MTA Leaders Hail Cost-Reduction  and Reform Initiatives

MTA Leaders Hail Cost-Reduction and Reform Initiatives

Photo Courtesy of Marc Hermann/MTA New York City Transit

“The MTA’s new leadership team will accept nothing less than large-scale, organizational reform,” said MTA Acting Chairman Fernando Ferrer.

By Forum Staff
Roughly 24 hours after Gov. Andrew Cuomo and Mayor Bill de Blasio jointly unveiled their 10-point plan to transform the Metropolitan Transportation Authority and create dedicated, sustained funding streams via congestion pricing, MTA leaders last Wednesday released their own series of steps toward reducing costs and reforming the embattled authority.
MTA Acting Chairman Fernando Ferrer acknowledged that the agency is under significant financial stress, facing massive gaps in both operating and capital budgets. Without cost reductions, in addition to congestion pricing and additional revenue from State and City partners, Ferrer said the MTA will be forced to make service and staff cuts, as well as substantially raise fares to help cover capital costs. Not enacting congestion pricing alone would require the MTA to raise fares by nearly 30 percent, the chairman noted. MTA leadership said last week that it was “committed to doing its part” to address the crisis with cost reduction measures, which, they pointed out, are in addition to the $2 billion in annual reoccurring savings the MTA has secured since 2010.
Ferrer has shared these cost-reducing, reform steps with the MTA Board:
• Each of the MTA’s operating agencies has submitted consolidation proposals within their agencies. In light of looming deficits, the agencies have been asked to identify $500 million in annually recurring savings. These are not merely “targets.” They are hard, institutional requirements, Ferrer noted.
• The MTA is applying the same scrutiny to vendors and contractors by reducing their hourly rates by 10 percent across the board, without cutting the scope of the work they do. This is expected to result in $75 million worth of savings.
• The MTA will be closely reviewing all current and upcoming consulting engagements, with the goal of working toward ending any relationship that is not absolutely necessary.
• The MTA will seek to consolidate back office functions. These include accounting, claims, communications, engineering, government relations, human resources, legal, marketing, planning and procurement. The MTA will also consider other, more expansive options at every level, Ferrer pledged.
• Board and key staff have begun implementing strategies to revolutionize the way procurements are handled, to increase competition and deliver projects more efficiently and effectively – better, faster, and cheaper.
• The MTA will work with the State, City and district attorneys to develop an enforcement strategy to combat fare evasions, which costs the agency approximately $215 million per year.
• MTA officials will continue to work, on an advisory basis, with academic experts and other outside innovators on large scale projects, following the successful efforts to avoid a complete L tunnel shutdown. All new major construction projects will be reviewed by construction and engineering experts who are not affiliated with the MTA or its consultants. The construction review team will be headed by the Deans of Cornell School of Engineering and Columbia School of Engineering to assure state of the art design and technology is being deployed.
“No more tinkering. No more nibbling around the edges,” Ferrer added. “The MTA’s new leadership team will accept nothing less than large-scale, organizational reform.”

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