 2 open until some time in the mid-2020s, but at least the MTA is continuing with this work. Why it will take 2-3 years after Phase 1 opens to start the next segment is a question yet to be answered.
Beyond those two items, the capital money is going to bunch of technology upgrades that are long overdue. The MTA hopes to complete installation of the Help Point system, something that may or may not be a total waste of money (and I do hope to revisit that soon), and the badly-needed double-tracking project for the LIRR’s Ronkonkoma Branch will wrap. Positive Train Control will become a reality for Metro-North and the LIRR, and CBTC will become a reality for some New York City subway lines. Ideally, countdown clocks will expand to the B Division’s lettered subway lines, and as Cuomo noted this week, 1000 new subway cars — including new rolling stock for the C train — are on the way.
As far as the funding split goes, the mix tends to favor the commuter rail lines on a ridership basis, but you can make the argument that all MTA divisions need the dollars. New York City Transit will get $17 billion, the overwhelming majority of the money, but only 20 stations will be eligible for upgrades under this plan. The LIRR and Metro-North will split around $5.7 billion, but is this all even enough?
Some MTA sources I’ve spoken with wanted the agency to ask for $40 billion off the bat so the reductions would still lead to a high capital plan. Without spending reform though, money simply feeds the beast. Meanwhile, as we learned a year ago, not everyone is too enthusiastic about this plan. The CBC in particular levied harsh criticism toward the MTA for failing to provide adequate cost-benefit analyses or sufficiently prioritizing state of good repair work. Staten Islanders too don’t see much value in it.
Ultimately, the MTA has an overwhelming number of repairs to make, a finite amount of money, and systematic problems with cost control. It’s an imperfect solution, but it must go forward as the alternative is far far worse. Does it help the MTA adjust to a life where trains are crowded well out of normal peak hours and service can’t match demand? That’s hard to say, and if it doesn’t, we’re in trouble. As the money continues to flow, though, now is time for some reforms on costs. Will someone take up that mantle?
It’s been three days since Mayor Bill de Blasio and Governor Andrew Cuomo announced their surprise deal on MTA capital funding, and we’ve all had enough time to declare Cuomo the winner. After months of bruising media battles, the city gave up more money in exchange for a hollow promise from the state to continue to follow a toothless law. Despite his rhetoric on affordable housing, De Blasio hasn’t embraced transit as a cause, and it showed.
For now, though, that’s neither here nor there. The state and the city still have to identify funding sources, and claims that no new taxes or fees will be implemented to generate $9 billion from the state seems laughable. The resistance to a rational plan to cut Manhattan congestion and generate transit revenue is almost as absurd as the fight between the mayor and governor over funding splits. But there’s another problem that now comes to the forefront and that problem is cost.
During the debate over funding responsibilities, the discussion on costs often took a backseat. The usual crew of transit advocates in New York City aren’t too keen to press on costs. They’re content to fight for dollars without questioning whether those dollars are being spent appropriately or efficiently, and as a sweeping generalization, few people would claim they are. Do the MTA’s costs make sense? No, of course not. Is anyone willing to do anything about it? Not yet.
The MTA’s high capital costs — and, to a lesser degree, operating costs — is a topic I’ve covered before, most recently in April when Dana Rubinstein reported that most transit organizations in New York City relied upon Alon Levy’s work to discuss high costs. This isn’t to say Alon’s work isn’t worthwhile; as I said then and reiterate now, it’s the most thorough examination of New York City’s high costs that exists in the transit sphere. His 2011 examination of ongoing capital projects remains ever green, and even without the absurdly expensive Fulton St. Transit Center or WTC PATH hug, New York City is home to the three most expensive underground rail projects in the world on a per-kilometer basis. At $1.5 billion per kilometer, the 7 line extension wasn’t the most expensive because the Second Ave. Subway costs $200 million more per kilometer, and that’s not the most expensive because East Side Access costs nearly double that.
It’s time to figure out why. In her story earlier this year, Rubinstein blamed “labor costs, work rules, managerial incompetence, the spaghetti of infrastructure tangled beneath Manhattan’s streets, a political firmament without incentive to tackle hard issues.” She didn’t touch upon another issue — corruption — that few are willing to discuss on the record, but corruption too serves as a reason for New York City’s high costs. Is anyone willing to rein them all in?
At this point, with the MTA’s capital plan funded to the tune of nearly $30 billion when all is said and done, it’s hard to argue that the agency is underfunded. It certainly has a backlog of projects due to decades of deferred maintenance and can’t seem to get out of its own way with regards to technological improvements such as the widespread installation of countdown clocks or a fare payment system a bit more cutting edge than the late 1980s/early 1990s MetroCard system. But the agency now also has access to a ton of cash, and imagine just how far it could go if the Second Ave. Subway cost $600 million per kilometer — second on Alon’s list to London’s Crossrail project — rather than three times as much.
Taking on costs and the forces driving them up requires far more of a politically bruising fight than securing some funding. Everyone wanted the funding, but few of the recipients of the funding, especially those in the construction industry, want lower construction costs. But without some attempt at rationalizing MTA construction costs, we’ll never have the subway expansion we need or a modern system with bells and whistles New Yorkers enjoy in other cities. And that’s a battle that someone needs to fight.
For those of you who like to unplug during the weekend, you may have missed New York City’s biggest Saturday news drop in years. After months of unnecessarily feuding over MTA financing, the governor and mayor agreed on a capital funding split that puts the city on the hook for $2.5 billion and presents a clear win for Andrew Cuomo. I’ll have more on how this deal may affect certain projects. Today, we look at the politics involved.
In The Times Michael Grynbaum explores how this deal won’t stop the political fighting between Cuomo and Bill de Blasio. Two car guys haven’t exactly had their “come to Jesus” moment with regards to support for transit. The Journal meanwhile delved into the ins and outs of the deal. Here’s Josh Dawsey and Andrew Tangel:
According to people familiar with the matter, the agreement that the city will commit $2.5 billion for major repair and expansion projects was largely reached because neither side saw a continuing fight as politically advantageous—and recognized the downsides of battling over funding while the city’s subways were increasingly packed and deteriorating…
For at least a week Mr. de Blasio and his aides wanted to end the fight but also didn’t want to be seen as capitulating to the governor’s demands, people familiar with the matter said. Even as the governor and the mayor quarreled with each other in public, top aides to the mayor discussed how much to offer Albany and called business leaders, advocates and others to gain support. They finally decided to offer $2.5 billion to the state Wednesday night—hoping to strike a deal soon thereafter—and one was essentially completed by late Friday…
Still, the deal over MTA funding presented unanswered questions. Some observers wondered how specifically the state and city would come up with the money. Others wondered how the MTA could reduce costs from its five-year plan without also cutting back on the scope of the projects. Much of the work involves major repairs to keep the system running safely or improvements to bring equipment such as signals and switches up to modern standards.
The authority is expected in coming days to weigh how it might potentially alter some projects’ timing without scaling them back, according to a person familiar with the matter. The MTA’s board is expected to vote on a revised plan later this month. There are also questions about how much sway the city gained from the deal over MTA projects within the five boroughs. Mr. de Blasio said Saturday that the agreement would give riders and taxpayers a stronger voice.
If you read between the lines — or if you read the lines — of Tangel and Dawsey’s report, the city thinks it got something when in reality, it got nothing. Cuomo promised to follow a toothless law, and he’s unlikely to sweep up much, if any, from the MTA anyway considering how politically loaded such a move has become. It’s also not worth the headache over $20-$30 million every year when $8.3 billion is on the table.
Meanwhile, what exactly did the city get? The mix of projects is unlikely to change, and if, say, the MetroCard replacement effort or B division countdown clocks continue to lag, the MTA can point to the $700 million gap between the state’s request and the city’s promise as the cause. It’s ugly all around.
Ultimately, the two car guys remain what they were, but the MTA gets its money. The fighting was unnecessary and led to no new reforms on the spending side that are badly needed. What happens in five years is, as de Blasio and Cuomo figure, someone else’s problem.
In a rare moment of political collaboration that ends months of unnecessary bickering, Gov. Andrew Cuomo and Mayor Bill de Blasio have agreed on a funding scheme that will close the MTA’s capital budget gap, the Governor’s office announced this afternoon. As part of the agreement, the city will contribute $2.5 billion to the 2015-2019 plan, and the MTA will trim $700 million from the spending plan through either “further efficiencies or necessary program reductions.” Although numerous questions remain regarding this deal, the MTA will likely not have to slow down or suspend work on ongoing capital work, and the summer (and early autumn) of endless finger-pointing can draw to a close.
“Our transit system is the backbone of New York City’s, and our entire region’s, economy,” the mayor said in a statement. “That is why we’re making an historic investment – the City’s largest ever general capital contribution – while ensuring that NYC dollars stay in NYC transit, and giving NYC riders and taxpayers a stronger voice. I look forward to continuing to partner with the Governor and the MTA to ensure a transit system that reliably, effectively, and safely serves all of its riders.”
As announced by Cuomo, the deal includes the $8.3 billion from the state to which the governor agreed in July, the $2.5 billion from the city and numerous conditions that may or may not have teeth. According to the press release, the city money includes $1.9 billion from “direct City sources” and $600 million from “alternative non tax levy revenue sources” (such as those funding the Grand Central upgrades). The entire agreement is also dependent upon a series of conditions though if one party breaks a condition, it’s highly unlikely that the plan will fall apart. The conditions are as follows:
- The City and State will fund on the same schedule on a proportionate basis.
- Projects in the City which are funded by the $2.5 billion committed by the City (including projects funded through non tax levy sources agreed to with the MTA) will be planned by the MTA Board in collaboration with the City representatives on the MTA Board, with priority consideration given for projects and timing based on input from the City.? Likewise suburban projects which are funded by the suburbs will be planned by the MTA Board in collaboration with suburban representatives on the MTA Board and with priority consideration given for projects and timing based on input from the those suburban communities.
- The State will not divert any funds or fail to provide any funding committed to this Capital Program or due and owing to the MTA for any other expenses unless in accordance with the provisions of Executive Law 182 passed in 2011. Likewise, the City will not divert any funds or fail to provide any funding committed to this Capital Program or due and owing to the MTA for any other expenses.
Let’s start with the lockbox: This prong of the agreement is entirely pointless. Generally, Cuomo has gone after MTA operations money and not MTA capital money. Additionally, this is an agreement to adhere to a law that has no teeth. Cuomo has in fact raided MTA money since signing the lockbox bill, and nothing in this agreement will prevent him from doing the same. Whether that’s a risk the MTA will take in exchange for a guarantee of over $8 billion is a question to consider.
Meanwhile, the other conditions are words on paper, and it seems as though de Blasio got outmaneuvered at a time when he could have put his foot down on MTA doings. It’s unlikely that city officials will force changes to the MTA’s capital plan as many of the big-ticket items, including Phase 2 of the Second Ave. Subway, are already subway-related. So what did de Blasio get, other than a $2.5 billion bill and months of media boxing with someone who seemingly outfoxed him?
Still, there’s a palatable sense of relief over the fact that this is, for now, over. Yes, the city and state legislatures still need to approve funding sources (as the Citizens Budget Commission reminded us in a statement released via Facebook photo), but that’s a fait accompli at this point. We’ll have to see if the repeated statements that there is “no appetite” in Albany for a congestion pricing plan hold up, but one way or another, the spending will get approved, and the MTA can move forward without on pause on work that must be completed. As Gene Russianoff said in the Straphangers’ statement praising the deal, “Hallelujah!”
I’ve tried not to write too much about the political infighting between Gov. Andrew Cuomo and Mayor Bill de Blasio over the MTA’s capital plan. As I’ve said in the past, it’s generally just embarrassing for both New York City and New York State. Instead of supporting the city’s most important transportation asset, our two top elected officials have spent most of 2015 yelling at each other through media statements or various proxies and allies and have done nothing to bridge a spending gap that threatens the tenuous reliability of our subway service. As October dawns, nothing has changed.
Here’s the latest: de Blasio hasn’t ponied up more city money because (a) he doesn’t have much control over the MTA and (b) he’s concerned about Cuomo’s ability to reallocate MTA money. I’m less sympathetic to the control argument as de Blasio could ensure that his board appointees act as a solitary voting block, but he has a point about Cuomo’s raiding of the MTA. The governor has reallocated around $270 million for the MTA, and city contributions are often moved around to bolster the commuter railroads rather than NYC Transit’s assets.
Still, according to the Daily News, de Blasio may be willing to contribute an additional $1 billion to the MTA’s capital plan. The News reports that the money would come with “strings attached,” but it’s not clear what those strings are. Perhaps the city would mandate the dollars go toward Phase 2 of the Second Ave. Subway or a Utica Ave. extension. It remains to be seen how the city will find the dollars as the News mentions nothing more than a “revenue-generating scheme.” Could that be a nod to the controversial Move New York plan?
Meanwhile, Cuomo, who hasn’t yet issued one word of explanation as to where the $8.3 billion the state plans to contribute will come from, claims no funding deal is near. This is, to put it mildly, a problem. De Blasio says he wants to see “a real vision for what the state’s commitment will be to the MTA going forward” before adding more dollars, and Cuomo says “If the city wants more control, let them pay $8 billion. Then we’ll talk about more control.” This isn’t politics or leadership; it’s petty bickering.
If the two sides can’t resolve their dispute before the end of the year, the MTA is going to have to start scaling back work because it won’t have access to funding sources to pay contractors. Without an approved capital plan, the agency can spend only on contracts from previous plans. Anything new will have to wait, and work on maintenance and repair efforts will begin to slow down. That leaves our state and city leaders with less than three months to hammer out a plan. They owe it their constituents to figure this one out. It shouldn’t be this hard.