The MTA needs its contractors, and the contractors need the MTA. The authority, with its multi-billion-dollar capital plan, is one of the main drivers of the construction industry in New York City and the surrounding region. Without that investment and the drive to expand, workers would see jobs dry up, and contractors would see the flow of funds evaporate. Yet, all is not perfect between these two major players.
Yesterday’s amNew York featured an extensive interview with Denise Richardson, the managing director of the General Contractors Association of New York. Richardson is a former procurement officer for Transit’s capital program and has spent her career in various governmental and agency positions. In light of the current price tags attached to various MTA capital projects, Richardson’s words are quite informative and well worth our attention.
Richardson begins the Q-and-A throwing her voice behind the MTA. When asked what she wants to see changed, she argues for more comprehensive investment in and more attention paid to the MTA. “Everyone complains when there is a problem on their line,” she said, “but the MTA moves 8.5 million people every day and gets almost everyone to their destinations safely and on time. There was almost no capital investment in the system at all from the 1950s to the 1980s. They’ve spend $76 billion since 1982 trying to bring it back to a system of good repair, but some of these projects – like refurbishing the signal system to provide increasing capacity – are very messy and they still haven’t caught up.”
Of course, the GCA is a unique position to lobby for the MTA, and generally, they do so. They were an important voice during the lead-up to the funding of the capital plan, and they have argued for MTA dollars time and again in the past. They support congestion pricing, as Richardson explains in the interview, and they have some weight in Albany as well.
Yet, as the contractors have a symbiotic relationship with the MTA, they also have a slight parasitic one as well. Archaic work rules has led to overstaffing that significantly increases costs. While MTA Capital Construction President Michael Horodniceanu once made an off-hand reference to me on overstaffing, few MTA officials are willing to speak at length about this problem, and Richardson didn’t say too much either. “As a practical matter, the only way we can build large, transformational projects like the World Trade Center or the Hudson Yards is with the skilled, unionized construction workforce,” she said. “[Unions] have had issues adapting to new construction techniques and new construction methods, but they’ve worked hard to address them, so it’s a positive future.”
Ultimately, Richardson’s dream lines up with the impetus behind this blog. As she says, she wants to see “a full-length, Second Avenue subway.” She explained, “The plan is for it to run from Upper Manhattan all the way downtown. I would like to see the funding to continue the project.”
The current leadership at the MTA has yet to come out with plans for Phase 2 north to 125th St., let alone ay sections south of 63rd St. The engineering studies have long been completed, but the dollars aren’t there. A first step in the right direction would involve a concerted effort between the GCA and the MTA to identify ways in which costs can be lowered. Can the MTA and its contractors reduce staffing levels on these projects? Why does everything goes significantly more in New York than in other cities around the globe? These aren’t easy questions, but they need to be answered.
The General Contractors Association could be the MTA’s best friend. They both need each other to move forward, but at some point, moving forward will require compromise and sacrifice. It’s not an easy path.
12 comments
The best time to push for Phase II of the SAS will be immediately after Phase 1 opens, and people can actually see the effect it has on moving riders over from the Lex to the new line. That would be the best spot to seek the additional funding, especially when it’s pointed out that half the tunneling for Phase II is already completed and has been sitting idle for almost 40 years.
The problem looming will be if there are any more delays/cost increases on Phase I or (more likely) East Side Access, to the point that new MTA capital construction gets the same reputation as the Big Dig did up in Boston over a decade ago, of being a hopeless money pit of misused funds and shoddy workmanship. And if that’s the image the public in the metro area gets and politicians in Washington see, both the MTA and the GCA are going to find future funding for projects a lot harder to come by.
I try no to complain about public transportation. There have been 2 times I complained and that was because of the deplorable condition of the Wakefield station on the Metro North Harlem line (since nicely renovated) and the condition of the 149th St. and Grand Concourse subway system. As to the reason why things are so much more expensive in NYC than other places… mainly real estate supply and demand (and along with that you have to have high wages). Moscow may have more billionaires – but there is more of a worldwide demand for NYC. Building a 2nd Ave. subway is not like building a rail line in the countryside (remember all the El’s in Manhattan were dismantled because of increase in real estate value). Whenever you are dealing with valuable you always will have more concessions and reviews etc. to deal with. Not to mention – running a subway and bus system 24 hours a day is also by nature more expensive… but that’s what makes it “the city that never sleeps”. The reality is the system would be less expensive and more efficient if it didn’t run 24 hours… but what New Yorker (and even some tourists) really wants to sacrifice that????
That said – I’m not confident of seeing it any time soon. It should have been done when it first started – and it’s amazing even this little piece is being completed. The George Washington Bridge was supposed to have rail initially as well (and we see that it got more car lanes). That’s why I think it is EXTREMELY short sighted not to include rail and BRT on the Tappan Zee – I 287 corridor between Orange/Rockland and Westchester/ Fairfield, CT. That would certainly cut down (of course not eliminate) the car congestion from ppl going from Orange/Rockland (and maybe Ulster) by making it an easier commute to get to the job centers in Manhattan/White Plains/Stamford. People will continue moving into the further counties – again – because of real estate prices(I have friends who commute from Dutchess – but it’s a straight shot on the Harlem or Hudson lines) so there needs to be efficient transport to keep as many cars off the road as possible.
The 1960’s to the early 1990’s saw a lot of capital flee the city for the suburbs (and even in the suburbs public transport was cut back because having a car became a status symbol). The MTA (and PA) have to play “catch up” on a 30 year neglected system. It’s not easy or cheap. That’s why all waste must be wrung out of the system. I’m actually empathetic to the leaders. It’s like a manager trying to run a division of a company that was starved of resources and talent for 30 years. Not an easy job – especially when your workers still got perks for low productivity.
“There was almost no capital investment in the system at all from the 1950s to the 1980s.”
Not so. There was extensive investment from the 1950s through the early 1970s, almost all of it reinvestment in the existing system. It was built from 1904 to the early 1950s, and then the rebuilding started and is still ongoing. It took just one decade of disinvestment in the 1970s to wreck the system.
Once again Richardson danced around the problem. The contractors are part of multi-employer pension plans, and cut their contributions to those plans and handed out retroactive pension enhancements in union deals during the stock market and housing bubbles. As a result, as with the public employee plans, the pensions are drastically underfunded and costs have soared.
The private sector has responded by going non-union. They are looking for someone pay for the sweet deals both the contractors and the unions got in the past, because otherwise the contractors will go bankrupt and the pensions will end up with the PBGC. If the pensions end up with the PBGC, they payouts will be capped, hitting the richest workers, and they’ll be no retirment until age 65.
That is what they want the MTA to pay for. Not real investment. And no one will talk about it. No one.
As luck would have it, there is a WSJ article on the status of multi-employer pension plans today. Most of those cover workers in fields such as construction and transportation. Read around the ideology and look at the facts.
http://online.wsj.com/article/.....53800.html
“Unions and Democrats love multi-employer plans because they let workers keep their retirement benefits even if they switch jobs to another participating company. That means lifelong union membership and dues. It also means the retirees of a company that fails can be rescued by other companies that pay into the pool.”
Sounds like a good idea to me. But what if you have a tragedy of the commons, with everyone upping benefits and making inadequate contributions and hoping someone else will get left with the bill? This is, after all, the era of Generation Greed.
“The truth is that CEOs and union chiefs have jointly ignored the problem for years, choosing to put more money into current wages and benefits rather than fund pensions. Dumping these pensions onto the Pension Benefit Guaranty fund will further hurt retirees, since that agency has a maximum payout of $12,800 a year—a fraction of existing pension promises.”
Now they want a government bailout. The Feds won’t do it? How about having New York’s MTA pay for the unions and contractors of the whole country by paying more for construction?
“Labor’s actuarial reading of one SEIU fund for health-care employees finds it 100.4% funded. Credit Suisse’s fair-value reading finds it 49.6% funded—or some $6.8 billion in the hole.”
They’ve been going for state bailouts via sky high Medicaid spending.
The bottom line: you can’t have one year in retirement for each year worked without getting it at someone else’s expense. And even more fair pensions have to be paid for, despite the occasional stock market bubble and bust.
How does this tie in with the TWU’s proposal to loot its own members’ pension fund?
There was serious underinvestment in the 1960’s too.
I dunno. Look at all the rail cars bought during that decade. All the later “Redbirds” for the IRT. The 600-plus R32s and the R40s, the first cars with air conditioning.
The “New Look” buses came out in 1959. Eventually that was the whole fleet.
Lots of signal projects got done, at the once every 60 year pace.
I don’t have any data on stations. Perhaps there wasn’t much work done on them.
They bought new equipment, retired the old equipment then neglected the new equipment. Much of the capital funding during the 60’s was shunted from the bonds issued for the 2nd Ave subway. It goes to show how we underfund mass transit. We issue debt, and then reroute debt for something we should have paid for to maintain existing systems.
Between the MTA and its contractors, a symbiotic relationship)
Are you sure that is an accurate title? Although to be fare, you did say it was parasitic near the bottom of the post.
Ben, your post shows very clearly what’s wrong with things: there’s a revolving door between managing projects for the MTA and working for the contractors who then bid on them. If you know that in 5 years you could make much more money working for the people bidding on projects, what incentive do you have to demand more accountability and lower costs? You’re just damaging your future sinecures.
(Also, I love how Richardson brings up WTC. Fear Tower costs more than twice as much as the BOA Tower per unit of floor area.)
I would like to see one MTA project come in under budget and quicker than planned
There’s no way that these contractors could ever accomplish that
The complete reconstruction of the 1/9 from Chambers Street to South Ferry, in less than one year after 9/11.
Yes they can accomplish that. They just don’t.