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7 Line Extension

The parable of the 7 line extension

by Benjamin Kabak
written by Benjamin Kabak on December 22, 2009

The 7 Line extension — that glorious city-funded boondoggle of a subway extension — reached a milestone this past week. After a few months of drilling, the second of the project’s two tunnel boring machines broke through the southern wall of the 34th St. station cavern. The two TBMs have finished digging out a combined 2900 feet of track from 26th St. on north that will be used for storage, and Phase I is now complete. The project remains on target for its December 2013 opening.

“It’s been a half century since City government expanded its subway system, but that drought will soon be at an end,” Mayor Michael Bloomberg said. “Too often, government falls victim to the temptation to abandon long-term infrastructure projects amidst short-term downturns, and that’s why big things never get done. The redevelopment of the Hudson Yards has been talked about for decades, but with the expansion of the number 7 line, its potential will finally be realized.”

“This week’s milestone is a clear indicator that the MTA is delivering on a major expansion project that will increase capacity within our transit system and generate economic growth in a vastly underserved area,” MTA Chairman and CEO Jay H. Walder said. “Much like our joint efforts to improve bus service throughout the city, this partnership between the city and MTA will benefit New Yorkers for generations to come.”

The press-release back-slapping by the MTA heads and various city leaders continued as you would expect. For those so inspired, read it here. Manhattan Borough President Scott Stringer, City Council Speaker Christine Quinn and House Rep. Jerrold Nadler all added their praise for the project. The 800-pound gorilla in the room, though, was completely ignored.

“Today’s announcement of the completion of the first phase of the Number 7 Line extension is a major milestone in the expansion of New York’s aged infrastructure,” Nadler said. “For too long we have not made the necessary investments to update our transportation network. This project, which will open the economic potential of the Far West Side, is one of many such projects we need to do to prepare New York for continued growth. I look forward to the successful completion of this project and future investments in our infrastructure.”

Left unsaid were qualms about present investment levels in our infrastructure. In a way, the 7 line extension and this moment in the sun for the project represent the perfect complement to the wall-to-wall coverage of of the MTA’s budget crisis. Here is a project in which the city has given $2.1 billion to transit, and yet it is one of the most flawed expansion projects under construction. Despite the Council’s approving a rezoning measure for the Far West Side yesterday, there has been no progress on the Hudson Yards development.

Meanwhile, the City was hesitant to cover cost overruns on the project and shelved even just a $500 million shell for a badly-needed station at 41st and 10th Ave. Why? Because real estate developers looking for handouts and bonuses to increase their land value wouldn’t have benefited nearly as much as Related, the company in charge of constructing something at Hudson Yards, will when the 7 line opens ahead of their development.

Call me a cynic, but there’s something wrong about the city’s funding priorities when it comes to mass transit. Bloomberg is happy to pay for an extension that will benefit his real estate friends, but when it comes to contributing to operating expenses and ensuring that the economic driver of the city can continue to offer adequate service levels, he and his third-term administration are nowhere to be found.

One day, the 7 line extension to nowhere will open, and one day, it might actually be an extension to somewhere. For now, though, the TBMs trundle forward with 42nd St. in their sights. Hopefully, the MTA will be able to pay for the extra operating costs this new line will incur when it opens in four years. Don’t expect the city to help out.

After the jump, some TBM pictures. Click to enlarge. The video above is courtesy of Mayor Bloomberg’s YouTube channel.

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AsidesMTA Economics

Using stimulus funds but from another source

by Benjamin Kabak
written by Benjamin Kabak on December 21, 2009

Last week, I explained why I was not in favor of Gene Russianoff’s plan to use stimulus funds to cover the MTA operating gap. It’s not sound policy to move money from capital projects to operating deficits, and to do so would risk future MTA financial problems without solving the current one on hand. Today, Cap’n Transit comes out in favor of using stimulus funds but with a twist. He wants the unused Department of Transportation stimulus funds — those not being used to widen the Major Deegan or those earmarked twice for Brooklyn Bridge repairs — to fund the MTA’s operating gap. It is, of course, far better to use someone else’s capital funds to cover the MTA’s operating gap than it is to use the MTA’s capital funds to do the same thing. Sign me up.

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MTA Economics

Getting worse before it gets better

by Benjamin Kabak
written by Benjamin Kabak on December 21, 2009

One the major causes of the MTA’s current fiscal short fall is a $143 million reduction in previously-approved state appropriations. Now, the state’s fiscal picture is growing darker by the day, and as the MTA prepares to close a budget gap of nearly $400 million, recent developments are leaving me wondering if they should look for even more ways to save.

In a rather gloomy story over the weekend, the Daily News reported that things will very likely get worse before they get any better. Wrote Kate Lucadamo and Pete Donohue:

The MTA’s budget crisis could worsen, a financial rating company said Friday – just days after the authority announced plans to slash services and charge students to ride buses and subways. A Moody’s Investment Services report raises concerns that the state again will cut funding to the Metropolitan Transportation Authority.

A deepening or longer recession also could drive down ridership and revenues from taxes that are supposed to help pay for the subway, bus and commuter train system, according to the report…Gov. Paterson and the state Legislature cut nearly $3 billion in state spending early this month, including money for student MetroCards. Mayor Bloomberg warned yesterday things will get worse.

“People are screaming about what they do now; wait until they see what happens in March,” Bloomberg told WOR’s John Gambling during his weekly radio show.

In March, the state may very well be faced with a budget gap of $9 billion. That could spell the end of any major state subsidies for the MTA.

Of course, cutting off the MTA is a major mistake. Whether or not Albany realizes it, New York City’s mass transit system drives the state’s entire economy. Our politicians though are far more willing to play with fire than they should be. If we’ve learned one thing over the last year, it is exactly that.

In the end, the MTA should begin to evaluate its options now. It can cut services only so much before the fares have to start inching up. As I’ve said in the past, I’d rather see service levels remain as they are now with fares going up. It’s more important to have adequate service and slightly higher fares than it is to have sub-par service and fares artificially deflated. Still, congestion pricing and East River Bridge tolls are going to have to be considered as solutions, and as the economy stumbles in New York state, we can only hope the MTA can survive relatively intact

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MTA EconomicsService Cuts

How Atlantic Yards impacts the MTA’s bottom line

by Benjamin Kabak
written by Benjamin Kabak on December 21, 2009

Late last week, amidst all of the talk about the MTA’s budget crisis, State Sen. Pedro Espada nearly made a good point. In a letter to MTA CEO and Chairman Jay Walder, Espada urged the authority head to examine the state of the MTA’s real estate holdings. His point though was a bad one.

“MTA budget gap needs must be measured against real numbers, and the MTA must prioritize fiscally prudent lease and sale of assets before deciding to leave children, seniors and hard-working citizens stranded without a safe, reliable and affordable means to get to and from work, school, grocery shopping and doctor’s appointments,” Espada wrote. “I would like to hear from you as soon as possible regarding the MTA’s real property holdings as a solution to the Authority’s serious budget concerns.”

Now, it doesn’t take an economic genius to understand the folly of Espada’s remarks. First, he is urging the MTA to sell its real estate holdings during one of the greatest periods of market depression in U.S. history. Second, MTA real estate sales are simply another one-off quick fix and provide no long-term secure solution to the agency’s financial problems. To sell now, in other words, would be folly.

Unfortunately, for transit advocates, Espada missed an opportunity to make a point. He could have used the MTA’s summertime decision to accept just $20 million up front from Bruce Ratner for the Vanderbilt Yards land rights to question whether the MTA is fiscally smart enough to take advantage of its real estate holdings. Originally, in 2005, the MTA extracted a promise for $100 million from Ratner, and even then, the price was a below-market rate. Today, the deal looks even worse.

Last week, Atlantic Yards opponents lost a legal challenge to the renegotiated terms of the Atlantic Yards deal. A state judge upheld the lower upfront payment in light of the fact that all new deals must be subjected to an open bidding process. This, he said, was simply a renegotiation of a payment plan. “If every change were to be viewed as a new plan so as to trigger anew each mandated review process, no development plan could ever reach final approval — let alone ultimate completion. The MTA had a rational basis for continuing to use the 2005 appraisal rather than ordering a new one in 2009,” the judge wrote.

There may indeed be a solid legal argument the MTA can make here, but it is one to which I find myself very unsympathetic. At a time when the agency must maximize its revenue potential, the authority — and the state along with it — is simply handing over free money to Bruce Ratner while the rest of us face the specter of service cuts. A full market rate payment for the Vanderbilt Yards land wouldn’t close the 2010 gap by itself, and since the MTA can sell that land only once, it wouldn’t help the future. But a better deal would benefit both the authority and its riders.

As the Ratner deal becomes one step closer to reality, Pedro Espada’s words are the last ones we should be following. If this is the best the MTA can do with its real estate holdings, the authority is far better off not selling during a depressed market or perhaps not even selling at all.

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Service Advisories

Snow cancels weekend work, Nostalgia Train

by Benjamin Kabak
written by Benjamin Kabak on December 18, 2009

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New York City Transit’s winter weather fleet is ready for service. (Photo via NYCTSubwayScoop)

If the folks reading us the weather are to be believed, we have one giant winter storm heading our way. Right now, the weather service is predicting up to a foot of snow for New York City, but I’ll believe it when I see it. The MTA, on the other hand, has to prepare for the weather no matter what, and to that end, they have canceled all weekend work. Only stations along the BMT Brighton Line and the Far Rockaway line are closed due to ongoing work.

On a sad note, the weather is also shelving the Nostalgia Train for the weekend. It’s simply too cold, and there too many contingency plans in place for Transit to devote resources toward the old train cars. It will return next weekend for a final ride in 2009.

So what then can we expect this weekend? Well, due to the need to store as much rolling stock as possible underground, the agency often uses express tracks for storage during winter storms. Thus, trains that normally run express for all or parts of their routes may run local. Passengers using lines that run outdoors may experience slower train rides or longer-than-normal waits. A few weeks, Transit urged passengers who take the A, E, D, F, N, Q, 2, 3, 4, and 5 to allow extra time during snow storms.

Meanwhile, the agency has a fleet of work trains ready to combat the snow. “Our goal is to keep our services up and running so that our customers can get to where they need to be no matter what the weather,” NYC Transit President Thomas F. Prendergast said. “We have a tremendous investment in machinery, manpower and experience so that customer confidence remains high in our ability to transport them safely.”

For those waiting for trains at stations aboveground, be on the look for some anti-snow vehicles Transit sent out a release earlier this week with info:

Snow Throwers – Precise directional snow throwing equipment. Includes a two stage impeller and side mounted rotating brushes to throw snow up to 200 feet and can remove 3,000 tons of snow an hour. This is similar to a household snow blower, just a lot bigger.

Jet Blowers – This equipment uses a jet engine to remove accumulated snow from the roadbed and deposit it a distance from the tracks so that it cannot slide back. This piece of equipment is used primarily to keep the yards clear.

De-Icer Cars – Equipped with scraper shoes that scrape off ice and also uses equipment to direct a stream of deicing fluid to melt and/or prevent ice buildup on the third rail. If ice is permitted to build up, subway car power pickup equipment will not be able to draw electric current from the third rail and the train will stop.

Ballast Regulator – Uses brush/broom to evenly sweep and push up snow onto an undercab conveyer and away from the track.

The picture atop this post shows the equipment ready and waiting for the snow. Will the storm hit? Who knows. But for this weekend, we are spared the pains of weekend service changes.

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MetroCardService Cuts

Pointing a finger at state, city over student transit cuts

by Benjamin Kabak
written by Benjamin Kabak on December 18, 2009

As New York City students face the reality of life without a free MetroCard, most of the outrage has been directed at the MTA. How could the MTA desert the city’s children? How could they play politics with the city’s future? Doesn’t the authority know truancy rates will increase?

Over the past week, I’ve examined both the politics and the mathematics behind Student MetroCard cuts, and the picture is not a rosy one. The state, once a guarantor of the Student MetroCard program, now pays just $6 million in transportation subsidies for its students while the city hasn’t increased its funding past the $45 million mark in a decade and a half. The MTA, meanwhile, is saddled with $160 million in costs for the program.

For families, the pain will be acute. Based on my calculations, it will cost at least $687.60 for a family to send one child back and forth to school every year. Add some extracurricular stops, and the costs will rise to approximately $800 a year. As Sharon Otterman explored today in The Times, many families will struggle to find that money, and the city’s school choice program would suffer. “If I had to pay for the MetroCard, my mother would have preferred a school closer to me,” Alejandro Velazquez, a 15-year-old from the Bronx who travels 40 minutes to school each way, said. “There’s one right down the block from our house.”

I am guardedly optimistic though about the MTA’s position here. What is notable about Otterman’s article is her utter lack of sources who blame the MTA for pushing through these cuts. People are out there who are willing to point fingers, but journalists who are doing their jobs will not give them a platform. The state and city should bear the costs of transporting students, and journalists should know that.

In the end, it’s a tough situation for everyone. Urban areas are not legally required in New York State to provide free transportation to students, and the MTA in particular is under no mandate to give away transit to students while the millions of New Yorkers who rely on the transit network for to power the area’s economy wait longer for more crowded trains. While state officials may want the MTA to “find money” through other cuts that sustain student transit, the reality is that student transit is not the business of the MTA, and student transit is now acutely holding down the MTA from fulfilling its role.

“No other transit agency in the country subsidizes free or discounted student travel,” agency spokesman Kevin Ortiz, said. “Transporting students usually falls on the government body responsible for educating them.” Amen.

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AsidesTransit Labor

Walder, Samuelsen face off over employee cuts

by Benjamin Kabak
written by Benjamin Kabak on December 18, 2009

As Jay Walder takes aim at the MTA’s labor costs, he and incoming TWU head John Samuelsen have engaged in a war of the words. On Wednesday, Walder called on the agency “to eliminate work that is no longer necessary.” He continued, “We must take this place apart to find effficiences that will make it strong…The frank reality is that the majority of our costs come from labor, and we need to find ways to be more productive.”

Samuelsen, on the other hand, defended the overtime his workers accrue and the work schedules of the Local 100. “Our position is: Years of mismanagement and neglect on the city and state level are not going to be compensated for off the backs of Local 100 members,” Samuelsen said. “If they move against Local 100 members with layoffs they are going to have a fight on their hands.”

At some point, the MTA is going to have to overhaul the authority’s internal structure from top to bottom to realize its economic efficiency. That will involve layoffs of redundant managers and the consolidation of agencies. It will also involve an elimination of rampant overtime and the loss of some union jobs. Both sides are going to feel some pain in order for the MTA to stay afloat. We’ll find out if management and the union leaders have the stomach for the consolidation or will simply spend months posturing as the rest of us have to pay.

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MTA EconomicsService Cuts

Many answers, but no real solutions, for MTA woes

by Benjamin Kabak
written by Benjamin Kabak on December 18, 2009

As the MTA struggles with the political fallout of the rampant service cuts the authority may need to implement to cover its budget, officials everywhere are looking for answers. We know that some advocates are pushing a move to cover the operating gap with capital funds — a misguided idea at best — but other officials are searching for ways to provide for a steadier stream of transit funding and not just a one-time fix. The answers are out there, but are any of these proposals a real solution?

Right now, the MTA can look to three sources of potential revenue: the city, the state and the federal government. So far, Mayor Bloomberg has been quieter than most in this brouhaha. He campaigned on transit but has done nothing to support, let alone reform, the MTA since winning reelection next month. He hasn’t pledged to cover student transit costs; he hasn’t tried to renew his calls for congestion pricing or East River Bridge tolls; he hasn’t looked at ways to further fund the MTA. For now, at least, City Hall is a non-starter.

Although the mayor’s silence is disappointing, the words spewing forth from the City Council are downright alarming. As Chris O’Leary detailed at On Transport, the City Council doesn’t have a clue about how the MTA works. After cutting funding for years, City Council members criticized the MTA for a legally required vote this week and claimed that a meeting in the works for months “ambushed” the city. Most of the Council members seem to support the quick fix of moving capital funds.

Up in Albany, things are simply a mess. Sen. Pedro Espada wants the MTA to sell its real estate holdings. In a letter to Jay Walder, he wrote, “The MTA must prioritize fiscally prudent lease and sale of assets before deciding to leave children, seniors and hard-working citizens stranded without a safe, reliable and affordable means to get to and from work, school, grocery shopping and doctor’s appointments.” Selling assets in a down real estate market is a great way to minimize potential gains. I say pass.

Meanwhile, Sen. Brian X Foley is so confident of the MTA’s fiscal state that he is already proposing to roll back the payroll tax. Because the tax provided the MTA less than expected, Foley wants to lower than tax by 68 percent in Suffolk County and 34 percent in Nassau County. Do I really need to tell you how dumb of an idea this is right now? Foley would leave the MTA with even less money than it current takes in.

Sheldon Silver is still a hope, but he hasn’t endorsed tolls or congestion pricing yet. His district stands to lose the most from these service cuts, and I’ll look at him more in depth later today.

For his part, Gov. Paterson, while not proposing any new ideas, seems to recognize the MTA’s limited options. Speaking yesterday with WOR’s John Gambling, Paterson questioned how much the MTA could really save by eliminating jobs and overtime. He echoed Jay Walder’s call to “take the place apart” and noted, in so many words, that reinstating the commuter tax could solve many of the agency’s financial woes. For now, that idea remains the Holy Grail of funding and a political non-starter. I wonder though if Walder and Paterson could succeed in overhauling the bureaucracy of the MTA. It would be a tall undertaking but a vital key to reforming transit in New York.

In the end, for a temporary fix at least, the MTA might be able to turn to the feds. Speaking on New York 1 earlier this week, Secretary of Transportation Ray LaHood expressed the Obama Administration’s support for transit’s future in New York. “It is a priority for President Obama and those of us at the DOT to make sure that cities have good mass transportation,” he said. “We’re willing to work with the state of New York, with the governor with the mayor and others in the legislatures to make sure that New York has a first rate transit system and a transportation system.”

LaHood’s comments suggest to me that the President and LaHood would prefer to see their money go toward expanding mass transit’s reach in New York and not just keeping a struggling authority afloat for a few more months. But if push comes to shove, the feds, with their deeper pockets, just might be, for now, the MTA’s best hope.

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MTA EconomicsTWU

Walder eyes overtime, jobs as ways to save

by Benjamin Kabak
written by Benjamin Kabak on December 17, 2009

One of the strangest realities about the looming MTA financial crisis relates to wages. Non-union employees at the MTA — including everyone in a management position — is currently slated for a 10 percent wage reduction while all union members are going to enjoy three straight years of raises. Chew on that one as the MTA prepares to cut its student MetroCard program.

Jay Walder, the authority’s CEO and Chairman, as well as the MTA Board representatives are well aware of this discrepancy between the MTA’s economic reality and the new labor contract. Their hands, for now, are mostly tied, but Walder is going to examine carefully the MTA’s payroll as he looks to avert potentially disastrous service cuts.

According to The Post, Walder is going after overtime. Currently, the MTA spends more than $500 million a year on overtime, and Walder sees this, rightfully so, as wasteful spending. “We need to take the place apart,” he said, referring to the need to change the culture at the MTA from management on down to the rank-and-file. He expects to layoff approximately 700 employees, and rampant overtime will be curtailed.

Still, other Board members took a more aggressive tone yesterday. Tom Namako reports on one:

Board member Nancy Shevell set her sights on the transit union, saying this year’s fare hikes will end up funding TWU Local 100’s “unrealistic” 11 percent raises over the next three years. “Where did the fare increase go? Where did that money go?” she said. “So much of it is going to our union members and the unrealistic work rules and unrealistic increases they’ve received.

“It is really unfair that one large group is not going to be affected by the economic downturn and another large group — for example, our youth and our disabled and working people — are having to pay the price,” she said.

In response, John Samuelsen did what he seems to do best: He defended his union raises at the worst time possible. “It’s easy to talk about taking a pay cut when you’re making a few hundred thousand a year,” he said of the MTA’s looming non-union paycut. I wonder if Samuelsen is losing the war by winning this battle though. Now isn’t the time to be too vocal in support of a pay raise.

In the end, though, the union raises fall at the feet of the MTA as much as they do the arbitrators who sided with the TWU. Norman Brown, a non-voting Board member who serves the MTA as one of labor’s representatives, chided the former MTA leaders — Lee Sander and Dale Hemmerdinger — for punting on the labor negotiations. He urged the MTA to keep negotiations in the future in-house and avoid arbitration. The union is willing to work with MTA leadership to reach solutions acceptable to both sides, and by involving outside parties, Brown argued, the MTA runs the risk of drawing arbitrators who are not familiar with the way the MTA’s finances work or the way the transit system is run.

Brown, of course, is right. In the end, the arbitrators sided with the TWU in an all-or-nothing hearing because that’s what the city’s other unions have received lately. Never mind that the MTA is a state authority or that it financial ability to pay is not tied directly to tax rates as the city’s is. The arbitration was the death knell here.

Now, though, it’s time for the two sides to work together to solve their differences. The MTA can’t afford increasing costs, and the union members can’t afford to see their employer, the people who sign the checks, stumble toward bankruptcy. Something, from both sides, has to give.

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