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OP-ED MTA needs to boost efficiency to close deficit

BY ANDREW REIN

Amid concerns about safety, service and ridership, the Metropolitan Transportation Authority has a huge structural operating budget deficit. Its recurring annual expenses are at least $2.5 billion more than its revenues. Federal Covid aid that has filled this gap temporarily will soon run dry.

Though much discussion focuses on lower ridership depressing fare revenue, recall that the MTA had a prepandemic structural deficit of roughly $750 million, which was widened by eliminating the 2021 subway fare increase. The MTA is not merely a victim of circumstance; its structural deficit also is due to its

high costs, partly from operating differently than other transit systems.

The MTA also needs more than $35 billion in capital investment in the next few years just to bring its tracks, cars and signals up to, and keep them in, a state of good repair. Absent these investments, service will start to break down.

This eye-popping amount does not even include the many wishedfor service expansions, or the tens of billions of additional dollars for state-of-good-repair work likely to be included in the 2025-29 capital plan.

Some good news

The good news is that solutions that do not sacrifice service or compromise competitiveness exist. Increasing efficiency should be a significant portion of the MTA’s gap-closing actions. The MTA budget includes a $100 million efficiency plan, which would close just 4% of its gap. Much more is needed. The Citizens Budget Commission identified billions of dollars in potential savings from adopting operating strategies common to other public transit systems and aligning costs with industry benchmarks. Nearly all other subways use one-person train operation, and commuter trains use conductor spot checks rather than checking every ticket. Also, national data shows that the productivity of New York City Transit subway facility maintenance work is 44% lower than the national median.

Implementing structural changes such as these are not easy and will require a multiyear, all-hands-contributing approach. The efficiency

push should start as soon as possible, with changes that can be achieved by actions of the MTA’s leadership alone. But the greatest savings are possible only with changes to labor contracts. The MTA’s leadership and labor unions should work together, using the collective wisdom of management and workers, to identify and phase in efficiency reforms. These could narrow the structural gap, support raises workers deserve, likely involve gainsharing, and preserve services critical to New Yorkers’ livelihoods and quality of life. THERE IS No mAGIC The MTA is smartly considering using federal aid to moNeY Tree THAT GROWS reduce its recurring debt service costs, but that accelerates the fiscal reSoUrCeS cliff to next year. Most of the discussion on closing the structural gap has focused on getting more money from taxpayers. There is no magic money tree that grows resources free of consequences. New revenues or subsidies should be sought only with great care to identify trade-offs and impacts.

State of good repair

The MTA’s strength also depends on making significant capital investments to bring and keep its current assets in a state of good repair. Congestion pricing remains critical. It should be implemented expeditiously, and revenues should not be diverted to narrow the operating budget gap.

Our research found that the MTA’s recent success at increasing the capital contracting and delivery speed still will leave more than $25 billion in planned projects outstanding at the end of 2024. To ensure the system functions reliably, the MTA should keep laser-focused on increasing its capital project throughput, use techniques such as Fastrack closures to facilitate repairs and upgrades, and prioritize the state of good repair before expansion projects.

Ensuring a strong future for the MTA relies on all New Yorkers: its employees; riders, who should pay reasonable fares that increase with costs; drivers, who pay tolls, including congestion pricing; taxpayers, who already support the system; and elected officials willing to make the hard choices for our future. ■

Andrew Rein is president of the Citizens Budget Commission.

OP-ED New Yorkers need to be sold on New York

BY ELLIS VERDI

It started with Covid. But now that the streets are dirtier, hate crimes are rising, the rat population is booming, and subway crime is spiking, New Yorkers are at a crossroads—and many are taking the one that leads out of town.

Last year the city’s population dropped by more than 300,000— the equivalent of Harlem and Washington Heights clearing out completely.

One New Yorker leaving the city means two fewer subway rides a day, one less cup of coffee bought at the corner, one less lunch at the deli

and one less desk at the office, to name just a few of the trickle-down effects. So as the winter months near, we’re bound to see even greater numbers leave us for Florida or other locales.

Yes, we need safer streets, affordable housing and all the other things that are promised during political campaigns, but something needs to be done right now to stanch this exodus. Something that points out to New Yorkers why they’re here in the first place.

New Yorkers need to be sold on New York.

A new message

Nearly 50 years ago, the state’s famed “I Love NY” campaign showcased the beauty and allure of the state (and city) to those without a New York accent. It worked. And today, the city needs its own ads, banners, social media posts, digital reminders and everything else in the marketing quiver to target those living here with a message that they’re here because of shared values. They’re here because New York’s rough edges sharpen their life’s experiences. They’re here because the fabric of the city is woven from so many diverse, defiant and determined threads. And nothing can convey this more effectively than a smart, creative effort that truly reminds New Yorkers why they love this city and why they belong here.

As a New York ad man for 30 years working for quintessential New York clients, I agree with the research that shows what values New Yorkers cherish most about the city: inclusion, tolerance, diversity, “straight talk,” authentic neighborhoods and a toughness that, ironically, encourages civility. These are the values that connect New Yorkers to New York. This certainly isn’t St. Louis, and Los Angeles doesn’t come close. New Yorkers need to be reminded where, exactly, they live. Maybe it’s an ad that conveys a reassuring feeling that your neighbors don’t love AK-47s, or that gay marriage, marijuana and abortion are legal “A PERSON LEAVING IS TWO here, or quite simply point out how no other city in the world comes FEWER SUbWAY rIDeS, ONE close to the cosmopolitan makeup of this town. LESS CUP oF CoFFee.”

Looking for answers

The city faces an existential crisis in losing people, businesses and a bit of the mystique that has made it so appealing. So as the Adams administration sets out to change the perception that the city isn’t headed back to the 1970s, work must be done today to provide those answers when people start to question why they live here. A visible campaign will provide the air cover for the administration as it attacks the real causes of concern. I’m not suggesting this be another city-financed effort; it demands the involvement of businesses to step up and champion this city with “I Love NY 2.0.”

Battling this abandonment requires selling New Yorkers on the truth about the city—the real reasons that connect them to New York. The city attracts a certain spirit, one drawn to a way of life that is becoming increasingly threatened outside these five boroughs. And without a creative effort to stem this diaspora of New Yorkers, we’ll be hurtling back to the bad old days of the ’70s in a New York minute. ■

Ellis Verdi is president of DeVitoVerdi, an ad agency based in the city.

ENERGY / UTILITIES

Filco Carting

Longtime waste management entrepreneur and founder of Recycle Track Systems(RTS), Adam Pasquale, will join Filco Carting as Executive Vice President, Strategy and Corporate Development, working directly with Filco’s CEO, Domenic Monopoli. As part of his responsibilities with Filco, Pasquale will partner with Monopoli to further advance Filco’s commitment to a Zero Waste future. Pasquale and Monopoli will partner to expand Filco’s scalable and sustainable solutions for customers and communities.

HEALTH CARE LAW

Tarter Krinsky & Drogin

Tarter Krinsky & Drogin’s Sean T. Scuderi has been elevated to Vice Chair of the Construction Practice. Scuderi will expand his responsibilities in this new role to focus on departmental delivery of client service, practice management, strategic planning, communications, staf ng, and overall practice group performance. Scuderi represents clients through every phase of the design and construction process from negotiating construction agreements to handling complex disputes.

UnitedHealthcare

UnitedHealthcare has named Junior Harewood as CEO, UnitedHealthcare of New York, Employer and Individual plans. An employee of UnitedHealthcare for 25 years, Junior’s expertise in commercial bene ts, along with the relationships he’s built throughout his tenure, will be an asset to the New York Health Plan as it continues to provide its customers and members with affordable, innovative, and quality healthcare plans. Junior is a native Long Islander with an Executive MBA from UGA.

Foley Hoag

Foley Hoag LLP announced that legal industry veteran

Diane Schef er

has joined the rm as Chief Operating Of cer. Schef er has more than 30 years of experience in law rm management and consulting. She previously held top Finance and Operations roles at several AmLaw 200 rms. She earned a B.S. degree in Economics from the Wharton School of Business, University of Pennsylvania and an M.B.A. degree in Finance from the Stern School of Business, New York University.

LAW

Vinson & Elkins LLP Patricia Adams

and Joo Hyun Lee have joined Vinson & Elkins in New York as partners in the Executive Compensation practice. The duo advise clients on a wide range of compensation and employee bene ts arrangements, particularly with regard to issues arising in private equity, M&A, securities offerings and restructuring matters. Patricia previously advised on transactions including Blackstone in its acquisitions of Clarus and Harvest Funds, and KKR in its acquisitions of PetVet Care Centers and Heartland Dental. Joo’s previous client work includes advising one of the largest independent ber infrastructure bandwidth companies in its acquisition of a telecom service provider, and a major REIT in its acquisition of a luxury hotel/casino.

Adams Lee

ANNOUNCE YOUR BIG NEWS

REAL ESTATE

Paramount Vista National Land Services LLC

Paramount Vista National Land Services LLC, a full-service, minorityowned title insurance agency, is pleased to welcome Dennis Ju as its Executive Vice President of Sales. A seasoned professional with 20 years of experience, Mr. Ju will oversee revenue operations and provide industry insights and innovative solutions to clients. As a member of the leadership team, he will play a key role in helping to execute short and long term growth strategies and work on making inroads in new markets.

TRANSPORTATION

New York & Atlantic Railway

New York & Atlantic Railway has named John Gleeson as Director of Sales and Marketing. Gleeson comes to NYA with 20 years of experience on the customer side of the railroad industry. Most recently he developed rail facilities at Arizona Beverages USA. Previously, Gleeson managed tank-car eets for Illinois-based Old World Industries and later supervised transportation services for railcar lessor GATX Corp. A native of Chicago, Gleeson has a B.A. in communication from Loyola University, Chicago.

INDUSTRY ACHIEVERS ADVANCING THEIR CAREERS

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COMPANIES ON THE MOVE To place your listing, visit www.newyorkbusiness.com/companymoves or contact Debora Stein at917.226.5470 / dstein@crain.com

MERGERS / ACQUISITIONS

EisnerAmper

New York, NY 212.949.8700 eisneramper.com The Hoffman Group has joined global business advisory rm EisnerAmper. Founded in 2017, and based in Baltimore, The Hoffman Group is a full-service accounting and business consulting rm that serves industries such as construction, manufacturing, wholesale distribution, government contracting, technology and real estate. The Hoffman Group gives EisnerAmper a key presence in the all-important Maryland-Washington-Virginia corridor.

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