A meeting of the Permanent Citizens Advisory Committee (PCAC) to the MTA was convened at 12:00 noon on March 3, 2011, in the 5th floor Board room, at MTA Headquarters, 347 Madison Avenue, New York City. The following members were present:
• Andrew Albert
• William K. Guild
• James F. Blair
• Marisol Halpern
• David Buchwald
• Sharon King Hoge
• Sheila Carpenter
• Trudy Mason
• Shirley Genn
• Maureen Michaels
• Randy Glucksman
• Edith M. Prentiss
• Stuart Goldstein
• Larry Rubinstein
• Ira Greenberg
• Michael Sinansky
• Christopher Greif
• Burton M. Strauss, Jr.
• Toya Williford
The following members were absent:
• Gerard Bringmann
• Rhonda Herman
• Richard Cataggio
• Thomas Jost
• Francis T. Corcoran
• Matthew Kessler
• Owen Costello
• Jessica Gonzalez-Rojas
• Mark Epstein
• Neal Zuckerman
In addition, the following persons were present:
• William Henderson -PCAC Executive Director
• Jan Wells -PCAC Associate Director
• Ellyn Shannon -PCAC Senior Transportation Planner
• Robert Foran -MTA
• Alan Kritzler -MTA Inspector General
• Marsha Desormeaux -MTA
• Hector Garcia -LIRR
• George Haikalis -Concerned citizen
• Ken Stewart -Concerned citizen
• Joseph Garber -Concerned citizen
Approval of Agenda and Minutes
The agenda for the March 3, 2011 meeting was approved as amended. The minutes of the December 9, 2010 meeting were approved as amended.
Chairs’ Reports
The PCAC, LIRRCC, MNRCC and NYCTRC Chairs’ Reports are attached to these minutes.
NYCTRC Report
Trudy Mason asked if the snowstorm report discussed in the Chair’s report mentioned problems with buses. Bill Henderson stated that it does.
Maureen Michaels said that she took a look at the Chicago Transit Authority’s website and that they seem to have a greater capability to respond to snow and were able to get up and running after a snowstorm more quickly than New York City.
Edith Prentiss stated that the worst experience for Access-A-Ride (AAR) customers this winter was the shutdowns of service in January. Ms. Prentiss questioned why vehicles can travel in the snow in Chicago and upstate New York, but cannot travel here.
Larry Rubinstein asked whether the PCAC should discuss a lockbox for state funding. Ira Greenberg at this point asked if anyone objected to PCAC taking a position in favor of a lockbox. Trudy Mason stated that she felt PCAC should take up the issue of a lockbox, because proposals for congestion pricing will be raised again in Albany. Larry Rubinstein suggested that the PCAC should discuss creating a funding lockbox independent of any plans for congestion pricing.
Ms. Mason asked if MTA is getting out of office space that is more expensive than that recently leased for the Business Services Center (BSC).
Stuart Goldstein noted that he had asked a question regarding the savings that would be expected from the BSC. Bill Henderson stated that he still has not received response to this question.
LIRRCC Report
Maureen Michaels commented that she spent a morning trying to suspend her MTA Alerts. She said that the MTA website it is very difficult to navigate.
Ms. Michaels also stated that in her opinion the future of Long Island Bus is a real issue, because 50 percent of their bus routes are proposed to be discontinued. Nassau County doesn’t have enough money to pay for the system. She suggested that the PCAC should consider taking action on the proposed changes and that a Long Island Bus representative may be needed on the PCAC. A suggestion was made that LI Bus should conduct customer surveys similar to those done by the Long Island Rail Road. Ms. Michaels also stated that letters were sent to 45 local governments with regard to the clearing of parking lots that serve LIRR stations and that Pat Vecchio of Smithtown called her to defend their snow plowing efforts.
Chris Greif stated that the reduction in Long Island Bus service is not fair for our senior and disabled population, as these are people who depend on the bus. Ellyn Shannon said that if MTA spends money subsidizing Long Island Bus, it comes out of the resources available for the MTA’s other operating agencies. Edith Prentiss noted that Long Island Bus was a promise that was not funded and asked why Nassau County should be able to claim poverty and avoid fully funding the system.
Sheila Carpenter commented that Suffolk County should not be used as a model for Nassau County bus service, as Suffolk Transit provides no 24 hour service and very limited Sunday service. Ms. Carpenter also mentioned that seniors are getting more and more dependent on transit. Trudy Mason observed that the official name of Long Island Bus as established in law was the Metropolitan Suburban Bus Authority and she believes that it had been changed.
Ira Greenberg stated that the PCAC should take a position, oppose the Long Island Bus cuts, and ask Governor Cuomo to step in to save Long Island Bus service.
MNRCC Board Report
David Buchwald stated that there were so many problems on the New Haven line due to the severe winter weather that Metro-North had to issue and operate a reduced schedule. As a bright spot the first M8 cars, which will operate on the New Haven Line, have finally been delivered. He also noted that the Council has made plans to have a “Meet the Metro-North Railroad Commuter Council” event in Grand Central Terminal as a way of reaching out to commuters.
NYCTRC Chair’s Report
Mr. Albert noted that there have been a number of station name changes and that some of these changes were never well publicized or widely announced. A new subway map has been released, which reflects these name changes.
Mr. Albert stated that there has been a lot of discussion about the countdown clocks that are appearing in A Division stations. It has been observed that these systems vary widely in terms of accuracy. The B division stations are not yet included in the system, although there are some pilot tests of similar systems taking place on the B division. He noted that there is still work to be done to develop an efficient way of alerting customers of delays.
Trudy Mason commented on Pete Donohue’s article in the NY Daily News about the obsolescence of the subway communications system. She said at the 86th Street Station, there are two clocks at opposite ends of the platform.
Ira Greenberg said that the LIRR’s customer information system is older and does not adapt well when there are problems. During some of the severe winter weather, the system went blank.
Andrew Albert observed that snow was also a problem for NYC Transit. He said that the subway lines that run in open cuts were really susceptible to storms and expressed his hope that those responsible for the system learned something from the experience.
New Business
The Committee discussed several issues that had been raised by members. A motion was made to support congestion pricing or similar pricing systems so long as the revenues so derived were placed in a “lock box” that could be accessed only for the benefit of the MTA system. The motion also provided that the PCAC supports placing current dedicated revenues in such a lock box. Mr. Albert proposed that the motion state that using the MTA’s dedicated funds for non-transportation uses would amount to a breach of trust. This addition was agreed to. Ms. Mason proposed a clarification that this position would apply to dedicated funds regardless of source, including but not limited to congestion pricing revenues. This addition was also agreed to. The members voted to approve the motion without dissent.
Ira Greenberg proposed that PCAC will, led by LIRRCC, should oppose the proposed Long Island Bus cuts. As a part of this effort, the PCAC should forward a letter to Governor opposing cuts and asking for his intervention on behalf of Long Island Bus and Able-Ride users. A motion was made and seconded and was approved by the members.
It was proposed that a nominating committee be appointed to present a slate of candidates for PCAC officers for the two years beginning in June. A committee consisting of the three riders’ Council Chairs and Christopher Greif was approved by the members.
Old Business
No old business was discussed.
Introduction of Robert Foran, MTA Chief Financial Officer, to discuss the State of the MTA’s Finances
Mr. Foran said that he wanted to discuss the MTA Budget that was just adopted. The adopted budget is contained in the February 2011 Financial Plan and in this budget, the MTA’s deficit exclusive of actions designed to bring it into balance was $1.046 billion. The budget balancing actions include $411 million in increased revenues from fares, and expenditure cuts of $211 million from recurring savings from actions that were implemented in 2010. He said that MTA management is now specifying the $500 million in additional efficiencies that were included in the plan. In addition, the budget calls for two years of net zero wage increases. This is an expense saving in the present and saves money in the future by not implementing wage increases that would be compounded by later increases. All of these actions bring the MTA to a $3 million cash surplus for 2011.
Mr. Foran said that in 2012 the MTA will start with a $1.5 B deficit, but raise $.5 billion from fare increases and find cuts of $539 million. Combined with $271 million in labor savings, these actions result in a projected $240 million deficit.
Burt Strauss asked if projected growth in real estate taxes is included in the MTA’s financial plan. Mr. Foran responded that there have been some positive signs from the real estate market but not enough to be a trend that can be relied upon.
Mr. Foran stated that the MTA and its agencies had made $100 million in administrative cuts, which amount to 20 percent of the positions at MTA Headquarters and 15 percent of the administrative positions at the operating agencies. He also said that there have been significant reductions in overtime, but that it is not realistic to reduce overtime spending to zero. Mr. Foran distinguished between good overtime, which allows the organization to operate more efficiently and creates savings greater than its cost, and bad overtime, which does not generate benefits for the organization. He noted that MTA Bridges and Tunnels did a complete overhaul of the deployment of personnel from the top down and realized about $25 million per year in recurring savings.
Mr. Foran said that the MTA had renegotiated contracts with its fifty largest vendors resulting in $22 million in savings this year and $70 million over three years. Paratransit reductions will save $80 million over three years, and service cuts will result in $92 to 93 million in recurring savings. There are also projected to be additional MTA efficiencies and new savings targets. He said that the goal is to not impose any further budget-driven service cuts. An example of additional savings that have been found is that New York City Transit had recently renegotiated a contract to provide health care for represented employees that had never been subject to competitive bidding. The resulting contract should save $350 million over 5 years
Another area that Mr. Foran highlighted is strategic sourcing, which involves developing common descriptions of goods and services used in different parts of the MTA and purchasing them jointly. The MTA also wants to optimize standards for procurement by specifying standards that are equal to but do not exceed necessary levels of performance; this will save $20 million per year. Streamlining information technology is expected to save $15 million per year.
Mr. Foran said that, although it is a one-time saving, the MTA can generate substantial savings by managing its inventory better, drawing down excess inventory and establishing realistic inventory levels. All told, efficiency initiatives are expected to save $667 million this year, over $1billion per year by 2014, and $3.81 billion over 4 years. While the budget will be balanced in 2011, even with these initiatives there is still a $247 million deficit in 2012.
Mr. Foran outlined external actions that have had impacts on the MTA’s finances. He said that legislative actions in the current state budget included a $200 million gross reduction in Metropolitan Mass Transportation Operating Assistance (MMTOA), but only a net loss of $100 million, as $100 million in planned pay as you go capital spending will be replaced by capital spending financed through State bond proceeds, which the MTA doesn’t have to repay. The New York State Division of Budget is expected to work with the MTA to adjust the timing of payments to prevent cash flow problems. Mr. Foran noted that they did so last year and he believes they will do so again.
Mr. Foran also noted the impact of severe weather on the MTA budget. He said that it had cost the MTA $15 to16 million in operating revenues and had an unknown but significant impact on expenses. Fuel prices will also impact the budget, as they were estimated in September. Fuel prices are up significantly, but the MTA has locked in fixed prices on compressed natural gas, where one-half of usage is protected with a hedge that is below budgeted cost. Low sulfur diesel fuel is also hedged, with prices on 15 to 16 percent of usage locked in at a cost that is above budget. He said the MTA will need to have a plan to address new costs and revenue losses, but management assumes that cuts to MMTOA will be for this year only.
Mr. Foran said that the MTA has guidelines to direct actions that it takes to close budget gaps. These include not making budget-driven service cuts, not implementing fare and toll increases before those planned in 2013, and trying to focus on recurring savings. He said that the MTA will take one shot savings, but prefers that the savings be recurring.
Mr. Foran said that a remaining issue involves GASB 45 standards for dealing with retiree health care. These expenses are not funded in advance, but rather are paid as they are incurred, and funding in advance of expenses is not required. Nevertheless, the MTA faces a $13 billion liability for future retiree health care expenses and is trying to set money aside to address this obligation. In 2010 $49 million was set aside for this purpose, but the 2011 budget provides that this contribution will not be made this year. There are also no provisions for wage increases for non-represented workers, who have gone three years with no increase.
Mr. Foran also discussed some strategic business initiatives that the MTA is examining. One of these involves the non-revenue fleet, which consists of vehicles not used for passenger transportation. The MTA owns lots of vehicles and each agency has fleet and own maintenance. It has been suggested that a Zipcar-like arrangement could provide necessary vehicles at a lower cost. Many people want to do this but there has been company-wide resistance because of reluctance to give up control. However there is also a willingness to do so because of the need to find cost reductions. Mr. Foran said that there will be further reductions in the operating agencies. When asked by legislators how he knew that the MTA could make more expense cuts, Jay Walder responded that the MTA has already made cuts and can do more.
Ms. Michaels asked Mr. Foran if she told you him she could provide $10-20 million per year in additional revenues would he be interested. She said that this amount is available by improving fare collection, noting that ticket collection is erratic and from $10 to 20 million in tickets are going uncollected each year. Ms. Michaels said that she has been on trains in last two weeks where tickets not collected and that the riders view the shorter ticket validity periods and the refund fee as cynical attempts to mask the failure to properly collect fares.
Mr. Foran stated that the MTA spends 15 percent of the amount collected on fare collection. He said that sometimes train personnel can’t get through the cars to make collection. Mr. Foran noted that if making fare collection more effective is easy or even if it is difficult and makes economic sense, the MTA will do it, but at the same time there is a major effort underway to drive down fare collection costs. He said that reducing the validity period for tickets was done to deal with uncollected fares, but this was not the motivation for imposing the refund charge, which was motivated by the costs of issuing refunds.
Mr. Greenberg said that there may be unusual circumstances that result in fares not being collected, but there are also trains where tickets are regularly not collected.
Mr. Albert asked whether the MTA has had any negotiations with the Transport Workers Union (TWU) on the net zero wage increase proposal. Ms. Mason asked what would lead the MTA to believe that the TWU would agree to this proposal. Mr. Foran responded that the net zero proposal means only that the net impact of any contract will be zero. If there are offsetting cost reductions, there can be wage increases as a part of the settlement.
Ms. Carpenter said that she was recently on a Babylon Line train at Wantagh station where a passenger had a heart attack, but there were only two conductors available to assist. She asked whether there had been any thought given to increase staffing on trains. She also noted that she had heard someone say that LIRR employees do not have pensions and wondered what might have been meant by that comment.
Mr. Foran stated that there are a variety of retirement plans for LIRR employees, including Railroad Retirement. Railroad Retirement is administered by the federal government, and he noted that this may have been the basis of the comment.
Edith Prentiss said that there is a great deal of revenue loss from “swipers” selling entry to the system in Washington Heights and questioned what can be done to deal with this problem.
Mr. Foran stated that enforcement needs to be cost effective but sometimes decisions are made that underestimate the costs of certain courses of action. He said that management will re-evaluate how it is dealing with these revenue losses.
Ms. Prentiss also stated that Access-A-Ride is a disaster produced by the MTA’s decision not to provide accessibility throughout the system.
Larry Rubinstein asked for further clarification regarding the proposal for net zero wage increases. Mr. Foran gave the example that if an MTA agency is able to change work rules, such as the double pay that is provided for an engineer who must switch between diesel and electric trains, then the savings can be quantified and used to increase base wages.
Mr. Rubinstein asked about the Long Island Bus situation. Mr. Foran stated that the MTA is a contract operator for Nassau County, which is the owner of the system. Because the County has not met its financial obligations, the MTA has subsidized Long Island Bus with $140 million over the years and $24 million in this year alone. He said that MTA Management is trying to align the revenues with expenses and has reduced expenses at Long Island Bus, but is also seeking to reduce costs by providing less service. In this effort management is trying to minimize the number of people affected by eliminating routes with the lowest ridership. He said that the MTA Board agrees that the MTA can’t continue to use revenues that are intended to support other services to subsidize Long Island Bus.
Stuart Goldstein asked what other initiatives, beyond procurement and communication, the MTA is examining. Mr. Foran stated they are still looking at communications costs and they are also looking at right sizing the MTA’s real estate holdings through a study being conducted by the MTA Real Estate Department. These initiatives may have initial costs but will reduce expenses over time.
Mr. Greif stated that he is glad to see some Brooklyn express buses back on the schedule, but there remains no local bus correction between Manhattan and Brooklyn. Mr. Foran replied that this is an operational issue and he could not comment on it.
Burt Strauss commented on the need for working elevators and escalators throughout the system. Mr. Foran stated that the MTA recognizes that this is a serious problem, but that the MTA’s unique problem is that NYC Transit operates 24 hours per day, 7 days a week, but even without this span of service other transit agencies nationally are facing similar problems. Also, we have heavy loads on the escalators in the system, which increases wear and maintenance issues. He said that Chairman Walder has committed to a plan for improving the performance of elevators and escalators.
Randy Glucksman stated that the McKinsey and Company procurement had the appearance that it was related to Mr. Walder’s history with the company and looked terrible to members of the public. Mr. Foran responded that the decision on this contract was not made by Mr. Walder and that Charlie Monheim oversaw this procurement. He said that this is a gainshare contract, where McKinsey was the most qualified proposer for the project. The selection team thought that McKinsey was the best choice for the task and part of the contract is to train MTA and operating agency people in processes for seeking cost reductions internally.
Jim Blair asked Mr. Foran if he could comment on the outlook for dealing with capital needs beyond the current year. Mr. Foran stated that MTA is $9.9 billion short of the funding that it needs to complete the current capital program. There is no significant State funding for the last three years of the program. The problem is widely recognized, and the Legislature, Governor, and the MTA will work on a solution to this problem later this year, after State operating budgets are settled. Nevertheless, he noted, the MTA is still working to make Capital Program more efficient.
Ms. Michaels commented on how the LIRRCC has been challenging the LIRR about inventory that it has left on the sides of its tracks. She said that the Council’s motivation is to clean up the right of way, but she can point to many places where excess inventory still sitting by the side of the tracks. Mr. Foran stated that reducing excess inventory is what MTA management is seeking to do, and has saved $7 million through doing this. He said that there are many considerations with regard to inventory, but the MTA realizes that money tied up in inventory is not available for use in operating the system.
Adjournment
The meeting was adjourned at 2:00 pm
Respectfully submitted,
Deborah Morrison
PCAC Administrative Assistant
Permanent Citizens Advisory Committee to the MTA
Chair’s Report: Ira Greenberg – March 3, 2011
On February 2, PCAC released our report, Minutes Matter: A review of performance metrics at the MTA. The New York Post published a story on the release and Jan Wells appeared live on News 12’s Long Island Talks to discuss the report that evening. You have been sent a copy of the report by email, and printed copies of the report are available upon request. We have a copy of the LI Talks program on disk, which is available to those members who are interested. Thank you to Jan and Ellyn for their efforts in putting this important report together.
I urge you to read the report It’s focus is on passenger based measures fpr on time seervice and what on time means. As I said, “A schedule is a promise. Five minutes late is not on time. Schedule times are not published as ‘ish’.”
We hope that our report will lead to the use of passenger based statistics for the evaluation of capital projects as well as a better management tool. Investments should be made that reduce time spent travelling. Will service dependability be improved and how much time will be saved by how many people (people-hours) as a result of a particular project? We want the capital program to get people to where they are going on tme.
At the January 26 MTA Board meeting, MTA Chief Operating Officer Charlie Monheim presented an initial report outlining the lessons learned from the MTA’s review of the December 26 storm. The review acknowledged a number of the shortcomings that we have discussed, including the differences in quality between communication in advance of the storm and communication once the storm began. You received a copy of Mr. Monheim’s presentation via email, and staff has a few paper copies today if anyone would like one. We are asking the riders groups in Chicago about their experience this winter.
On January 31 PCAC staff and NYCTRC Chair Andrew Albert met with staff from the US Government Accountability Office’s Department of Physical Infrastructure, which is interested in the role the NYCTRC plays in ensuring the accountability of the MTA. The Office is currently working on a project involving the Washington DC Metro transit system. The meeting was dynamic, and Department Director David Wise and his staff were very interested in the Minutes Matter report and other means of measuring the value of infrastructure investments in the MTA.
The Governor released his proposed budget on February 1, and the news isn’t good for the MTA or the riders. The budget includes a net $100 million cut in the MTA’s budget, with these proceeds from the taxes dedicated to the support of public transportation essentially transferred to the State’s General Fund. The PCAC released a statement opposing this transfer and will continue to vocally advocate with the Governor and the Legislature.
As you probably already know, Governor Andrew Cuomo has indicated his support that Jay Walder will continue in his role as MTA Chairman and CEO. This represents a departure from common practice where new Governors generally replace the existing MTA Chairman with an appointee of their choosing. The Governor highlighted several positive steps that Mr. Walder has taken, including the streamlining of the MTA.
Many of you have also heard that Pat Foye resigned from his post as Deputy Nassau County Executive, but he intends to remain on the MTA Board despite leaving the County administration. He has asked some challenging questions of MTA management and was among the two Board members to vote against the last fare increase. Recently, we learned that Mr. Foye will be joining the Cuomo administration as Senior Economic Advisor to the Governor. His MTA Board term extends through June 2015.
On February 8, Bill Henderson, Jan Wells, and Andrew Albert traveled to New Brunswick to hear Amtrak President Joseph Boardman discuss Amtrak’s plans for managing and improving the Northeast Corridor, which includes the Gateway Tunnel. While these projects are in the early planning stages, we need to be aware of them and their potential impact on the region’s transit system. I am hopeful that the death of the NJ Transit tunnel will be an opportunity for the LIRR and MNRR at Penn Station and better transit access to the region’s core.
While on the subject of Penn Station, you may be interested to know that last month the Transit Museum opened a new exhibit at the gallery space in Grand Central Terminal, entitled The Once and Future Pennsylvania Station. I’d encourage you to take a look at the exhibit as there are some incredible artifacts in the exhibit that you will enjoy seeing.
At our December PCAC meeting, Trudy Mason asked MTA Business Service Center President Len DeSimone about why the Business Service Center was not moved into existing MTA space instead of to a brand new location. Bill Henderson spoke to Jeffrey Rosen, Director, MTA Real Estate, who said the short answer is that they didn’t have any such space to put them in. He said the need was for a large block of contiguous already-built-out space, the need for such space, driven by BSC’s potential for cost savings, was immediate and the request was made and filled in 2009, prior to MTA downsizing, at a time when the MTA had very little vacant space anywhere, let alone in one place. As it is, because the market was so weak at the time, the 34th Street location was very cheap at $25 per square foot, and they were able to negotiate for termination rights that will allow them to move the operation when and if it becomes cost-effective to do so.