Streetsblog New York City

Jay Walder may have exaggerated when he claimed this week to have put the city transit system “back on firm financial footing” during his stint as MTA chairman, but he did show remarkable reserve in not letting loose on Albany for undercutting rail and bus service at every turn. Unfortunately the media failed to fill in the blanks.

Speaking at a press conference in Hong Kong, where he just started his new job as chief executive of the privately-owned Mass Transit Railway Corporation, Walder said: “New York, when I arrived there, was in a financial crisis. The system simply did not have enough money to continue to operate. The assets were not being renewed. And the infrastructure was in terrible condition.”

Walder’s understated comments were picked up by the Times and the Wall Street Journal, among others, but nowhere have we seen anyone point out how little power the head of the MTA actually wields over agency funding. Nor did any reporter or editor take Walder’s cue to highlight years of Albany malfeasance.

To read the Times piece, for example, you’d think the MTA is an autonomous operation, free to conduct business without political interference. There is a passing reference to Governor Cuomo’s gutting of $320 million in annual payroll tax revenue, but no mention of last year’s $100 million Albany raid on dedicated MTA funds. Forgotten is how state senators used congestion pricing as a litmus test for Walder’s confirmation. With Albany unwilling to enact a new revenue stream via road pricing, it fell to Walder to cut spending.

Most glaringly, absent is an accounting of the decades of lawmaker thievery and neglect that preceded Walder and Cuomo, though those misdeeds more than anything will saddle transit riders for years to come, in the form of decreased service, fare hikes, or both. Other than raising fares or selling off assets, the chair of the MTA has very little revenue-raising clout. For whatever reason this factoid never seems to make the papers.

As for Walder, you get the distinct sense that there is no looking back.

“I think we have a very different situation here,” Walder said. “We have a first-class railway. We have a sustainable financial model that is supporting that railway. And I think the people of Hong Kong are benefiting tremendously from what we have.

“I don’t think it’s the same situation as what you have in New York.”

Any moment now, Governor Andrew Cuomo is expected to announce that Joe Lhota, the former budget director and deputy mayor for Rudy Giuliani, will be the next chairman of the MTA. There will be a press conference and press releases — a singular opportunity for Cuomo and Lhota to put forward their vision for the transit agency.

Top transit leaders are urging Lhota to use his first day in the spotlight to vocally make the case for a strong, well-funded transit authority. Ignore the advice to “do more with less,” wrote Gene Russianoff of the Straphangers Campaign in a pitch-perfect op-ed, urging the incoming MTA chair to advocate for new revenues in the form of congestion pricing. Richard Ravitch, the former MTA chair widely credited with saving the transit system in the early 1980s, said the new chair should push for bridge tolls.

Two years ago, Jay Walder arrived at the MTA emphasizing the importance of investing in the transit system. “We must have a long-term financial solution for the MTA,” Walder said when nominated, calling for a fully funded capital plan. “It’s critically important to have a capital program.” Today, the MTA’s fiscal situation is even more dire. But so far Cuomo has given no indication that he intends to address the problem, identifying no new revenues to invest in the maintenance and expansion of the system. As a result, the MTA is taking on billions of dollars in debt, which riders will be paying off for decades in the form of higher fares.

When he was nominated, Walder brought much more to the table than a call for new revenues. A highly-respected transit official with a long resume at Transport for London and New York City Transit, Walder came to the job with a clear plan to improve the system in cost-effective ways. The day he was nominated, Walder said he wanted to upgrade from the MetroCard payment system to cost-saving smart card technology. Soon after taking the reins, Walder had developed a full-fledged platform for his time at the helm of the MTA.

From day one, Walder made it a priority to improve bus service, install countdown clocks, and modernize the agency’s open data policies — all low-cost improvements to the system. In some cases he was building on programs set in motion by his predecessors, and in other cases (especially the open data initiative) he was charting a new course. The common thread: He identified what could be done quickly and made tangible progress on those initiatives, bringing a measure of credibility to an agency that’s often used as a punching bag by politicians and the local press.

What will Joe Lhota say on his first day? If nominated, he won’t bring the experience that transit professionals like Walder and Lee Sander relied on to advance cost-effective system improvements. Lhota’s resume shows a much more worrisome engagement with transit. While he served as Giuliani’s budget director and deputy mayor, city support for the MTA decreased significantly, according to a report by the Fiscal Policy Institute. While city contributions made up 14 percent of the 1992-1996 capital program, by the year 2000 the city was only paying for two percent of the capital program.

With Walder and Sander in the top spot, subway and bus riders benefited from four years of intelligent MTA governance aimed at improving their experience. Will Governor Cuomo and his MTA chief continue that record?

Jay Walder’s surprise resignation announcement last week overshadowed some important news about the MTA’s finances: The agency has identified $2 billion in savings in its capital program [PDF], which maintains and expands the transit system, but expects $1 billion less in federal assistance. That brings the total gap in the five-year, $26 billion capital plan to $9 billion that must be accounted for by the end of the year. This enormous deficit will define the political context in which Governor Andrew Cuomo chooses Walder’s replacement.

First the good news: The cuts do seem to trim fat, not muscle. The $2 billion in savings come largely from reduced construction costs due to the weak economy and more efficient operations. Though the cutbacks will include changes to how tracks and train cars are maintained, the transit agency says that riders should not be negatively affected.

The efficiency-finding is encouraging, but the bad news is that unless Albany fulfills its responsibility to fund transit, enormous fare hikes or spending cuts that will hurt riders are still looming.

The biggest savings, worth $800 million, come from reduced construction costs due to the weak economy. Another $150 million will come from reductions in administrative costs and payroll.

The savings also include 10 percent spending cuts on both transit vehicles and tracks. In the past, the MTA would use broken tracks as an opportunity to work on entire sections of the system; now, the agency will instead fix only the broken piece. That means more frequent but smaller repair jobs. The MTA will also eliminate replacement bus service during track outages where an alternate subway route is available (this change, at least, will affect riders).

The MTA intends to save another chunk by overhauling the way it buys trains and buses. By changing the design standards it puts out to vendors to better match how the MTA actually uses its vehicles, the theory goes, the MTA will be able to reduce maintenance costs.

“Our rolling stock initiative is less about extending the useful life of trains and buses,” explained an MTA spokesperson, “and more about being smarter about how we partner with suppliers and being smarter about how we review design specifications to ensure we’re not making cars too heavy or doing other things that cause other expenses down the road.”

“This $2 billion seems to be all about good management,” said Hope Cohen, the associate director of the Regional Plan Association’s Center for Urban Innovation, who said that these cuts likely won’t hurt riders. “Anything more significant or controversial will be coming later.”

The $2 billion in savings come on top of a previous $2 billion in cuts to the MTA’s current five-year capital program, proof that under Walder, the efficiencies to be found in the transit agency’s spending were being found.

Even assuming these savings materialize as promised, however, an enormous hole remains in the capital program. Albany funded only the first two years of the program after refusing to include bridge tolls in the 2009 MTA funding package.

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In his relatively brief time at the helm of the MTA, Jay Walder earned widespread plaudits for introducing technological innovations while guiding the agency through increasingly perilous financial straits. His departure comes at a critical moment for the transit agency. With a $9 billion deficit facing the MTA’s capital program at the end of this year, whoever replaces Walder will need political skill and technical expertise to spare transit riders another round of enormous fare hikes or service cuts. Even the most competent transit executive will have a hard time pulling it off, and leadership from the governor’s office and the state legislature will be absolutely necessary.

Walder had vowed to protect transit riders from higher fares and worse service. This March, he promised that both service cuts and fare hikes were “off the table,” and just yesterday, Walder pledged to cut the MTA’s capital budget “not by deferring vital projects but instead by finding better ways of delivering benefits.” Walder also promised the State Senate, when he was first confirmed, not to push for road pricing as a way to shore up the MTA’s precarious finances. Today, it is hard to see any possible scenario where some combination of fare hikes, service cuts, capital program cuts, and road pricing does not come into play in the near future.

With Walder’s departure, speculation immediately turns to whom Governor Andrew Cuomo will select as a replacement.

While both Walder and his predecessor, Lee Sander, are highly experienced transportation professionals, prior MTA chiefs were often politically connected businessmen allied with the governor. Kate Slevin, the executive director of the Tri-State Transportation Campaign, urged Cuomo to choose a “qualified professional who understands the transit system” to replace Walder. Given the timing of Walder’s resignation, she said — the capital plan runs dry at the end of the year exactly as TWU Local 100 contract expires — someone who can hit the ground running is particularly necessary.

“I hope the governor appoints somebody who is a devoted mass transit advocate,” said Jim Brennan, the chair of the Assembly Authorities committee. “The person is going to have to be an awfully good manager. The MTA is facing a lot of challenges.” Brennan praised Walder’s ability to manage the authority’s budget during two years of persistent and sizable shortfalls, saying he implemented policies which were difficult but necessary.

He called on Cuomo to appoint a worthy successor. “I hope the governor is willing to step up and be a partner in relation to supporting the mass transit system,” he said.

Walder’s resignation from the agency, effective October 21, came as a shock to staff at MTA headquarters, MTA board members, elected officials and transportation advocates alike. An anonymous source told the New York Times that Walder was not pushed out of his position, but rather felt that he could not refuse the job of running Hong Kong’s MTR Corporation. The Hong Kong job will be far more lucrative for Walder, according to the Wall Street Journal, and MTR’s finances are much healthier than the MTA’s.

The circumstances of Walder’s departure may be clearer after Cuomo makes his pick. If he goes with an experienced and respected transit professional, it will seem less likely that Walder was forced out.

Reactions to Walder’s departure have flooded in since his resignation was announced. With the exception of the TWU, they have been almost exclusively positive, focusing on accomplishments like the introduction of countdown clocks in the subways, real-time bus information, Select Bus Service, and gateless tolling on the Henry Hudson Bridge.

Here are the reactions so far:

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After a two-year tenure during which he earned the praise of transit advocates as a skilled and innovative leader, MTA Chair Jay Walder has announced that he will step down effective October 21. Walder, who was appointed by governor David Paterson in July 2009 and took the CEO position that October, will be taking the reins of the MTR Corporation, a Hong Kong-based rail company.

As MTA Chair, Walder brought a wealth of experience to the table, including six years at Transport for London and an earlier 12-year stint at the MTA in the 80s and 90s. His tenure as chair was marked by his response to the agency’s ever-tightening finances. At a time when huge debt loads and Albany transit raids placed big strains on the MTA’s budget, Walder was able to implement substantial efficiencies and bring innovative programs on line quickly, like the real-time bus information project known as BusTime. He also could not avoid enacting the biggest round of service cuts the NYC transit system has seen in a generation.

Walder will be departing at an eventful time for the agency. Its contract with the TWU Local 100 expires at the end of the year, and negotiations are expected to ramp up in the following months. The MTA recently announced $2 billion in cuts to its five-year capital program, which still leaves a $9 billion hole. Some combination of fare hikes, service cuts, and deteriorating conditions looms unless new revenue sources are secured or the MTA abandons mega-projects like the Second Avenue Subway.

There are not many people out there who can bring the same degree of experience and competence that Walder brought to the job. We’ll have more on Walder’s departure as the story develops.

Update: We’re hearing that staff at MTA HQ were taken by surprise by Walder’s departure, though Liz Benjamin tweets that Senator Marty Golden doesn’t believe he was pushed out by Governor Cuomo.

Erik Engquist at Crain’s has the good news. Governor Cuomo will keep two widely respected managers at the helm of the MTA and the Port Authority:

Jay Walder will be retained as MTA chairman and chief executive and Christopher Ward as executive director of the Port Authority, the source said. Both men have been informed that they will be staying on.

Get the full story over at Crain’s.

At a conference at Google's Chelsea office last night, MTA Chair Walder said all the right things about working collaboratively with software developers, confirming the agency's dramatic turnaround on open transit data.

After a longstanding policy of keeping a tight lid on route and schedule information, the MTA reversed course earlier this year and began opening data to developers. The new policy promises to improve the rider experience by putting better information at their fingertips. A closer working relationship between the MTA and developers should bring New Yorkers closer to the day when they can, for instance, find out when the next bus or train is coming by checking their phones.

Last night was a chance for both parties to get to know each other, although Walder was the one with something to prove, reassuring developers that the MTA's new position is for real. "If we can harness the power in this room, we’ll be a heck of a lot better than if we’re doing this ourselves," he said. "Getting information to people in a way that no longer treats our transit system as a black hole will be transformative."

One of the more interesting exchanges came when Nick Grossman of OpenPlans (Streetsblog's parent company) asked Walder about the MTA's wishlist from the developer community. Here's a rundown of the three most important ways Walder believes developers can help the MTA and improve the rider experience.

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After omitting bridge tolls from last spring's transit funding package, then raiding the "piggy bank" to the tune of $143 million, Albany's neglect of the MTA has left millions of transit-dependent New Yorkers in the lurch. Yet lawmakers have shown no inclination to get to work patching the agency's ever-widening budget hole, much less coming up with a viable long-term fiscal solution. Quite the opposite.

As once-planned "doomsday" service cuts expected to be approved this week were put back on the table, Senate Dems attempted to evade responsibility by deflecting and projecting. Said Fare Hike Four mastermind Carl Kruger, as quoted in the Observer:

"Our ability to budget is only as good as our ability to forecast. We were dependent upon data supplied by the Office of Management and Budget with the understanding that it was verified by the MTA's own fiscal staff. Furthermore, our projections were based on the fiscal year rather than the calendar year. This critical point should have been taken into account when the MTA fiscal staff developed its parameters."

Insisting that the new payroll tax will someday do the job, Senate spokesman Austin Shafran accused the MTA of employing scare tactics, while transportation committee chair Martin Malave Dilan lashed out at the new transit chief, then in his ninth week on the job. Again, from the Observer:

[Dilan] is angry that the M.T.A. didn't say anything about its sudden $343 million deficit sooner.

"It is an affront to our burgeoning partnership, often discussed in previous months, to exclude us from this critical information," Dilan wrote in a letter to M.T.A. CEO Jay Walder. "It appears, even under new leadership, that business will continue as usual with Gary Dellaverson assuming the addition[al] role of press secretary for the MTA. Instead of a cooperative exchange of thoughts and information, we may be left with an adversarial relationship played out in the press."

So, who's going to hold these pols to account? Probably not the Working Families Party, whose latest online petition amplifies the MTA-bashing of Kruger and company. The governor, meanwhile, looks to be sitting it out altogether as the engine of the region's economy is threatened with a massive breakdown.

Will any state legislator step up and show some leadership at this critical moment? Eric Schneiderman? Dan Squadron? Liz Krueger? John Sampson? Anyone?

"If I put train tracks down the street, you wouldn’t park your car on them. If I said this is a bus lane, somehow it becomes fair game. One person’s use of a road impacts upon another person’s use of the road. My point is, if we have to make a choice, make the choice for the bus, not for the car.”

-- MTA Chairman Jay Walder, quoted in the New York Times.

These are heartening words for transit advocates. Incoming MTA Chairman Jay Walder clearly wants to make big improvements to the agency's 250 bus routes. But given his time, budget and authority, there is a big gap between what he can do and what he would like to do for buses.

There are four basic ways to improve bus service: get passengers on and off faster, move buses faster, and provide more frequent and regular service. The improvements work together. Reductions in boarding and travel times mean buses can travel farther in less time, and so provide more service. After modest initial investments in new buses, lanes and technology, it is possible for bus operators to actually provide more service for less money. Another consideration is the relative merits of focusing on system-wide improvements, which improve all of the MTA’s 2.4 million daily trips, versus corridor-specific improvements, like Select Bus Service, which benefit a relatively small number of riders.

Let's look at the things that Walder and the MTA can realistically do for buses.

First up: contactless or “swipe less” MetroCards, like London's Oyster card, which are waved over a sensor instead of swiped. These contactless cards speed bus boarding and can save a lot of time over the course of a day. They also help reduce bus bunching by making loading times more consistent on every bus. Contactless cards are a mature technology which the MTA has already funded, and which Walder helped pioneer in London. So, there is every reason to think he can hurry its implementation.

Walder can also help with the long-delayed GPS bus locator system and real-time arrival information for passengers. These are also mature technologies which bus systems around the world use to reduce bunching, troubleshoot delays, and keep riders informed. To date, the MTA has bungled GPS tracking, and insisted on trying to solve the canyon effect caused by Manhattan skyscrapers instead of deploying GPS and passenger information on the huge majority of routes that don't go through Midtown, or even enter Manhattan. This is a highly visible and affordable improvement that Walder would get a lot of credit for.

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Discounting off-peak transit service could be a boon to New York City's transportation and quality of life, so long as revenues can be found to make up for the likely farebox shortfall.

MTA chief Jay Walder floated the idea of off-peak discounts in an interview in today's New York Times. While Walder didn't offer quantification, the Balanced Transportation Analyzer software model I've developed with Ted Kheel can estimate the effects of time-varied subway fares -- not just how ridership might shift from peak to off-peak periods, but indirect impacts such as the shift of auto trips to transit and the resulting changes to car travel speeds.

The results look promising for this prototype fare structure that I tested with the BTA:

• 1/3-off subway fare from 11:00 p.m. to 5:00 a.m.
• 1/6-off subway fare from 5:00 to 7:00 a.m., 10:00 a.m. to 4:00 p.m., and 7:00 to 11:00 p.m.
• 15 percent higher subway fare from 8:00 to 9:00 a.m. and 5:00 to 6:00 p.m. (Although Walder referred only to off-peak discounts, the model suggests that forestalling an increase in ridership during the two peak hours, when the system is strained beyond capacity, could require raising fares at those times.)
• No fare change during the "shoulder" hours of 7:00 to 8:00 a.m., 9:00 to 10:00 a.m., 4:00 to 5:00 p.m., and 6:00 to 7:00 p.m.
• 1/4-off subway fare at all hours on weekends and holidays.
• 1/4-off bus fare at all times (not mentioned by Walder but assumed here to preserve overall fare parity).

Here are the results:

• The average price of a subway ride drops by 23 percent, equivalent to a $210 annual savings for a typical straphanger who takes 12 trains a week.
  
• Notwithstanding the overall discount, however, peak-hour subway users who could not change their commute times would pay $100 a year more in fares.
  
• Annual savings of $230 for bus riders, due to the assumed 25 percent drop in bus fares.
• Subway usage increases 3 percent, even as morning and evening peak hour ridership drops by 1 percent and 3 percent, respectively, slightly easing crowding during those critical times.
  
• Bus usage increases 5 percent.
• 15,000 fewer cars enter the Manhattan CBD on weekdays, raising average speeds there by 2 percent.
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