Archive for Capital Program 2020-2024

When I was in Japan at the end of August, Donald Trump tweeted about the Second Ave. Subway. It wasn’t clear what inspired the president’s mid-morning statement on a seemingly stalled project; after all, it didn’t appear to make its way onto one of the numerous TV news shows Trump often live-tweets.

It was, needless to say, a very strange happening, and no one — not least of all Gov. Andrew Cuomo or the MTA — knew what to make of it. There is no full funding grant agreement in place between the MTA and the Federal Transit Administration yet, and Trump has since offered no further indication that he knows much of anything about the federal involvement with this subway construction project. Cuomo eventually spoke with U.S. Transportation Secretary Elaine Chao, but even then, no one had much to say about the presidential statement.

With the release of the MTA Capital Plan last week, the Second Ave. Subway and the dollars associated with this long-awaited subway expansion project are back in the news. As part of the 2020-2024 Capital Plan, the MTA is proposing to fund and build Phase 2 of the Second Ave. Subway. This three-stop, 1.5-mile northern extension of the current Q train would see the train stopping at 106th St. and Second Ave., 116th St. and Second Ave., and 125th St. and Lexington Ave., connecting to Metro-North and the East Side IRT while bringing subway service to East Harlem. This project is expected to use parts of tunnels dug out in the 1970s and may cost over $6 billion.

That’s not a typo, and it’s not quite clear what the final cost will be. The full capital plan, released toward the end of the week as a PDF, indicates that the cost for the project could be as high as $6.9 billion, but in comments earlier in the week, Janno Lieber, the MTA’s Chief Development Officer and president of MTA Capital Construction, spoke about the varying figures. The project could come in for $5.7 billion or it could cost more. Here are Lieber’s initial comments on the price tag:

The financial plan for Second Ave. Subway Phase 2 is a 50-50 split with the federal government and the MTA. Because we had $1.24 billion in the existing plan and because we under the federal government rule are providing for the financing through our own financing mechanisms, so in the federal government’s view this is a $6.2 billion project. We view it as $5.7 billion. They’ve said, as we’ve gone through the process with them, we would like you to add some additional contingency. So in order to make the numbers work, we’re adding roughly $1.6 billion in this plan for our side of the 50-50 split with the federal government.

It’s worth noting again that the MTA does not have a full funding agreement in place with the feds. Lieber, who declined to comment when asked about Trump’s tweet, told reporters that the MTA’s working relationship with the feds has been positive. “They have,” he said, “basically validated our assumptions about the constructability of the project, our budget, our schedule. They asked us to add a little bit of contingency, but it’s been a positive interaction and now we’re ready to get a final approval.”

Once the feds sign off on the funding split, the MTA expects to begin work shortly thereafter. That was, after all, the point of funding engineering work in the 2015-2019 Capital Plan, but it’s still not clear when shovels will be in the ground. A few years ago, the agency had hoped to begin utility relocation work before the end of 2019, but that timeline seems aggressive. The MTA did not say if Phase 2 is still expected to be in revenue service by 2027.

But this issue of the cost looms large. Why is the Second Ave. Subway going to cost $2.5 billion per kilometer? Can the public believe the MTA is serious about cost containment when the price tag has increased to astronomical levels? And what do these dollars say about the agency’s ability to plan future transit expansion projects down the road?

When Dana Rubinstein of Politico New York asked Lieber a similar question, he started talking about fire codes. While there is some truth here, Lieber’s answer was an unsatisfactory one, but it’s a response you should read for yourself to understand the MTA’s siloed perspective on these cost issues. These are Lieber’s words:

“I think we have to have a longer conversation about the comparisons to other places. I’ll tell you this: One of the reasons we have expensive subways is that we comply with the fire code which requires you to get people out. Every body who rides trains, and we have 1000 people plus on a train, to get them out of the station at a certain pace. Other systems which run trains that have fewer people on them do not have some of the same costs associated with vertical circulation to get people out.

There are a lot of things that make New York different, but what we’re doing is already demonstrating that we can control costs by shortening project times, by delivering fewer change orders, quicker turnaround, paying contractors faster. We’re already demonstrating that we can and will build projects faster, better and cheaper, and I’m confident the Second Ave. Subway will prove that out.”

Does Lieber have a point? In a way, yes. Nearly ten years ago, while assessing plans for the Cairo Metro’s Line 4, a conglomerate of Japanese railway engineers assessed global fire code standards (PDF) and found that if NPFA 130, the U.S. standard, “is applied strictly, the structure of the tunnel and station tends to be bigger and the cost of the construction also tends to be higher.” NPFA 130 requires more frequent in-tunnel emergency exits than other international systems, but that doesn’t mean costs should orders of magnitude higher in New York.

There are, needless to say, plenty of other cities in the world with fire codes, as the JICA report details, and plenty that are building subways at costs far lower than ours. Paris, for instance, is building a four-mile, six-station extension of Line 11 of the Metro at a cost of approximately $1.4 billion. At Paris costs, the entire Second Ave. Subway could be built for not much more than the Phase 2 price tag, and at U.S. costs, this Line 11 extension would cost between $13-$16 billion. These cost discrepancies are a crisis that will soon preclude New York City from any meaningful future subway expansion efforts, and it’s not clear, based on Lieber’s comments, that the MTA can even begin to approach solving this crisis.

What happens next seems clear. At some point, the FTA is likely to approve a full-funding grant agreement for Phase 2 of the Second Ave. Subway at an estimated cost of $6.2 billion, and the MTA will move forward with this project. No one in Washington or New York City will stop to ask if we’re getting enough subway for $6.2 billion, even as Paris could build 12 miles of subway and 18 stations for the same amount. We’re fall back on New York exceptionalism — the fire code this time; the density next time — as excuses and watch at much-needed or much-ballyhooed plans such as the Utica Ave. Subway, a cross-Bronx line or the Triboro RX die at the alter of obscene costs.

Lieber meanwhile told reporters that Phase 2, even with the price tag, isn’t the end of the Second Ave. Subway. When asked if Phases 3 and 4 are in the cards, he said, “They are very much part of the vision of a completed Second Ave. Subway, but boy are we focused like all get-on on Phase 2 which really will make a difference to East Harlem and Central Harlem and makes good on a commitment that’s been out there for 75 years.”

Seventy-five years and billions of dollars that just don’t go all that far in New York City. Hopefully, it won’t take 75 years to figure our way out of this cost crisis.

The overview for the MTA’s next five-year capital highlights over $50 billion in spending priorities.

After months of anticipation and behind-the-scenes wrangling over spending priorities, the MTA on Monday unveiled a massive $51 billion five-year capital program that largely codifies Andy Byford’s Fast Forward program by bolstering investment in signal modernization and aggressive spending on ADA accessibility initiatives. The overview of the plan released Monday — a PowerPoint presentation rather than the detailed plan itself — also commits the MTA to complete Phase 2 of the Second Ave. Subway but at a cost of over $6 billion, making this 1.5-mile, three-stop expansion project the most expensive subway in the world.

Although the full plan with itemized spending details has yet to see the light of day, the MTA Board is expected to vote on the actual Capital Plan next week before it heads to the state’s Capital Program Review Board for consideration. With a proposed spend far in excess of the MTA’s previous five-year capital plans, its approval is no sure thing, but the scope is just what the MTA needs to embark on a path toward modernization.

The element of the capital plan most likely to jump out at the public is, of course, the price tag, and the MTA isn’t messing around this time. The agency has been challenged by Gov. Andrew Cuomo to produce a transformational proposal, and the agency’s first draft of its 2020-2024 Capital Plan is the largest in history, featuring a 70% increase over the 2015-2019 Capital Plan. Whether the MTA can actually spend this much — or at least commit to spending this much, as Janno Lieber, the agency’s Chief Development Officer, insisted they could in remarks to reporters on Monday — over five years is an open question, and the issue of cost containment hovers over the MTA’s spending plans, as it has for the past decade.

Still, calling the plan “historic and transformational…for our customers,” MTA Chairman and CEO Pat Foye extolled its praise in comments on Monday. “The next five-year plan,” he said, “will include unprecedented levels of investment equitably distributed against the MTA’s subways, buses, commuter railroads and bridges and tunnels. The result is a plan that will build on the approach and institutionalize the successes of the Subway Action Plan across the MTA and finally modernize and transforms our subways, buses and commuter rails into a 21st century efficient, accessible and reliable system for our customers.”

Signals, ADA upgrades, SAS Phase 2 headline the plan

So who gets what in this long-withheld capital plan? Let’s break down what we know so far:

As you can see, the overwhelming bulk of the spending is focused around New York City Transit and, in particular, investments in the subway. Considering that a large share of the capital funding is going to be generated via the congestion pricing revenue, this sounds right to me.

As we drill down on the spending priorities, we see that these investments aren’t what are traditionally considered to be “sexy” from a political perspective. The opportunities for ribbon-cuttings and New Year’s Eve galas are few and far between, but the projects are designed to maximize the capacity of existing infrastructure to provide more frequent and reliable service to more people. To that end, the MTA wants to spend $7.1 billion on signal modernization for six new line segments as follows, largely building on existing installations:

  • Queens Boulevard (E/F): Union Turnpike to 179th St.
  • Astoria (N/W): Ditmars Boulevard to 57th St.
  • 63rd St. Tunnel (F): 21st to 57th St. – 6th Ave.
  • Fulton (A/C): Jay St. to Euclid Ave.
  • Crosstown (G): Court Square to Hoyt/Schermerhorn Sts.
  • Lexington Ave. (4/5/6): 149th St.-Grand Concourse to Nevins St.

Notably, MTA officials would not promise that all six sections would be completed within five years. Rather, the MTA committed to starting the work during the next five-year capital plan. When this first phase of the CBTC installation is complete, MTA officials noted that 50% of passengers would enjoy the benefits when the work is done. Technical details, including maintenance costs of maintaining two signal systems until the entire subway network is CBTC-ready, remain hazy.

Along with signal modernization comes rolling stock investment, and to that end, the agency will spend $6.1 billion on 1900 new subway cars — which equals approximately $3.2 million per car. I’ve asked the agency to clarify how many of these cars will include open gangway designs and am awaiting a reply. Considering how much of the capital plan is focused around increasing capacity without expanding the system, the 8-10 percent capacity gains due to open gangways should be standard in all NYC subway cars going forward, but the agency seems hesitant to commit to open gangways until the R211 open-gangway pilot is completed.

The MTA also plans to invest $5.2 billion in accessibility improvements, and the dollars cover full ADA access for 70 additional stations. Station improvements account for $4.1 billion, and $300 million of that will go toward fare evasion initiatives, Lieber and Foye noted. It’s not clear if that line-item includes re-designed fare control areas that eliminate emergency exits, a major pain point for unpaid entrances to the subway system. Track rebuilds account for $2.6 billion, and the remaining NYC Transit subway dollars will be funneled into the Second Ave. Subway. (I’ll have a separate post on that soon.)

Buses account for $3.5 billion more, and that includes the purchase of 2200 new buses (including 500 electric buses) and a fleet expansion of over 175 buses. These bus upgrades are a key part of the congestion pricing equation as the MTA needs to be able to offer more transit service from the get-go to account for the mode shift from personal automobiles to transit that congestion pricing should encourage.

The combined $10.4 billion for the area’s two commuter rails includes funding for rolling stock, signals upgrades, station improvements, and Penn Station Access, the four-stop Metro-North expansion in the Bronx that brings New Haven Line Metro-North service into Penn Station.

Congestion pricing a key source of funding while political battles loom

And what of the funding? Here’s a snapshot of the MTA’s expectations:

Click to enlarge.

As you can see, nearly half of the funding comes from bonding out new revenues, including from congestion pricing and the mansion tax. That’s the good news.

The bad news is that the other half is political. Will the feds pony up $7.8 billion, especially if Trump wins a second term? Will the city contribute another $3 billion to what is a state agency? Will New Starts money be available for the Second Ave. Subway?

It seems likely that most, if not all, of this money will materialize. Most notable is the 50-50 funding split between the city and state and the overall reduction in state contributions from $7 billion to $3 billion. “It is imperative that the subways run on time,” Seth Stein, a de Blasio spokesperson, said in a statement on Monday afternoon. “We are reviewing the plan to ensure that it helps get New Yorkers moving and that taxpayer dollars are used responsibly. We will have more to say soon.”

MTA officials said they were going to brief the city on Monday, and it’s not clear how that briefing unfolded. But during conversations with reporters on Monday morning, agency officials clearly telegraphed the expectation that city funds will help bolster the ADA spending. It’s a politically astute approach at a time when the mayor has been absent on the campaign trail pushing his doomed attempt at running for the White House as it essentially pushes the city into a corner: Fork over the $3 billion or risk the bad publicity of denying much-needed ADA accessibility investments.

In terms of the feds, the President’s extremely random tweet about the Second Ave. Subway indicates either that some cable TV news morning show was talking about the Second Ave. Subway or that federal dollars will continue to flow to the MTA, albeit perhaps slower than the used to. Still, the state legislature has a say, the price tag is a steep one. It’s not guaranteed that the $51.472 billion will all be there for the taking.

Reactions: Fast Forward vindicated; advocates call for more transparency

As the transit community digested this overview Monday, reactions poured in from all quarters. At the outset, many of the good governance groups fighting for better transit noted that the document the MTA shared on Monday (which is available here as a PDF) is an overview and not the capital plan. As I mentioned, we do not have a full breakdown of planned projects or project costs. We don’t know which stations are targeted for rehabilitation or which projects are holdovers from previous capital plans. The MTA also did not release a refreshed 20-year needs assessment which often informs the capital plan. (The last 20-year needs assessment was released in 2013, a year earlier in the cycle.)

Reinvent Albany highlighted the lack of details, a comment echoed by other advoates:

Today, the MTA released an 11-page slideshow partially summarizing the details in its 2020-2024 capital plan. To comply with state law, the MTA will have to hold a vote on the complete draft plan at its September 25th Board meeting, which is in seven business days. Reinvent Albany focuses on MTA governance and transparency. From that perspective, the MTA’s release of a slideshow that does not differentiate between core versus expansion projects, lumps together expansion costs and omits large capital projects is troublesome and again raises questions about MTA’s commitment to public transparency.

I agree with the need to see the full plan, but we can see a brighter future for the city and its subway systems. I have a few thoughts as well on what this plan means for the future of the subway and Andy Byford’s continued stay in New York City. Already on Monday morning, Dana Rubinstein wrote of a detente between Cuomo and Byford, and this capital plan is a vindication of Fast Forward. It includes all of the signal modernization projects Byford requested and more ADA upgrades that he had initially planned. While MTA officials haven’t used Fast Forward by name, that its priorities are to be funded is a sign that Cuomo has realized he and Byford are on the same team and that, as I wrote last week, Byford’s successes are Cuomo’s successes.

During comments this morning, Byford said that the capital plan “delivered beyond my wildest expectations” and that he was “ecstatically happy” that the priorities the city needs are funded. New Yorkers should be ecstatically happy too. I’ll have more on the dollars and cost containment (or lack thereof) later, but for now, this is a clear sign that the MTA is on a path toward modernization. It’s the investment the city and system need to become successful, and it shows that Cuomo has perhaps learned the right lessons from a year of picking fights, in the press or otherwise, with the people who can deliver him his greatest infrastructure success.

I’ll end then with the man who has the final say in all of this — Governor Andrew M. Cuomo. The verbose chief executive let rip a lengthy statement on Monday, challenging everyone to toe the line and quickly:

“Last week I laid out my priorities for the MTA Capital Plan, including improving signal technology, increasing accessibility, addressing quality of life concerns, ensuring equity for LIRR and Metro-North Railroad, and upgrading bus service – and I will review the details of the plan to make sure it fulfills those priorities. The Senate Leader, Assembly Speaker and Mayor of New York City must approve the plan in order to move forward as they each have unilateral discretionary veto power.

For decades the MTA was mismanaged and underfunded – that is why in 2017 we invested $836 million for the Subway Action Plan and $8 billion in State capital funds and $2.6 billion in New York City Capital funds. The success of that plan is inarguable – it led to the recent 84% on-time performance rate, a six-year high – but its implementation was delayed, and that cannot be repeated with this new plan. We have secured $25 billion during this year’s legislative session that will go directly towards the MTA’s capital needs outlined in this plan, and I support an additional State investment of $3 billion, to be matched by the City, that will go toward making our subways more accessible. We have an historic opportunity to institutionalize the lessons learned, build on the progress made under the Subway Action Plan and make crucial upgrades so riders get the 21st century transit system they deserve.”

The full plan will be presented to the MTA Board next week. The Board will vote to approve. And then it’s out of the governor’s control and onto the state mechanisms. Will this $51 billion dream become a reality? We’ll find out in short order.

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The MTA Capital Plan remains hidden from public view, but priorities are coming into focus. (Photo: Marc A. Hermann / MTA New York City Transit)

During a press conference earlier this week, Andrew Cuomo let loose a few of his thoughts on the MTA. “The MTA is responsible for the MTA. That’s why they call it the MTA,” he said, before adding, incredibly, “I can’t order the MTA” to act. Obviously, as we’ve seen with the ongoing emergency order, the opening of the Second Ave. Subway, the decision to halt subway service in light of a forecast of snow, the color of the tiles in the Brooklyn-Battery Tunnel, the Subway Action Plan and numerous other examples, this simply isn’t true, and Governor Cuomo, who makes key decisions regarding the hiring (and firing) of top executives is firmly in control of the MTA politically and practically. As I’ve written extensively lately, the MTA Board is a largely powerless but convenient political foil for Cuomo to hide behind when he doesn’t wish to take full responsibility for his own MTA.

To that end, it’s amusing to me when Cuomo goes through the political theater of sending a letter to the MTA Board suggesting or urging they do something, as he did this week with regards to the missing-in-action 2020-2024 Capital Plan. To recap: The capital plan is an exercise in construction through the MTA goes every five years. It usually involves a very public process with the release of a 20-year needs document followed by a draft of the five-year plan, some public comments and a re-submission of the plan for a vote, followed by a political fight over funding. This year, the funding arrived early in the form of congestion pricing, but the plan hasn’t been released to the public. I’ve been told that’s due to internal wrangling over dollars and meddling by the Governor himself. The MTA Board is expected to vote on a plan no one in New York has seen in twelve days, and that’s no way to run a railroad.

So back to Cuomo’s letter. You can read this missive right here. In it, he reminds the MTA that passing the capital plan is a legislative mandate and then outlines his priorities “before it is prepared and presented.” It seems a little late in the game to outline priorities for a document that’s supposed to be approved on September 25, but I digress. The priorities though are all over the place:

  1. The progress on making stations accessible for people with disabilities has not been acceptable. It is a legal and moral mandate that the MTA accelerate the number of stations made accessible and the timeframe in which accessibility is achieved.
  2. “Quality of Life” issues in the subway have deteriorated. The number of homeless, dangerously mentally ill, fare evaders, aggressive “pan handlers” and worker attacks has skyrocketed. Station redesign securing access to the tracks and worker safety is essential. Riders must be provided a safe environment and additional MTA police with proper equipment, training and facilities is essential.
  3. State of the art signal systems must be installed to speed up the trains and long-delayed construction projects such as East Side Access, Grand Central improvements, the Moynihan Farley Station, Long Island Rail Road improvements and Second Avenue Subway must be prioritized.
  4. The New York City outer boroughs and Long Island Rail Road and Metro-North Railroad must receive an equitable distribution of resources.
  5. New buses should be hybrid or electric and distributed throughout the City, and you must work with New York City to find ways to improve speed and service. New train cars must be procured without the multi-year delays in past contracts.

The quality-of-life issues are a red herring; they’re not part of the capital plan and solving them is a task largely outside the scope of the MTA’s authority. If Cuomo wants to combat homelessness, for instance, he should support aggressive affordable housing policies. The same can be said about providing safe and effective treatment for those suffering from mental illness. Plus, the MTA is already trying to combat these quality-of-life issues as they can (either by hiring more cops or expanding outreach services).

The “equitable” distribution of resources, similarly, is a bit of false priority as well. Some analysis has long suggested that Long Island the the Metro-North territories have gotten more than their fair share of capital dollars over the years, and either way, these areas never suffer for lack of representation in the five-year capital plan. As I’ve noted in the past as well, Cuomo’s renewed interest in East Side Access as it finally hits the home stretch is transparently political in nature. He wants a ribbon-cutting and some credit for a project that’s been an ongoing mess every single day of his tenure as governor.

The interesting parts are the rest: the accessibility imperative and the signal system. These are the underpinnings of Andy Byford’s Fast Forward plan, and a few senior MTA sources have told me that the Fast Forward priorities will be in the capital plan whether named as Fast Forward or not. The remaining fights seem to be over the dollar figures attached to each priority. Does this represent a thaw in the icy relationship between Byford and the governor? It’s hard to say, but it does seem to suggest the Governor has realized that he’ll gain more accolades by adopting the good work Byford and his team are already pushing than he would by forcing out or minimizing the passionate and competent team Byford has assembled. That’s good for New York. That’s good for Andrew Cuomo. And that’s good for the subway system.

Now, all that’s left is for the public to see this plan before the MTA Board holds its symbolic vote. We have twelve days and counting.

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