Capital Program 2015-2019

In some reality, the MTA’s recent five-year capital began nearly 16 months ago at the start of 2015, and we are well into year two of the work. In our reality, Gov. Andrew Cuomo still hasn’t really funded the plan, and the five-year spending proposal hasn’t gone through the state approval process. Yet, on Wednesday, for the third time in two years, the MTA released a draft of the capital program. The agency thinks this one will finally garner Capital Program Review Board sign-off, and in it are plans to begin in earnest Phase 2 of the Second Ave. Subway.

This element of the capital plan — the northern extension of the Second Ave. Subway to Lexington and East 125th St. — is not without controversy. In August of 2014, when the MTA first put forward this five-year plan, the funding request for Phase 2 was $1.5 billion, and the MTA expected to begin construction in 2019. As Cuomo dragged his feet, though, the MTA had to revise the plan, and an October 2015 version included only $500 million for preliminary design and engineering work. The MTA said it couldn’t start work before the end of 2019 and planned to request the balance in the 2020-2024 plan. East Harlem pols were not happy, and politicians began a push to examine construction timelines (albeit one that came far too late).

When the state finally approved a budget a few weeks ago, Phase 2 of the Second Ave. Subway was back on the table, and the MTA has released the third version of their 2015-2019 capital plan that reflects this expenditure (pdf). All told, the MTA will spend around $1.035 billion on Phase 2 of the Second Ave. Subway, with approximately $500 million coming from the feds. The plan is a bit of a hedge as heavy construction won’t begin until 2019, and if the MTA misses that deadline, as the agency expected to six months ago, they can roll the money over into 2020 while lining up the rest of the funding to begin work on that phase.

If all goes according to plan, the MTA will spend around $535 million on environmental, design, and real estate and project support in order to begin utility relocation work for Phase 2. The new plan also, in the MTA’s words, “reserves $500 million to support progressing major construction activities.” This is a promise to maybe kinda sorta begin real work on Phase 2 by the end of 2019 with an eye toward ramping up construction activity through funds available in the next capital plan. (What happens if the next capital plan takes years to approve is an open question.) While the proposal allows for modest expenditures spread out over four calendar years, the reserve is all bucketed for 2019. Do you think major construction will start by then? I’m not convinced.

Meanwhile, at Wednesday’s board meeting, MTA CEO and Chairman Tom Prendergast echoed MTA Capital Construction President Michael Horodniceanu’s off-the-cuff cost estimate from early November. The agency still expects Phase 2 to cost between $5-$6 billion, an exceedingly hight amount even in New York City. Most of the costs seem tied up in the 125th St. station which involves tunneling underneath Metro-North tracks and the Lexington Ave. Subway while building a deep-bore subway stop that’s up to modern safety codes. It’s still not yet clear if the MTA intends to utilize pre-existing tunnel segments north of 96th St. that may be too close to the surface to support the MTA’s current approach to subway construction. We’ll know definitively one way or another within the next year or so.

And thus, this never-ending saga inches closer to another phase. One day, we may even have a full length Second Ave. Subway, but as the tenth anniversary of construction on Phase 1 nears, it’s still going to be a while.

So that he can claim credit for passing the New York state Budget “on time,” Gov. Andrew Cuomo, Senate Majority Leader John Flanagan, Senate Independent Democratic Conference Leader Jeffrey Klein, and Assembly Speaker Carl Heastie came together on Thursday night to announce a budget deal. Everyone in New York State politics is working feverishly through massive documents to understand what’s in and out of the $145 billion behemoth, but we have a clear view of the transit implications. Mostly, the story shakes down as we expected with few actual dollars for the MTA and a false sense of “parity” with spending on upstate roads ruling the day.

For the MTA’s $27 billion five-year capital plan that is now entering its 16th month of being late, the budget allocates a whopping $1 billion in actual cash with some vague references to the overall $27 billion five-year program. Cuomo of course played this up as though the entire thing has been funded, but we are no closer to understanding how this money will be realized than we were yesterday, last week, last month or last year. Unless momentum behind a push for the Move New York plan materializes, it will be more debt or (or is that “and”?) bust for the MTA. (New York also committed to spend an equal amount on upstate roads despite a far worse return on its investment. At least the Erie County executive was happy. After all, New York City residents are the ones paying for his roads, but I digress.)

In response to this magnanimous nothing from his boss, MTA CEO and Chairman Tom Prendergast released a statement of praise, calling the budget appropriations a “monumental win for the people of New York.” It’s not really a win except that it paves the way for the MTA to gain Capital Program Review Board approval and start spending money it doesn’t really have for projects it badly needs. He continued:

“This $27 billion agreement marks the largest investment ever made in the MTA. It is an important victory not only for New York City and its suburbs but for all the communities across New York State. The plan will enable the MTA to maintain critical infrastructure while renewing, enhancing and expanding our system to meet the ridership and growth demands of the future and improving the current experience for the millions who critically rely on our system each day.

The Governor has once again assured a year-to-year increase in state operating assistance for the transit system and brought us a significant increase in support for the MTA, including a commitment to the second phase of the extension of Second Avenue Subway to East Harlem, and billions of dollars for the essential work of keeping the transit system safe and reliable…The MTA has been hard at work preparing projects supported by the new Capital Program and will now submit a revised plan to our Board as well as to the State’s Capital Program Review Board.”

Most of this is what we call pure puffery, but the last sentence is key. The MTA is going to submit their third version of the capital plan — and it will actually restore an important item cut from the last iteration. That’s right; Phase 2 of the Second Ave. Subway is back, baby.

The MTA has gotten a commitment of an additional $1 billion from the state for this phase, but the investment nods at the bifurcated nature of the plan. The current budget will allocate an additional $500 million to Phase 2 so that the MTA will have $1 billion for Phase 2 under the 2015-2019 plan. This should be enough to complete all studies and design refreshes necessary and begin utility reconstruction by the end of 2019 which MTA sources have indicated is an aggressive but doable timeframe. The remaining $443 million will be a part of the state contributions to the 2020-2024 capital plan in recognition of the reality that Phase 2 won’t be completed until the mid-2020s.

After significant blowback when the MTA essentially moved $1 billion of Phase 2 funding to the 2020-2024 plan by eliminating from the 2015-2019 plan, Assembly members Rodriguez and Wright (that is, Robert and Keith and not Alex and David, as baseball fans would hope) were instrumental in securing these funds for the MTA and their constituents. They issued a statement this afternoon. “The restoration of significant funding for the Second Phase of the Second Avenue Subway represents a huge victory for the residents of East Harlem,” Rodriguez said.

So what comes next? The fight for an actual source of dollars for the capital plan will continue; the MTA will submit a revised plan and hope to avoid debt; and Phase 2 of the Second Ave. Subway is exceedingly likely to become a reality within the next decade. It all sounds good, but next week, we’ll take a look at what Paris has planned to open before 2030. And then we can wonder how New York City went so far off the rails. In the meantime, tonight is but one step in a continuing saga.

When the MTA first published its 2015-2019 Capital Program toward the end of last year, it seemed that Phase 2 of the Second Ave. Subway would soon see the light of day. Without pinpointing the total funding need for the stretch of the line that will run from 96th St. and 2nd Ave. to 125th St. and Lexington, the MTA had proposed a $1.5 billion line item that included project management and design, real estate acquisition and initial tunneling. The best laid plans would have seen initial tunneling being in 2019 with the remainder of Phase 2 funded in the 2020-2024 capital plan.

And then nothing happened. Governor Andrew Cuomo, the ultimate arbiter of all things MTA in New York State, didn’t make an effort to ensure the capital plan would be funded until mid-summer, and even then, he used the MTA to wage a petty political battle against the city and Mayor Bill de Blasio. By the time the two leaders set aside their childish fighting, nearly a year had elapsed between the MTA’s initial proposal and ultimate approval of the capital plan. For the MTA, this year meant uncertainty over funding and an inability to move forward on projects for which dollars were not guaranteed. Phase 2 of the Second Ave. Subway was one of those casualties.

When the MTA unveiled its revised 2015-2019 Capital Program last week, funding for the Second Ave. Subway had taken a big hit. Instead of a $1.5 billion request, the agency now included just over $530 million — still a lofty sum and one that would cover the full costs for Phase 2 were we in, say, Paris or Madrid — but the $1 billion cut was the single biggest reduction in the revised plan. The $535 million would fund “environmental, design, and real estate and project support to undertake preliminary construction work, such as utility relocation.” The MTA still plans to build Phase 2, but after a 13-month delay in capital funding approval, they claim to no longer have the time or resources available to spend $1.5 billion on the project before the end of 2019. With fewer dollars available, the MTA could make the decision to ask for more in four years.

And then everything hit the fan. Fallout was loud and angry with politicians accusing the agency of further delaying a massively delayed project, and the optics of withholding money for the Harlem-based sections after building the route through the Upper East Side looked even worse. If you take the MTA at its word, the agency still plans to build Phase 2 when it can, but the when looks a little more distant today than it did a year ago. Plus, New Yorkers aren’t keen on trusting the MTA. Can you blame them?

On Tuesday, local politicians struck back, and they were loud. Urging the MTA to just build the damn thing already, they condemned the agency for cutting the budget now. This was positive activism from politicians who were turning to a familiar whipping boy. In a letter to the MTA, Reps. Carolyn Maloney and Charles Rangel expressed their displeasure with the situation. “We understand that the MTA will be moving forward with preliminary engineering and design, but it is disappointing to know that this project is once again being short-changed,” they wrote. “As you know, the long history of the Second Avenue Subway has involved repeated incidents of funding allocated and withdrawn, plans made and cancelled, ground-breakings celebrated and construction halted. We hope that this substantial funding cut does not signal the MTA’s lack of commitment to building phase 2 of the project.”

The two members of Congress posed a series of questions that need to be asked. They questioned the timetable for Phase 2 — something that is currently a real mystery. Noting that the MTA hasn’t yet requested federal dollars, a move that would commit the agency to build all of Phase 2 or refund a billion dollars to the feds, they asked when the agency plans to apply for New Starts money and enter into a full funding agreement. And importantly, they asked about the total expected cost, another mystery.

Yet, I couldn’t help but think that it was long overdue and years too late. Politicians tasked with oversight duties should have been asking these questions years ago to ensure that Phase 2 started once (or even before, as the Final Environmental Impact Statement contemplated) Phase 1 was completed. These questions need to be answered, but based on the MTA’s speed and competence (or potentially lack thereof), the MTA cannot start Phase 2 work much before 2020. As MTA CEO and Chair Tom Prendergast said in a statement in response to Tuesday’s happenings, “[The $535 million] reflects the work we can realistically accomplish in the next four years given the regulatory and engineering constraints on heavy construction in a densely populated section of Manhattan.”

Meanwhile, the city too put some pressure on the MTA, and this too seemed oddly timed. Just last week, Polly Trottenberg, who is, thanks to Albany inaction on other potential appointees, Mayor Bill de Blasio’s only true representative on the MTA Board, praised the MTA’s capital plan with nary a peep about funding for the Second Ave. Subway. Yesterday, de Blasio’s words seemed to indicate that this cut was unexpected. “I do think it came as a surprise to many people that there was a change in the funding,” he said, “and I think that has to be reconsidered to make sure that everything is being done to move phase two as quickly as it can be done.”

The mayor, as you may recall, recently promised to contribute over $2.5 billion to the MTA’s capital program. Apparently, he wasn’t concerned enough with the details to follow up on how the city’s money will be spent and whether the MTA should be focusing on certain priorities. It is another move that shows the mayor’s lack of attention to transit matters, and it gave Cuomo, via Prendergast, the opportunity to ding de Blasio. In his statement, Prendergast highlighted how Trottenberg a week ago had called the new capital program a “very terrific capital plan.” What a mess.

At this controversy continues to boil, I hope New York City’s political representatives can learn a thing or two. First, paying attention to what the MTA is doing before it gets too late to do anything to change it is important. Imagine if Maloney and Rangel used their influence years ago to find out why Phase 2 planning hadn’t yet begun. Imagine if politicians were willing to hold the MTA’s feet to the fire on the outrageous costs associated with these capital projects. Imagine if de Blasio were to pay attention to transit spending priorities before they become news and not after. Imagine if the MTA were engaged in an aggressive effort to build out the Second Ave. Subway as fast as possible rather than as slow as possible.

The MTA knows it’s facing an uproar. As Prendergast said, “We have committed that if we can speed up the schedule to begin tunneling the East Harlem phase sooner, we will pursue a Capital Program amendment to do so. Governor Cuomo has made clear that he would like us to accelerate work on the Second Avenue Subway, and we are actively looking for ways to deliver the project faster.”

It is also not too late to right this wrong, but it will take considerable political effort and a lot of money. Phase 2 may now not finish until 2025 or beyond, and Phase 3 — the southern part — was originally supposed to take another nine years to complete. Maloney and Rangel should question that work as well. How much longer can we wait?

The MTA has a penchant for angering everyone. Whether it’s rush hour delays or crowded trains or fare increases, the agency is not high on New Yorkers’ lists of favorite things. But rare are the days when a line item in a budget draws as much ire as the MTA’s move to cut $1 billion in funding for Phase 2 of the Second Ave. Subway did on Thursday. Even though the agency still plans to spend half a billion dollars on design prep and real estate acquisition before 2020, lingering doubts over the project’s future have pushed this move onto front pages around the city.

In a certain sense, the MTA is trying to be practical. That there is a gap of at least three years between the expected revenue service date for Phase 1 and the date they can start construction work on Phase 2 is an indictment of other issues with the MTA’s ability to execute on large problems and plan appropriately. The MTA should have ensured that design work for Phase 2 was wrapped by the time Phase 1 opens so that the transition to work on the next section would be seamless. But the opportunity has passed. Instead, the MTA will prep everything necessary to start work during the 2020-2024 Capital Program.

That is, if you take the agency’s word at face value, and few do. As the implication of the $1 billion reduction in spending sunk in on Thursday, no one was happy. Some noted that the MTA would no longer be applying for federal grants that may or may not be available in five years. Others worry that this is the beginning of the end of the Second Ave. Subway. After 100 years, we’ll get three stations and nothing else.

But a funny thing happened on the way to 125th Street: New Yorkers grew aware of the fact that the Second Ave. Subway was actually under construction and would actually open soon, and they want more. The statements on Thursday came fast and furious. House representatives Carolyn Maloney and Charles Rangel issued a joint statement bashing the decision, calling the MTA’s painfully slow construction timeline a “huge mistake.” The two said:

“While we are delighted that the state and city were able to reach an agreement to move the MTA’s Capital Plan forward, we are deeply concerned that roughly one-half of the reduction in the cost of plan is coming from the Second Avenue Subway. The current plan includes only $535 million for the Second Avenue Subway, most of which will be spent for preliminary engineering and design, as opposed to the $1.5 billion originally proposed. The MTA has also dropped its assumption that it would receive New Starts federal funding for the subway during this capital plan. New Yorkers have been promised a full build Second Avenue Subway since the 1920s. Based on the current schedule, one hundred years will have passed and we will still be waiting. This ‘go slow’ approach to the Second Avenue Subway is a huge mistake. ”

Meanwhile, other local politicians hopped on board. Robert Rodriguez, an Assembly representative from Harlem, condemned the move. “The MTA’s vote to drastically cut the 2nd Avenue Subway budget is shocking and indefensible,” he said. “For over a century, New Yorkers from the Lower East Side to Harlem have patiently waited for transit equality to become a reality.Yet, the MTA’s approved plan has dashed those hopes and told New Yorkers north of 96th Street that they don’t matter. This cannot stand. I call on the MTA to correct this mistake, demonstrate fairness and leadership and include funding in the capital plan to complete the Second Avenue Subway up to 125th Street.”

In comments to WNYC’s Kate Hinds, he called the move an “economic injustice.” Relying on Rodriguez’s statements and words from others, Hinds wrote a fantastic and comprehensive rundown of the move which included a look back at how the MTA used the Second Ave. Subway to court money from the mayor and then cut the planned funding once the mayor ponied up the money. It is a must-read on this subject.

In other coverage, The Times wrote about the near-universal condemnation of the funding move, and even the New York Post editorial board, hardly a bastion of bleeding-heart liberals, noted the class issue inherent in the MTA’s decision, even if they used to bash de Blasio again. How do you build a subway line through the Upper East Side while delaying the one through, as Rodriguez put it, “a lower-income community that certainly needs the access as much as the first phase”?

So what exactly can the MTA do here? They don’t have time to restructure the capital program again. In fact, the funding battle between the Mayor and the Governor which led to a delay in approval of the capital plan is a major reason why Phase 2 is being shifted from the 2015-2019 plan to the 2020-2024 plan. The MTA simply couldn’t execute because the agency didn’t know how much money it would have. What they can do is stress a firm commitment to building Phase 2, secure the promise of federal dollars and look to put shovels in the ground as soon as possible. It’s not a perfect solution, and it raises the question of why Phase 2 isn’t ready to start the day after Phase 1 wraps. But it may be the best they can do. Either way, this has become a major flashpoint issue, and there’s no easy way out.