NEW YORK—The Port Authority of New York and New Jersey has begun to move forward over the last year after being labeled “a challenged and dysfunctional organization suffering from a lack of consistent leadership,” according to independent consultant reports released Wednesday.
New York Gov. Andrew Cuomo and New Jersey Gov. Chris Christie control the regional entity, which has a hand in a bevy of transportation and infrastructure systems and projects in the New York metropolitan area.
After the Port Authority proposed toll and fare increases in 2011 on its PATH system, a trans-Hudson subway system serving New Jersey and New York, and the six bridges and tunnels it controls, including the Lincoln Tunnel and the George Washington Bridge, the governors ordered a comprehensive review and audit of the agency.
The label of dysfunction came from an independent firm, Navigant, in its preliminary review, which preceded two reports.
The second, along with another independent report, was released Wednesday.
“Over the next three years, the Port Authority must implement the scheduled annual toll
increases at the bridges and tunnels to ensure adequate funding” of capital projects and other initiatives, states the Navigant report.
Prior to the toll hikes, EZpass and cash tolls during peak travel times were $8, while off-peak EZpass was $6. In September last year, cash tolls jumped to $12 and Ezpass tolls rose by $1.50. Planned toll increases of $1 through 2015 would make cash tolls $15 as of December 2015, with planned EZpass toll increases of $0.75, making EZpass tolls $10.50 (off-peak) and $12.50 (peak). Truck tolls will rise more sharply.
The first toll increase will produce an estimated $383 million in the 2012 budget, making toll and fare revenue $1.5 billion.
“It’s important for everyone to understand that every dollar of our toll and fare revenue goes toward our interstate transportation network, and even with the toll increase, the transportation network will operate at a negative cash flow,” said Port Authority Chairman David Samson on a conference call with reporters Wednesday.
Footing the WTC Bill
But some say the hikes are too drastic and the added revenue appears to be going toward the World Trade Center (WTC) rebuilding. The Port Authority has spent more than $5 billion on the WTC site since 2009, with a little more than $2 billion—or more than half of its projected 2012 capital spending—planned for the site rebuilding.
“With the tolls, the number one source of revenue for the Port Authority, we find it inconceivable that they cannot be using any of that money for the World Trade Center,” said Robert Sinclair, spokesman for AAA New York, an automobile advocacy organization.
AAA New York and AAA New Jersey filed a lawsuit last year, asserting the fare hikes violate federal law since money garnered from such hikes can only be used for transportation-related facilities.
The WTC, apart from the PATH station and some adjacent infrastructure, is not a transportation facility, said Sinclair. He and staff from both chapters of the association spoke to press outside of Tian Restaurant at Riverbank State Park. Behind them, in the distance, vehicles crossed the George Washington Bridge.
The lawsuit is currently pending in federal court. AAA and New Jersey Sen. Frank Lautenberg have accused the Port Authority of “stonewalling,” or withholding information about where the toll hike money goes.
“I am very disappointed that the Port Authority continues to operate behind a veil of secrecy,” said Lautenberg in a statement, after questioning Port Authority Deputy Executive Director Bill Baroni in an April subcommittee hearing.
But the authority has been making progress, beginning to restructure its entire operations and already realizing savings from different initiatives, said top management Wednesday.
The WTC site is an example, said Chairman Samson in the conference call. A new emphasis on collecting reimbursement from third parties for the project has been underway, so “we can complete the project in a fiscally responsible and disciplined manner.”
The authority, according to estimates in the Navigant report, will spend $14.79 billion—with a notable increase of more than $3 billion in November 2008—but will receive almost half, or $7.4 billion, back in reimbursements, including more than $5 billion combined from insurance proceeds and federal government grants.The recent agreement to move construction forward on the 9/11 Museum was noted by management as an example of settled reimbursements; the agreement included $7 million of Port Authority contingency waived and a $10 million reimbursement for design.
Governors Cuomo and Christie released a joint statement saying, “Today’s conclusions by two independent reviews show that the Port Authority is finally on the right track, and the necessary reforms put into place by the agency’s leadership are beginning to deliver results, just as we demanded.”
Port Authority management are looking into a number of opportunities for investment into infrastructure besides toll and fare revenue, including obtaining private financing for projects, and cost-cutting actions such as giving its employees fewer benefits.
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