Earlier today, the MTA Finance Committee held a special meeting to update the MTA Board on worsening financial projections. According to reports from the meeting, the MTA could be facing a crippling $1.2 billion deficit if the agency cannot find economic relief from the city, the state, a fare hike or measures suggested by the Ravitch committe.

Sewell Chan and William Neuman filed a report on City Room:

The Metropolitan Transportation Authority faces a $1.2 billion budget deficit in 2009 — $300 million more than it had projected in July — that will very likely require new fare and toll increases or service reductions unless it gets new state and city aid or finds new sources of revenue, officials warned on Monday morning.

At a meeting of the finance committee of the authority’s board, the authority’s chief executive, Elliot G. Sander, said the authority faces a dire fiscal situation that could influence riders across the subway, bus and commuter-rail networks. The deficit was caused, he said, by the collapse of revenues from real estate and corporate taxes, which until just a few years ago had given the authority a string of healthy surpluses…

The magnitude of the fiscal challenges confronting the authority was evident in a PowerPoint presentation presented at the meeting and posted to the authority’s Web site. Real estate transaction taxes, which represent an important share of M.T.A. revenue, provided the authority with more than $1.4 billion in 2006 and nearly $1.6 billion in 2007. This year, the authority is on track to collect only $995 million in such taxes — about $50 million less than had been projected in July. And the situation is expected to get even worse. The authority now expects to collect $895 million in real estate taxes next year, and $877 million in 2010.

The PowerPoint presentation is available here, and in the next day or two, an archived video of the committee meeting will be posted on the MTA’s website.

“They will be very, very significant,” Sander said during the hearing. “Whatever that mix that we come up with, in terms of fare and toll increases and service reductions, there’s no question that they would have an impact, significantly, on our customer and on the functioning of that region.”

Right now, the financing mechanism for the MTA is clearly broken, and it’s up to the government to fix it. While the feds are working on a $700 billion bailout plan for the rest of the U.S. economic, it wouldn’t be out of the realm of the ordinary to suggest that less than 0.2 percent of that money be siphoned to ensure a healthy MTA. The New York Metropolitan Area’s transit infrastructure is probably at least that valuable to the national economy on the whole.

Meanwhile, the Ravitch Commission’s recommendations — discussed at length this morning — loom larger now. Somehow, someone will have to pay to fix the MTA. It will come out of taxpayers’ pockets either at the expense of everyone or at the expense of drivers who opt to enjoy the luxury of driving. In all likelihood, the end result will be some combination of both.

But no matter the solution, the government cannot allow the fortunes of the MTA to raise and fall on something as unstable as real estate tax revenues. It’s hard to underestimate the city’s need for a healthy public transit network. I’d hate to see New York learn the hard way a lesson we all should have picked up from the 1970s.

Categories : MTA Economics
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This morning, at 9:30 a.m., the MTA’s Finance Committee will meet in a special session to update the MTA Board on revenue and expense projections for the agency’s operating budget. While the news out of this meeting will not be good for the MTA’s bottom line, help, in the form of the Ravitch Commission is less than a month away.

In a few short weeks, Richard Ravitch will unveil his recommendations the city and state could adopt to save the MTA. Yesterday, the Post broke the unsurprising story that Ravitch is going to strongly urge the city to toll the East River bridges with the proceeds heading into the MTA’s depleted coffers. David Seifman and Bill Sanderson broke the story:

A state commission is proposing slapping tolls on the Brooklyn, Manhattan, Williamsburg and 59th Street bridges to plug a gigantic, $1.5 billion hole in the MTA’s budget, sources told The Post. In a report expected on Gov. Paterson’s desk next month, members of the Ravitch Commission – a 13-member panel appointed in June to identify solutions to the agency’s financial crisis – will recommend collecting tolls at all or some of the city’s East River bridges.

All of those bridges are owned by the city and currently have no tolls. But motorists now pay $5 each way on the MTA-owned East River crossings, which include the Triborough Bridge and the Brooklyn-Battery and Queens-Midtown tunnels.

Higher subway, bus and train fares and a new payroll tax – to be imposed on employers – will also be suggested by the commission, which is led by former MTA chief Richard Ravitch, the sources said. Because the non-toll spans are owned by the city, and the Metropolitan Transportation Authority is a state agency, both City Hall and Albany would have to OK the controversial idea.

The Daily News reported that congestion pricing would also be included in the Ravitch report.

On the surface, supporters of mass transit are going to find it tough to object to this idea. The City has often floated the idea of tolling the East River crossings as a way to generate more revenue for the MTA, and if indeed this suggestion appears in the Ravitch report, it will be hard for Albany and City Hall to ignore it. As with congestion pricing, it would serve two needs: The plan would both generate more revenue for the MTA and encourage commuters to seek out more environmentally friendly means of travel within New York City.

Of course, the Post went straight to New Yorkers who could find some way to complain about this plan. Business owners who rely on inter-borough travel decry it as another form of taxation with some even claiming that they won’t be able to stay in business if they’re charged $400 more a month in tolls. These drivers should be able to pass off the costs to their customers in the form of higher delivery fees. That’s not the issue.

The real issue I have is with people such as Walter Winds, mentioned in this graphic, who drives his wife to work over the Williamsburg Bridge. I can’t side with him in this great debate because subway trains already cross the Williamsburg Bridge. If Winds and fellow commuters who view cars as a luxury don’t want to pay, then they can take the train.

Meanwhile, John Liu, the chair of the City Council’s Transportation Committee and the man supposedly in charge of advocating for mass transit, is already campaigning against the tolls. “The mayor tried to impose them during the dire fiscal straits in the wake of the 9/11 attacks, and even then it went over like a lead balloon,” Liu said to The Post This plan, he said, will wind up on “the bottom of the East River.”

Thanks, John. Way to take a good idea and toss it under the bus for a change. One day, the head of the Transportation Committee won’t hate the idea of funding transportation in the city. For now, we’ll just have to hope that something Ravitch suggests — tolls, congestion pricing, money laundering — provides the MTA with the relief it needs.

Categories : MTA Economics
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This is a tale that began back in August of 2007 when a torrential rainstorm flooded the subway and left the city paralyzed. The MTA couldn’t communicate in real time to its passengers to alert them of the service outages, and millions of New Yorkers were left stranded.

A week after the flood, the MTA expressed interest in a text-message service advisory plan. Since then, we’ve heard bits and pieces about the plan. Exactly one year ago today, the MTA issued a Request for Proposals for a text-message alert system. In March, the MTA announced that these alerts would be “coming soon,” and in July, the agency said basically the same thing.

Now, according to the Queens Courier, the MTA may be set to launch this program by the end of the month. I’ll try to find out more about the shape of this project and any anticipated launch dates over the next week. It is a long time coming and will be a welcome development.

Without further ado, this weekend’s changes:

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, there are no 1 trains between 34th Street and South Ferry due to signal and station work required to open the new South Ferry terminal. Customers should take the 2 between 34th Street and Chambers Street. Free shuttle buses run between Chambers Street and South Ferry.

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, downtown 2 trains run local from 96th to Chambers Sts. Uptown 2 trains run local from Chambers Street to 72nd Street. These changes are due to signal and station work required to open the new South Ferry terminal.

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, uptown 2 trains skip 79th and 86th Sts. due to several jobs, including track chip-out north of 135th Street, and communication and cable installations. Customers should take the 1 instead.

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, there are no 2 trains between 96th Street and 241st Street due to several jobs, including track chip-out north of 135th Street, and communication and cable installations. Free shuttle buses replace the 2 between 96th Street and 149th Street-Grand Concourse. 5 trains replace the 2 between 149th Street-Grand Concourse and 241st Street.

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, there are no 3 trains running due to a track chip-out north of 135th Street station. Free shuttle buses and 24 trains provide alternate service.

From 9 a.m. to 4p.m. Saturday, November 8, Manhattan-bound 4 trains skip Bedford Park Blvd. due to rail replacement.

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, Queens-bound AC trains skip Ralph and Rockaway Avenues due to station painting.

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, downtown AC trains skip 163rd, 155th, and 135th Streets due to station painting.

From 11:30 p.m. Friday, November 7 to 5 a.m. Monday, November 10, free shuttle buses and shuttle train service replace the A between Howard Beach-JFK Airport and the Rockaways due to work on the Cross Bay Veteran’s Memorial Bridge.

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, uptown C trains run express from Canal to 145th Streets.

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, uptown D trains run on the C line from West 4th Street to 135th Street, making local stops, due to ADA work at 47th/50th Sts.-Rockefeller Center station.

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, uptown E trains skip Spring and 23rd Streets due to ADA work at 47th/50th Sts. station.

From 8:30 p.m. Friday, November 7 to 5 a.m. Monday, November 10, there are no G trains between Forest Hills-71st Avenue and Long Island City-Court Square due to tunnel security work on the crosstown tunnel. Customers should take the E or R instead.

From 1 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, J trains run in two sections due to structural work at Canal Street:

  • Between Jamaica Center and Essex Street and
  • Between Essex Street and Chambers Street

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, there are no N trains between Queensboro Plaza and Times Square due to track replacement in the area of 5th Avenue/59th Street, switch work at Queensboro Plaza and tunnel security work.

  • For Lexington Avenue and 5th Avenue, take the 7 to Grand Central and transfer to the uptown 456 to 59th Street
  • For 49th Street and 57th Street, take the 7 to Times Square and transfer to the uptown Q

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, N trains skip Prince, 8th, 23rd, and 28th Streets. (Same work as above.) Customers should take the Q instead.

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, N trains are rerouted over the Manhattan Bridge between DeKalb Avenue and Canal Street. (Same work as above.)

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, Q trains replace the R between 57th Street-7th Avenue and DeKalb Avenue. (Same work as above.)

From 12:01 a.m. Saturday, November 8 to 5 a.m. Monday, November 10, R trains run on the V line from Queens Plaza to Broadway-Lafayette Street, then via the Manhattan Bridge to DeKalb Avenue. (Same work as above.)

Categories : Service Advisories
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  • City to spend $4M to rename a bridge · This morning, I spied a SubTalk poster urging me to “Celebrate the dedication of the Robert F. Kennedy Bridge.” It took me a good two minutes to figure out that the MTA was referring to the erstwhile Triborough Bridge. Now, according to CityRoom, the City of New York is set to spend $4 million over the next two years as they go about renaming the bridge after the former New York Senator and Massachusetts native. The funny thing about this expensive renaming outlay is that no one in New York is going to call this bridge by its proper name. It will always, to natives of this city, be the Triborough Bridge. (And anyway, it should have been named after Robert Moses. It was his bridge through and through.) · (11)

Over at The Launch Box, another subway blogger also named Ben charts the progress of the Second Ave. Subway launch box construction in pictures. In his latest post, Ben links to a CB 8 Second Ave. Subway task force presentation from the MTA. The slides, available here as a PDF, cover the architectural finish and design elements of Phase I of the SAS.

It’s hard not to get excited about this. These images show that the MTA is pretty far along in the planning and design stages of Phase I of this project. Might we actually have a Second Ave. Subway in the next eight to ten years? Without further ado, let’s jump in. All images can be enlarged by clicking.


We start with architectural renderings of the mezzanine at 96th St. The station promises to be light and airy with substantial access points to the platforms and escalators all around. Signs are well marked and easy to read. I believe, though, that by the time this station opens, all available wallspace will be covered in ads. The stations will also be way more crowded than this.


Moving above ground, we see something new from the MTA: open-plaza canopied stations with escalator access. These canopies are very reminiscent of the WMATA’s awnings that popped up in 2005-2006 after years of suffering escalator abuse at the hands of the elements. These SAS entrances are rather ostentatious considering the existing subtle subway entrances throughout the rest of the city.


Above is the street-level view of the 94th St. entrances. According to the presentation, these entrances will feature curved edges and railings to facilitate pedestrian flow. They’ll be hard to miss and with adequate signage as well. Fancy shmancy.


The entrances incorporated into preexisting buildings will be a bit more subtle. The one above is from the building currently at the northeast corner of 69th St. and 2nd. With entrances on both 69th St. and 2nd Ave., straphangers will have plenty of access points at just one of the station’s money entrances. As the PDF shows, each station will have an uptown and downtown entrance. (The 83rd St. entrance of the 86th St. stop has a mid-block access point.)


Unfortunately, as astute Upper East Siders might have realized, that entrance at 69th St. and 2nd Ave. means the end of Patsy’s Pizzeria. The Yelp reviews are decidedly mixed.


For the architects among us, the presentation also gets into details about the ancillary buildings the MTA is constructing at SW corner of 97th St., the NE corner of 93rd St., the NW corner of 86th St. and the NW corner of 83rd St. (with more to come). They’re kind of ugly, but the MTA has designed them to fit in as best as they can with the surrounding neighborhood. These buildings as, for better or worse, a necessary evil of the subway line.

So there you go. You can check out a street overview of the buildings and entrances the MTA plans on constructing. Who knows? Maybe by 2015, we’ll have that Second Ave. Subway after all.

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On Monday morning, when I ran a piece on the MTA’s global investments, I leveled some fairly serious charges at MTA CFO Gary Dellaverson and his investment strategy. Relying on information from an article in The Times, I questioned the MTA’s decision to pursue some high risk, high reward investments and in doing so, overstepped my bounds without discovering the full story.

I wrote, as my analysis:

Basically, in a nutshell, the MTA got greedy…All of this economics mumbo-jumbo leads me to believe that perhaps the MTA needs some new fiscal leadership. Perhaps Dellaverson, the man who invested the MTA into this mess, needs to go. Perhaps he just needs new economic advisers who don’t play fast and loose with rather important public infrastructure funds.

Yesterday, the MTA rightly accused me of spouting forth on a topic about which, at the time, I knew little. Jeremy Soffin, MTA spokesman, wrote me a correction in the form of a letter submitted to — but not yet published by The Times. It reads:

To the Editor:

While it is important to your readers to know how the global credit crisis is impacting government services, the November 2 article “From Midwest to M.T.A., Pain From Global Gamble” confuses the issue by comparing the MTA’s successful use of variable rate bonds to riskier investment schemes.

The story implies that the M.T.A. was “wooed by bankers” to pursue variable rate bonds, but the agency has used these bonds to diversify its traditional fixed-rate debt since the 1980s. This mix provides the most cost effective financing for the MTA’s capital program of over $23 billion, with variable rate bonds saving the agency nearly $44 million just this year alone.

The M.T.A. did what was prudent for any governmental issuer of its size – it compiled a list of qualified banks, selected not on the quality of the sales pitch, but on market acceptance and ratings of the institution. The M.T.A. currently uses fourteen major domestic and international banks in its variable rate portfolio, of which Depfa is but one.

As the MTA continues to grapple with the volatility in the financial sector as well as the impact of the economic slowdown on the ‘real’ economy, it will keep its riders interests first and foremost by managing risk with supplier and product diversification.

In my post, I didn’t take the full economic picture into account. What the MTA did in investing in variable rate bonds was what millions of Americans do with their 401(k) plans. They diversified their holdings to spread out the risk in an effort that should have achieved maximum growth. If this one investment didn’t work — and that is a point I’ll get to soon — it has nothing to do with irresponsible investing or greedy officials and everything to do with the fact that, sometimes, investments don’t work out.

But on the other hand, while The Times article didn’t focus on this, as the MTA stresses, these investments works. The variable rate bonds saved the agency $44 million alone.

The other piece of this post and The Times article focused on concerns about the MTA’s debt payments, but these payments aren’t increasing because Depfa — the bank holding just one of the MTA’s many investments — is suffering. The debt is increasing because the MTA has had to borrow to finance its much-needed capital campaign.

While the article mentions a potential $12 million in fees to Depfa, the MTA believes this figure represents a worst-case scenario, and authority officials do not believe it will come to that. The MTA’s financial team is much more concerned with higher interest rates on their recent bond issue and the current disruption in the credit market than with what figures to be a relatively small payout to Depfa, if it even comes to that.

So in the end, I have to issue an apology to the MTA and Gary Dellaverson. I took the information from The Times’ article at face value when the MTA had a story to tell about their investments too that doesn’t make the authority look nearly as bad as I made it out to be. In reality, Dellaverson has done an admirable job spreading the risk at a time when the MTA really needs an outside infusion of cash. Monday’s post represented sloppy reporting by me, and my readers and the agency about which I write deserve better.

Categories : MTA Economics
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  • The election returns and transit · Mobilizing the Region takes a look at what last night’s local and national election returns mean for transit investment in the Tri-State area. With Democrats in power just about everywhere, the Tri-State Transportation Campaign sees good things ahead for transit in New York. · (0)

I first started this blog nearly two years ago when Democrats, thanks in large part to the efforts of New York’s own Chuck Schumer, won the midterm elections. At the time, it seemed as though the party would deliver an urban-oriented policy with urban investments.

Two years later, my intuitions were correct. The MTA has seen an influx of investment in capital expansion projects from both the federal government and the city. While the federal money will spur on at least the first part of the Second Ave. subway and the city will pay for the 7 line extension to the Hudson Yards, a slow economy has derailed more investment in transit. It was, in 2006, a bittersweet victory then. The promise for support was there; the economic conditions failed to materialize.

Tonight, as we all witnessed a historic investment, those of us trumpeting urban policies, those of us urging for substantial investment in public transit and national infrastructure have a reason to smile. Barack Obama, a very urban-oriented candidate, won because urban voters turned out to support him. His vice president, Joe Biden, is one of the nation’s greatest proponents of its sagging rail system. This could truly be a watershed election for supporters of public transportation and rational infrastructure investment.

Of course, it is right now too early to tell what the future will hold. Our President-elect does not have an easy road ahead of him. America is still embroiled in two overseas wars; the economy is stagnating; the environment isn’t going to fix itself. But as more and more economists have recommended over the last few days, the next president should look to begin an economic recovery program by investing in cities and by investing in infrastructure.

For New York, arguably the center of America’s economy, this means an increased attention to the state of our transit network. This means better and faster transit into and out of the central business district of Manhattan. This could mean more money for the subways, more money for our aging and inadequate river crossings, more money for the commuter rail options and airports that feed our city.

It’s been a rough few months for the MTA. The organization is teetering on the brink of financial collapse. It needs millions of even billions more than it has access to, and it’s about to ram us all with a second fare hike in two years. But tonight, there is a glimmer of hope on the horizon. Perhaps, just perhaps, federal investment in our infrastructure will be that bright light at the end of the proverbial tunnel.

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Nearly a year ago, news came out that the MTA and its technology firms were at odds over a few key technology projects. The contractors could not figure out how to implement a GPS-based bus location system in New York and was, at the time, 16 months behind schedule.

Now, according to Pete Donohue, the GPS projects appears to be dying a slow, slow death. The Daily News transit scribe writes:

NYC Transit may pull the plug on a troubled $99 million project to track buses and post “real” arrival times on bus-stop message boards, the Daily News has learned. Officials have halted some work “pending a decision on the future of the project,” according to a report by the agency’s outside engineering consultant.

NYC Transit lawyers also are reviewing legal options, according to the report, which says the contractor is two years behind schedule and still having technical problems with the GPS tracking system. “It’s a dirty, rotten shame,” Gene Russianoff of the Straphangers Campaign said. “A bus locator system could greatly improve bus service with better dispatching and more real-time information. If your car’s GPS can guide you around town, I don’t see why buses can’t do the same.”

The report by the Carter-Burgess engineering firm refers to problems in general terms, citing software issues, a high failure rate of onboard equipment and inaccurate arrival times relayed to message boards placed on just a handful of routes in Manhattan so far.

The MTA has recently turned off a test-run of the program, but the contractors are still claiming that they are within the contractual requirements.

No matter how this ends up, one thing is certain: As the MTA moves forward with technological investments, the agency and its contractors have to be on the same page. Other transit systems in cities with tall buildings have GPS-based bus systems; other subway systems older than ours have train arrival boards. It’s time for New York to get these features, but these technology projects seem to be stalled out.

Categories : MTA Technology
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For the Metropolitan Transportation Authority, the sale of the Hudson Yards space basically represents free money. All they have to do is sign the contract for the rights to develop the 26 acres on the far West Side above the train tracks, and $1 billion will be theirs.

But for months, the MTA has sat on this deal they have worked out with Related, and now the transit agency is blaming no one but themselves. Via Eliot Brown at The New York Observer’s The Real Estate blog comes the odd news:

The deal to put $15 billion in residential and commercial development atop the M.T.A.’s West Side rail yards has hit a delay, as the agency will not sign a contract with developer Related Companies this week, as was originally scheduled. The state authority says it has reached an agreement with Related (which is in a joint venture with Goldman Sachs) to push back the deadline for signing a contract for the property by another 90 days, as the M.T.A. has been slower than expected in producing the needed paperwork.

“We have together agreed on an extension of the designation period,” said Gary Dellaverson, the CFO of the M.T.A. (who has to have one of the least enviable jobs in government these days). “Our expectation was that the documents would have been turned a month and a half ago.

“This is my fault—the fault of the M.T.A.,” he said. “This is not a product of either Related or Goldman or their lawyers.”

For his part, Dellaverson doesn’t believe the economic slowdown will force Related’s hand. “I don’t have any indication, and they haven’t brought anything to me that would indicate slowness or desire to delay on their part,” he said to Brown. “Everything that I’ve seen, is they’re continuing to operate in good faith and pursuant to a desire to consummate the transaction.”

Now, this confidence is all well and good, but this news — coupled with yesterday’s examination into Dellaverson’s risky investment strategy — makes for a rough week for the MTA’s CFO.

It’s not a good time to be in charge of money, but so far this week, as the MTA heads into an emergency budget meeting next week, we’ve learned that Dellaverson OK’d some risky investment strategies and hasn’t yet seen fit to push forward on a $1 billion windfall deal for the MTA. What other motivation could the MTA’s money man need?

Categories : Hudson Yards
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