MTA

Gary Dellaverson, then-director of labor relations for the MTA, speaks to reporters during a press conference in New York, Sunday, Dec. 18, 2005. (AP Photo/Ed Betz)

As the MTA struggles to close an operating deficit of approximately $300 million and reformulated its recently rejected five-year capital plan, the agency will be doing so without its long-term CFO. After 19 years at the MTA and the last three as the agency’s chief financial officer, Gary Dellaverson has retired.

At first blush, the timing of this announcements — noted today in a bond buyer’s trade — would raise an eyebrow or two. The MTA is under fire on all fronts for its financial woes. New Yorkers are irate over threatened cuts to student MetroCard programs, late-night bus routes and off-peak services, and the agency must overcome a shortfall in the revenue projected by the state and collected from the payroll tax. Meanwhile, the Governor has just vetoed the agency’s five-year $28.8 billion capital spending plan due to a funding gap of nearly $10 billion. The money just isn’t there.

Yet, Dellaverson’s departure, definitely ill-timed, was a long time coming. The 56-year-old MTA vet had planned to step down from his post in September, but incoming MTA CEO and Chairman Jay Walder asked him to assist his transition with the understanding that Dellaverson would retire at the end of the year. For now, David Moretti, an executive vice president at MTA Bridges & Tunnel, will assume the job on an interim basis.

As Dellaverson departs, he leaves a very tortured legacy though that is no fault of his. After the MTA enjoyed years of healthy financial outlooks and surplus budgets, Dellaverson became CFO in 2007 after serving as the lead point man for the agency’s labor relations. Since 2007, though, it has been one disaster after another. First, the economy and the real estate taxes upon which the MTA so heavily depends went south. Then, after much wrangling, Albany passed a funding package but did not deliver the money promised to the MTA. Thus, the agency is left with a yawning deficit and a hazy financial outlook.

For his part, Dellaverson did his best to bring accountability and transparency to the MTA’s finances. Living in the legacy of the false charges of two sets of books levied at the MTA, Dellaverson was more than willing to open the books at MTA Board meetings and went in depth in his financial presentations. Those available here on the MTA’s website are a testament to an agency committed to better fiscal transparency.

In the end, though, he leaves the MTA at an uncertain time. Walder has promised to overhaul the agency, and cost overruns plague many of the authority’s big-ticket projects. Meanwhile, the dueling deficits in both the capital and operating budgets remain to be filled. For now, Moretti has his work cut out for him, and whoever is the next CFO may be inheriting a fraught position on a sinking ship.

As more late-night straphangers face tickets for not really violating the rules, the MTA will now have to open up the challenges to these summonses to the public. The New York Civil Liberties Union yesterday secured in a victory in federal court in its challenge to the MTA’s long-private Transit Adjudication Bureau. Facing a mandatory federal injunction, the MTA will now have to open its adjudication hearings to the public.

For much of the last thirty years, the MTA has handled enforcement of its rules through the New York Police Department. The NYPD officers who make up the Transit Bureau are tasked with enforcing the MTA’s Rules of Conduct. The penalty for violating a rule is a summons, and those who plead guilty to their summonses get their day in front of the TAB.

The historical problem with the TAB has been its closed nature. Today, after the federal ruling, MTA officials defended the practice of allowing those charged with a violation to determine the public nature of the hearing. “The hearings were never quote-unquote closed; people were just given the right to privacy,” Paul J. Fleuranges, Transit spokesperson, said. “We’ve let the respondent decide whether or not they want to allow anybody inside the hearing with them.”

The problem though with this policy is that it has led to a lack of transparency and precedent. Those charged with a Rules violation have little idea how to defend themselves and what evidence is admissible in a hearing. That changed yesterday as District Judge Richard Sullivan noted how these hearings are simply trials in sheep’s clothing. “In light of these undisputed facts, the Court finds that TAB Hearings ‘walk, talk, and squawk’ like a trial,” he wrote in his decision (PDF), “and as such, the same ‘logic’ that would favor the right of access in the context of a formally styled criminal or civil proceeding applies in equal force in the context of a TAB Hearing, however labeled.”

What then does this mean for the public? In a statement on its website, the NYCLU explains:

Each year, the New York City Transit Adjudication Bureau (TAB) holds more than 20,000 hearings to determine the guilt or innocence of alleged violators of the New York City Transit Authority’s rules of conduct. The hearings are closed to the public unless an accused person consents to an observer’s presence. The NYCLU argued that this practice shrouds the hearings in secrecy, depriving the public of information about the fairness of the hearing process and accused transit riders of an understanding of the adjudication process, and concealing important public information concerning police activity in the public transit system…

“This ruling unlocks the doors that hid from public view tens of thousands of hearings each year,” said Christopher Dunn, NYCLU associate legal director and lead counsel in the case. “Moving forward, the NYCLU will monitor these hearings so we can make sure they are conducted fairly and so we track NYPD enforcement activity in the transit system.”

According to the NYCLU, this probably won’t be the last we hear of this TAB hearings. The NYPD, they say, has issued “up to 171,000 citations annually” for Rules violations, and the TAB upholds more than 83 percent of the challenges to these citations. Furthermore, the NYCLU says that 88 percent of those subjected to police steps over the last five years are black of Latino. Justice underground seems to operate on its own terms.

Right now, then, the MTA’s TAB hearings will become open affairs with everyone’s sins on display. Supposedly, the TAB hearings are fair and afford respondents the same rights a trial. Thorough Google searches question that claim. Meanwhile, the NYCLU will keep a close eye on these cases, and as the cops ramp up enforcement of minor offenses, more riders should turn to these newly-opened TAB hearings to clear their good names.

Disclosure: A few NYU Law students helped the NYCLU argue this case, and I am an NYU Law student as well. I do not, however, know the students who argued the case or had anything to do with it.

Jay Walder is currently the MTA CEO and Chairman because of the success he enjoyed in London and then at McKinsey as a transit consultant. A veteran of New York’s MTA, he helped turn around Transport for London and led an effort to modernize the system. Now, as New York’s transit network stands in need of some major investment and massive upgrades, Walder is looking to bring his team from London across the pond to help drag the MTA into the 21st Century.

He is surrounding himself with his team, though, in an interesting and intriguing fashion. Instead of contracting out to a high-priced consultant firm such as McKinsey, he has proposed a deal that would bring Transport for London officials to the states on a two-year, no-bid consulting deal. It is an unorthodox approach toward transit management, but it just might work. Micheal Grynbaum has the details:

The arrangement, unusual for a pair of public agencies, would be worth up to $500,000 and would pay for Mr. Walder’s former colleagues to fly across the pond and work as on-site consultants in New York. The Londoners’ salary and benefits, along with travel and lodging, would be covered by public funds.

Many of Mr. Walder’s top priorities for the New York system — including computerized, scannable fare cards and arrival-time clocks at bus and subway stops — are modeled after similar programs he introduced in London, where he worked until 2006. “Rather than having to bring in high-priced consultants, we’re getting experts with success already in doing these things, and getting them at public sector costs,” said Jeremy Soffin, a spokesman for the authority.

Staff members from the London agency would charge $125 to $200 an hour, according to a document released this week. The authority called those rates “fair and reasonable,” and said the fees were half what a private consultant might charge.

Reaction to the deal from transit experts and advocates was mixed. Nicole Gelinas as the conservative Manhattan Institute told Grynbaum that she is hesitant over the no-bid contract. “A no-bid contract with a former employer could set a bad precedent,” she said. “Mr. Walder has to bend over backwards here to explain what exactly these people will bring to the table that we can’t get through the expertise for which we’re already paying him.”

Gene Russianoff though was more willing to give Walder the benefit of the doubt. “I think he’s made a case that he’s going to get value for the deal,” the Straphangers Campaign head said. “He deserves a chance to do it on his own terms.”

In the end, the MTA Board will have to approve the contract, and even the no-bid nature of it shouldn’t turn them off from it. They don’t need to make it a precedent if they are clear that it is a one-time offer.

My only gripe with this deal is its duration. It is definitely a cheaper deal than one the MTA would sign with McKinsey’s transit experts, but does the MTA need a two-year treatment with Transport for London? Can they bring the good ideas with them for 12 months?

As Walder wraps up his third week in the job, he has shown a willingness to throw out new ideas and bring in new people with a background of success. His desire to succeed and his background as a transit expert — as opposed to a real estate magnate or politically-connected businessman — are manifesting themselves. We can only he can deliver the results we need.

Tomorrow, the New York State Court of Appeals will hear arguments in a case that could clear the way for Bruce Ratner to construct an arena for the Nets and his Atlantic Yards project above the MTA’s Vanderbilt Railyards. If Ratner wins, the state will be able to use eminent domain to clear out the last remaining residents on Yards’ land. With success for Ratner looking likely, the real estate mogul is now facing a new roadblock from a suit aimed at the MTA over their sweetheart renegotiation of a sweetheart deal.

Develop Don’t Destroy Brooklyn along with four state representatives and the Straphangers Campaign have filed suit against the MTA for renegotiating the Ranter land sale without going through the proper legal procedures. According to the files, the MTA did not have the current value of the property appraised and did not open up the property rights sale to a competitive bidding process. Both procedures, the plaintiffs allege, are required under state law, and they are seeking an annulment of the sale.

“We have laws in this state that forbid these kinds of sweetheart deals. With the Atlantic Yards, the MTA violated our legislation and the public trust. Their sale of the Vanderbilt Yard to Ratner must be annulled,” State Sen. Velmanette Montgomery said.

Both The Brooklyn Paper and The Times have coverage about the lawsuit. As I summarized in June, this new deal for Ratner is blatantly outrageous. I wrote four months ago:

So what did the MTA do? Well, instead of opening up the process to a new round of bidders and requests for proposals, the agency has simply sweetened the deal for Ratner. Instead of a lump sum payment of $100 million, he will pay just $20 million upfront and cover his purchase in installments totaling $80 million over the next 22 years. He will pay $2 million a year from 2012-2016 and then $11 million a year for the following 15 years. Instead of a $225 million rail facility, he will supply one with three-quarters of the original plan capacity for $150 million instead.

At the time, MTA Board members protested the deal, and now the politicians are angry. This could be a long fight for the MTA, and an injunction against the sale could impact Ratner’s ability to secure financing. He has until the end of the year to secure $700 million in tax-free bonds for the Barclays Arena.

“While the MTA is forcing service cuts and fare increases on the people of New York, they are giving Forest City Ratner just about a free ride,” Montgomery’s statement said. “You can’t shortchange the public to benefit a developer.”

It must be tough to live through day one at the helm of the MTA. In a city of know-it-alls, everyone wants to be the first, second or even third person to tell you how to do your job, and Jay Walder yesterday was no exception.

Fresh off the plane from England and living on little sleep, Walder took the reins of the MTA and promised big changes. But first, he needs an action plan. “By the end of my first 100 days at the MTA, we will produce an action plan for moving forward with concrete goals and timelines,” Walder said to reporters on Monday. “We will make the objectives clear and the communities we serve should hold us accountable for achieving real results.”

Who wants to wait for Walder though? Heather Haddon of amNew York offered up her brief list of priorities, and Gene Russianoff and the Straphangers, in a press release not available online, also listed what they consider to be Walder’s priorities. The Straphangers’ list is fairly typical: Block maintenance and station agent cuts; improve bus service; utilize the line manager program; support public authority oversight. Ho hum.

With this lists in mind, I’m going to — surprise! surprise! — offer up my own list of the top five initiatives that Walder should tackle. He doesn’t need 100 days to put this action plan together, and in fact, at least one of these suggestions could be accomplished before the 100 days is up.

1. Overhaul the MTA’s Website
This particular initiative is really not that ground-breaking, and yet, it is a topic upon which I have harped for years. As I said in January, the MTA’s website pales in comparison with those of its competitors. When we examine the WMATA’s site, Transport for London’s homepage and the Chicago Transit Authority’s site, we see transit network websites designed with clear interfaces, easy-to-find trip planners and information at our fingertips. When we look at the MTA’s Internet home, we see a mess.

To make matters worse, the MTA’s site hasn’t really improved its look in six years. Don’t believe me? Take a look at its homepage from Oct. 8, 2003. The site has more information than it did during the early 2000s, but the look and navigation remain outdated and impossible to use.

Overhauling the MTA’s website will give the agency a much better public face and presence on the Internet. It’s 2009; those qualities go without say.

2. Open MTA data
In mid-September, I explored how the MTA is struggling in an age of open information. They had been pursuing spurious copyright claims against iPhone application developers, and while these actions have since ceased on the part of the transit agency, the data remains inaccessible. Hand in hand with a website redesign is an overhaul of the MTA’s data policies. The agency should open its scheduling information to developers and allow them to run wild with it. It can only contribute to transit interest and ridership demands.

3. Come clean on the Second Ave. Subway
When the Second Ave. Subway project got off the ground earlier this decade, Phase I was supposed to open in 2012, and the other Phases were to follow by 2020. On the precipice of 2010, we now know that Phase I may not open until 2018, and the other Phases remain unfunded ideas. In fact, in its next five-year capital plan, the MTA is requesting funds to finish Phase I but no money for Phase II or beyond.

While the MTA Inspector General is working on a report, Walder should commission an internal review of the Capital Construction department. Why is this project six years behind schedule and counting? What can be to speed up the pace of construction and restore a drive to see a full Second Ave. Subway with the next 10 or 15 years? What is wrong with the MTA’s process that multi-year delays plaguing multi-billion-dollar projects become the norm rather than exception?

4. Improve Surface Transit
New York City Transit’s buses are so slow that the Straphangers award them medals for lack of speed. Meanwhile, our city streets are so congested with unnecessary cars that buses can’t get anywhere. Make a strong push to reclaim the streets for transit. There is no reason that every avenue in Manhattan without a subway line under it can’t have Select Bus Service by the end of next year or 2011. There is no reason why outer borough thoroughfares should be held captive to automobile traffic at the expense of those using the buses. It might even be time to take a look at Vision42’s plan to remove cars from 42nd St. Since subway line construction is proving fiscally impractical right now, Walder should become a drive to give substantial surface space to bus lines.

5. Look to the Future
In early 2008 as part of the celebration of the 40th anniversary of the MTA, then-CEO and Executive Director Elliot Sander unveiled an ambitious if impossible 40-year plan to bring transit to, well, everywhere. In his vision, the major avenues would feature physically separated bus lanes, and a TriboroRX line would connect underserved areas in Brooklyn, Queens and the Bronx. To many this plan is but a dream, but as Walder takes over, he should keep that dream in mind. While the subways need a lot of work today, we can’t be afraid of pushing for a better future. Only by keeping those goals in mind can we realize and overcome the problems facing a healthy and vibrant transit system in New York City.

Jay Walder chats with reporters during his ride into Manhattan on the 7 train. (Photo courtesy of MTA/Patrick Cashin)

Nearly five months to the day since Elliot Sander stepped down as MTA CEO and Executive Director, the citys’ transit agency has a new permanent leader. Today marked the first day of work for the incoming CEO and Chairman Jay Walder. A veteran of the MTA and the man credited with modernizing the London Underground, Walder will spearhead the agency at a time of fiscal distress and amidst a public outcry for better service.

To begin his six-year term, Walder has engaged in a press tour lately. He spoke with the Daily News and a reporter from WNYC over the weekend. This morning, he greeted commuters at Flushing/Main St. on the 7 line and rode the subway into Manhattan with those who cover transit for the city’s news outlets. While I couldn’t make the meet-and-greet due to an early-morning class, Walder’s comments seem consistent across the medium: He wants to improve the customer experience, and he wants the agency, notorious for its slow rate of adaptation and innovation, to improve its response time and generally pick up the pace.

“By the end of my first 100 days at the MTA, we will produce an action plan for moving forward with concrete goals and timelines,” Walder said this morning. “We will make the objectives clear and the communities we serve should hold us accountable for achieving real results…”New Yorkers should be able to expect the same type of customer experience riders enjoy in London, with accurate arrival information and modern fare technology.”

While streamlining internal operations will be high on his priority list, the sexier issues he plans to tackle focus around technology and customer service. Known as the person who brought the Oyster Card to London, Walder understands the benefits of a faster fare-payment system, particularly as it applies to bus loading times, and wants to see countdown clocks implemented faster than the MTA currently plans to do so.

“I think we have to find a way to accelerate that timetable,” he said to WNYC’s Matthew Schuerman. “It helps. If you watch the London Underground, if you simply see people coming down into the station, they walk down to the platform. Everyone does exactly the same thing. They look up at the sign and find out exactly when the next train is coming and whether that sign says the train is coming in two minutes or four minutes or eight minutes they feel better with the knowledge that the system is running, that the train is coming and they can deal with that [wait] accordingly.”

In a more general sense, Walder wants the MTA to become more user-friendly. “We really want to have a system that provides an ease of use all around that we don’t have today, whether that’s the ticketing system or whether that’s electronic information that tells us what’s happening or whether that’s a website that gives us the information about what’s happening with the system because we’ve become accustomed to getting that in other environments,” he explained to Schuerman.

He talked further with Pete Donohue and the Daily News about improving both technology and the bus system. I am particularly pleased to hear Walder touch upon the MTA’s website as it is currently stuck in 1999. A new information-laden site would do wonders for the agency’s public image and ease of use.

It’s hard not to get excited about Walder. He has more power than Lee Sander did and comes from a similarly qualified background. He isn’t a real estate mogul (Peter Kalikow) or a politically-connected rich lawyer (E. Virgil Conway), and he should serve out his full six-year term.

That said, he faces a Herculean task. He has to cut through the bureaucratic red tape that currently surrounds every facet of the MTA; he is coming on board at a time of strained labor relations; and he has to figure out a solution to the MTA’s $10 billion capital funding while working to ensure that the agency’s operating costs are funded as well. In other words, he is trying to modernize the system while trying to keep it afloat as well. Walder, all six feet, six inches of him, handled London. Now let’s see how he does in New York.

After the jump, a photo of Walder as he greets passengers who are much, much shorter than he is. Photo courtesy of MTA/Patrick Cashin.