Capital Program 2015-2019

It’s full-court press time for the MTA’s next capital campaign. The agency unveiled its initial twenty-year assessment nearly two months ago, and last week, MTA CEO and Chairman Tom Prendergast began to defend his upcoming $29 billion request. After Monday’s MTA Board committee meetings, we have a better sense of what the MTA wants, and over the next twenty years, the agency wants to spend in excess of $100 billion to keep everything running.

On its surface, $100 billion over twenty years is nearly inconceivable. This is $5 billion a year until I turn 50. This is $100 billion in capital funding. This is $100 billion with scant mentions of anything like future phases of the Second Ave. Subway, a rail connection for Staten Island or any other numerous subway expansion projects we dream up on these web pages. This is $100 billion.

But despite the humongous nature of the number, it’s not inconceivable that the MTA will spend this much, and they seem to have a plan. It’s not, as officials continue to note, a sexy plan. It involves a lot of behind-the-scenes work that will replace early 20th century technology in 100-year-old tunnels with mid-21st century technology that will allow Transit run more trains in crowded tunnels. It is, as MTA officials discussed during a board presentation on Monday, part of the natural cycle of components. Acquire or build comes first followed by operating and maintenance followed by renew and replace. Call it the subway circle of life, and it moves us all.

While the last few capital campaigns have been dominated by megaprojects — East Side Access, Fulton St., the 7 Line, the Second Ave. Subway and South Ferry — this expanded look forward at the next 20 years involves the ever-elusive state of good repair. The MTA, not assuming that the money will be there, has recognized the need to push toward that state of good repair while incorporating resiliency standards developed in the 11 months since Sandy hit to prepare the subway system for its next century.

The bulk of this work will include over $18 billion invested in the signal system, and the MTA has taken great pains to stress how large of an undertaking this project will be. Replacing signals require massive system shutdowns, and the way the MTA plans to stagger the work over the next few decades will make the recent FASTRACK treatment seem like minor annoyances. The end result will be greater capacity throughout the preexisting system, and that is likely to be the best way to meet increased subway demand.

As a benefit, the new signals will also lead to a robust countdown clock system, and here, we see another picture emerge. The public will get shiny new toys. The countdown clocks are possible because the MTA needs to know where trains are for safety and security reasons. The latter, in this case, drives the former. We’ll also get a contactless fare payment system sooner rather than later, circulation improvements at some key midtown stations, and eventually some shiny new rolling stock.

So what’s missing? Keeping in mind that we haven’t seen the MTA’s big wishlist yet, it’s worth noting that megaprojects have disappeared. The MTA is not yet proposing Phase 2 of the Second Ave. Subway or any other rail expansion plans within the five boroughs. I expect to see funding for Penn Station Access arrive in the next set of documents to be released later this fall, but I’m bearish on the immediate future of the rest of the Second Ave. Subway. Prendergast wants it to be finished within the next 20 years; he said as much at the Crain’s New York Business breakfast last week. But so far, we’ve heard a lot about signals and not too much about system expansion.

One of less glamorous parts of the MTA Chair’s job involves begging. Every five years, the MTA begins anew planning for the next five-year capital plan, and the head of the agency must go, cap in hand, to various interest groups and politicians asking either for vocal support or money. The ask — nearly $30 billion — is high, but so are the stakes. It requires a cohesive and coherent argument for transit investment as well as a plan for all that money.

On Monday, at the annual Crain’s New York Business Breakfast, Tom Prendergast began his two-year tour in support of the next MTA capital plan. Although the 2015-2019 program has no clear outline yet and the big ticket investments remain a work in progress, Prendergast is already fighting for those dollars. Addressing a crowd of city business leaders, Prendergast defended the MTA’s recent progress and asked for help convincing Albany and the feds to invest in transit.

“We need all of you to become advocates for public transportation and there’s a very specific way you can help,” Prendergast said. “About this time next year, we’ll be bringing our next Capital Program — covering capital projects from 2015 to 2019 — to our Board. We expect it to be roughly the same size as our current Capital Program before the Sandy projects were added, and we’ll be working with our elected officials to identify funding sources for it. But we need your help, too. And when people ask me, ‘How can the business community be supportive?’, the answer is simple: Capital Program, Capital Program, Capital Program. I need your support to figure out how to make these critical investments in our region.”

Prendergast didn’t stop there, though, and his next request was nearly as important as his initial ask. “Our Capital Programs have come to rely more and more on borrowing, and we simply don’t want to keep adding to our debt load,” he said. “That’s why I need you to tell your Congressional and State representatives that the Program needs an infusion of new money this time.”

New money can take many forms, but direct grants are the most obvious. The MTA cannot afford to borrow or bond out more money unless the bonding is explicitly for and pegged to revenue-generating projects such as new subway lines. Borrowing to attain a state of good repair will simply add to to the unsustainable debt burden.

So what will the MTA get for its money? The agency is expected to request $29 billion for the next five years, and it won’t always be, as Prendergast repeatedly said, “sexy.” That isn’t, by the way, his phase. During his brief atop the MTA, Joe Lhota said nearly the same thing, and Prendergast has picked up that message. The MTA needs to rebuild parts of the system that are over 100 years old, including extensive parts of Contracts 1 and 2 of the IRT. Beyond that, the MTA wants to add countdown clocks and, more importantly, train tracking technology to the B Division, and the Metrocard replacement comes due in 2019, just sneaking into the next five-year plan.

As to the megaprojects, Prendergast hedged. He spoke about the need to wrap up East Side Access and Phase 1 of the Second Ave. Subway, and he mentioned that he hopes to see all of the Second Ave. line become a reality before the 100th anniversary of the first bond issue. That’s not, however, until 2036. When pressed by reporters after his talk, he admitted that Phase 2 will be examined for possible funding. I’m holding out hope it will be included. It’s hard, after all, to spend $29 billion on new signal systems, and Metro-North’s Penn Station Access plan won’t be that expensive.

And so it begin is definitely one way to sum up Prendergast’s talk. It didn’t break new ground or reveal anything exciting or special. It simply repeated what needs to be said over and over again: The MTA is asking for a lot of money, it needs the money, and it needs business support to realize its plans. For the next 12 months, that’s going to be the party line.

To keep up with growth and transit demand, the MTA has identified 25 potential corridors for future SBS routes.

For those who were in the city and old enough in 1993, that subway system of yesteryear was a sight to behold. Redbirds roamed the 2, 5 and 7 while stations were amidst only the early days of a rehab program. The system had shed its graffiti, but it wasn’t considered completely safe. Ridership had hit an all-time low, and the Metrocard was but a pilot program gaining headlines but few converts.

Today, whether we like to admit it or not, we have a relatively popular and robust system. Much of the rolling stock is less than 15 years old while the rails have been rehabilitated to restore reliability. The station environments have improved in fits and starts, and safety is barely a concern. Ridership in May reached an all-time high for the month, and no one thinks twice about riding at night. The Metrocard is now obsolete and hopefully on the way out. The 7 line extension will open in 11 months, and the first phase of the Second Ave. Subway is less than 40 months away. Where will the next twenty years take us?

As the MTA gears up for its next capital program and the changing demographics of a growing New York City, that’s the question agency officials are beginning to ask. In a presentation to the MTA Board yesterday, agency officials delivered a framework for a needs assessment that will focus on the next 20 years. The document is available here as a pdf, and it tells the story of a city more dependent on its transit network and a young demographic that has, so far, chosen to eschew car ownership in New York. It anticipates a transit network that will need to be more robust and more flexible as off-peak ridership continues to grow.

For the MTA, the next twenty years may have to mirror the last. Ridership likely won’t grow by another 58 percent as it has since 1992, but the system as it is set up now would be hard-pressed to handle even a 30 percent increase over today’s ridership levels. Eying the future, the MTA sees trips to Manhattan’s Central Business District flat-lining, and areas with historically low ridership are seeing growth. These trends tend to be overstated though as CBD trips still account for a huge percentage of subway rides, and even a small shift of rides to hours outside of peak times is unlikely to make an impact.

Still, the MTA is right to recognize that it must improve Outer Borough transit, and it must assume that car ownership and trips will continue to decrease as gas prices, tolls, parking and congestion remain significant intractable barriers for drivers. With a projected 17 million people in the MTA region by 2035, the agency has to add service, but their plans are modest. They want to attain and maintain a state of good repair while building out the full Second Ave. Subway. This is notable because it’s one of the few times in recent years the MTA has acknowledged the need and desire to keep SAS going. Officials have generally refused to comment on future phases before the current one was fully funded. Generally, though, the Twenty Year Plan’s solution for subway capacity issues focuses around new entrances to better distribute passenger loads while adding 25 Select Bus Service routes. It’s a lot, but is it enough?

This document serves as a guideline for more study. It will form the underlying assumptions that will drive the MTA’s next capital plan, and that plan will likely feature more big-ticket items. I’m hopeful that we’ll see initial funding requests for Phase 2 of the Second Ave. Subway and the initial asks for Penn Station Access as well. Without champions though, we’re unlikely to see the MTA advocating on its own for a Nostrand or Utica Ave. subway, let alone the TriboroRX plan.

The next twenty years will, needless to say, remain a mystery, but two decades ago, who would have believed any part of the Second Ave. Subway would be on its way to reality, that the L train would be a popular line, that people would be buying in Bushwick in droves? The next twenty years are likely to be just as surprising, and the MTA is going to have to plan ahead while moving faster on transit network expansion plans. Buses by themselves won’t cut it, but subways are prohibitively expensive. These are the challenges for the next five years, the next ten years and the next twenty years.

As the major players with stakes invested in the MTA’s capital plan gain a better sense of what the next few years hold, they have grown more willing to discuss the short- and long-term futures for the agency’s ambitious construction scope. We know the authority may scale back on mega-projects after 2014, and that’s a development sure to dismay the contractors and construction companies that benefit, perhaps too much so, from the MTA’s dollars.

Today, Streetsblog checks in with Denise Richardson, the head of the General Contractors Association and one-time MTA official. Richardson speaks of the fears the city had as Albany played chicken with the capital plan and the ways in which the federal government still has sway over the debate.

GCA members are still a bit wary of the House Republicans’ transportation bill, but the immediate focus is on debt. The big takeaway from Richardson:

DR: There has to be a very serious conversation about how to fund the MTA, which is part of the larger conversation about funding infrastructure nationally. We’re not the only place that’s having this debate. As we head into 2014 and the next MTA capital plan, we have to really talk about how we’re going to fund the MTA going forward.

This is a debt-laden capital plan. Everyone who follows the MTA knows that. To the MTA’s credit, what they’re doing is they’re paying off old debt while they take on new debt. The new debt has very favorable terms. Interest rates are as low as they’re ever going to be, so they’re swapping less favorable debt for more favorable debt. But it’s still debt and it still needs to paid. We have to look at a revenue source for the MTA that is stable, recurring and will be there.

With the threat of both federal and state spending drying up over the next few years — and the way such infrastructure spending may be tied into November’s presidential election — no one knows what the next five-year capital plan will resemble. Everyone involved though agrees: The debt situation is getting out of hand.