WORKING IN THE DARK:

Citizens Budget Commission

October 20, 2009

IMPLEMENTATION OF THE METROPOLITANTRANSPORTATION AUTHORITY’S CAPITAL PLAN

Overview

• Importance of the capital plan

• Scope of CBC analysis

• Findings

• Recommendations

Why the MTA’s capital plan is important

• Mass transit is a capital intensive service

• Many categories of MTA’s capital assets are not in state of good repair

• Five-year capital plans are big and growing

Capital intensive service

• Value of MTA’s capital assets: $43.3 billion

• Annual depreciation: $1.8 billion

• Track length: 1,960 miles

• Rail cars: 8,500

• Stations: 712

System not in state of good repair

All of LIRR assets are in SOGR, except line structures (bridges, viaducts and tunnels); all asset categories are planned to be restored to SOGR in 2024.

Metro-North Railroad asset categories not in SOGR include: Grand Central Terminal, select line structures, Port Jervis Line infrastructure, and Shops and Yards.

NYC Transit SOGR Status

39%

57%

63%

66%

66%

68%

70%

79%

81%

87%

87%

96%

100%

100%

0% 20% 40% 60% 80% 100%

Subway Shops

Ventilation

Power

Tunnel LightingBus Shops and

DepotsStations

Communications

Structures

Signals

Pumps

Bus Fleet

Elevators/Escalators

Track/Switch

Subway Cars

All of LIRR assets are in SOGR, except line structures (bridges, viaducts and tunnels); all asset categories are planned to be restored to SOGR in 2024.

Metro-North Railroad asset categories not in SOGR include: Grand Central Terminal, select line structures, Port Jervis Line infrastructure, and Shops and Yards.

All of LIRR assets are in SOGR, except line structures (bridges, viaducts and tunnels); all asset categories are planned to be restored to SOGR in 2024.

Metro-North Railroad asset categories not in SOGR include: Grand Central Terminal, select line structures, Port Jervis Line infrastructure, and Shops and Yards.

Capital program big and growing

The MTA has authorized more than $77 billion in capital program commitments since 1982:

1982-1991: $15.5 billion1992-1999: $18.1 billion2000-2004: $21.4 billion2004-2009: $22.6 billion

Subotal: $77.5 billion

Proposed 2010-2014: $28.1 billion

Total: $105.6 billion

What we did:Scope of CBC analysis

• Examined capital projects scheduled by the MTA for work in the three-year period from January 2005 to December 2007

• This includes 798 projects with combined costs of $18.6 billion– 433 projects from the 2005-2009 plan costing

nearly $13.8 billion– 365 projects carried over from the 2000-2004

plan costing over $4.8 billion

Projects in CBC analysis

2005-2009 Plan 2000-2004 Plan Total

Element Category# of

Projects Commitments# of

Projects Commitments# of

Projects Commitments

CCC 2 $1,990.0 42 $2,669.2 44 $4,659.2

Rolling Stock 27 2,472.2 28 144.2 55 2,616.4

Track & Structures 92 2,534.1 41 27.4 133 2,561.5

Stations 102 1,771.7 103 161.3 205 1,933.0

Communications & Signals 39 1,675.1 31 49.0 70 1,724.1

Interagency 14 629.1 29 1,065.5 43 1,694.6

Shops and Yards 44 1,432.5 30 243.6 74 1,676.1

Miscellaneous 65 595.1 43 32.1 108 627.2

Power 41 577.2 10 30.3 51 607.5

Bus Company 0 0.0 4 406.4 4 406.4

Staten Island Railway 7 79.6 4 2.9 11 82.5

Total 433 $13,756.6 365 $4,831.9 798 $18,588.5

Commitments Planned for 2005-2007($ in thousands)

Questions we asked

1. Were these projects started on time?

2. Did the planned work progress in accord with the initial schedule?

3. Did the projects stay within the initial budget?

Finding #1

The MTA does not provide the public, or even collect for itself, sufficient information to determine whether the projects in the five-year plan are progressing in accord with the plan.

Public information available• The five-year capital plan and its amendments

The plan is amended periodically to reflect the addition or elimination of specific projects, changes in cost estimates for specific projects, and changes in the anticipated start dates for specific projects.

• The four-year financial plansThe “rolling” plan is revised and reviewed by the MTA Board three times each year – in February, July and November.

• Briefing material for the Capital Program Oversight Committee (CPOC)

• The CPOC meets monthly (except in August), and focuses on a different component of the capital plan at each meeting.

• The briefing material that the MTA staff provides to the CPOC contains an overview of the status of the capital plan and more detailed information on the components of the plan under review at that meeting, including reports by an Independent Engineering Consultant (IEC) engaged by the MTA to provide an independent review of project progress.

Shortcomings of fragmented information

1. Not all the information is readily available to the public.• Financial plans and the latest amendment to the capital plan are

available on the MTA website;• The CPOC material is distributed to Committee members and relatively

few other interested parties, but is not available on the MTA website.

2. The information is incomplete and inconsistent.• Information is not provided for all projects in the initial five-year capital

plan;• Project identification and definition is not consistent among the reports.

3. The information is inadequate to provide a complete picture of the status of projects relative to objectives in the initial plan and interim milestones.• Projects are not assigned significant milestones other than a

commitment date and a completion date; • Delays in these milestones are not tracked relative to initial goals.

An example: “Missing” stations

• The 2005 capital plan amendments called for work on 88 stations in the 2005-2007 period

• The 2007 amendments dropped two of those stations and added 16, leaving a net total 102 stations scheduled for rehabilitation and other improvements in the 2005-2007 period

• CPOC reports indicate that work was being done on 73 stations in the 2005-2007 period, five of which do not appear to be listed in the capital plan

• This suggests that 34 stations which should have work performed are not part of the public reports

Finding #2

The limited information available for the projects indicates the MTA encounters significant delays in work of all types with major problems in the mega-projects and signal and communication projects, but notable delays also in less complex work such as the replacement of subway cars.

The MTA has difficulty “committing” authorized funds

$15.1$19.5

$5.1

$4.8

$0.0

$5.0

$10.0

$15.0

$20.0

$25.0

2000-2004 Plan 2005-2009 Plan

$ b

illio

n

Authorized but not commitedCommited at end of period

Note: Amount committed at the end of the 2005-2009 period is a projection based on the assumption that the agency will make commitments in the last four months of the year at the average monthly rate that was observed during the first eight months.

Four of the five mega-projects have experienced significant delays

• South Ferry Terminal is the only exception – The initial completion date was April 2009 and the project went into service on March 16, 2009, although full completion of the contract work is not expected until at least December 2009.

• Fulton Street Transit Center has been delayed the most – The project has required extensive redesign and currently has an estimated completion date in 2014, five years behind schedule.

• Second Avenue Subway, East Side Access, and Flushing Line (#7) Extension are each delayed by at least a year.

Subway stations have mixed record

Selected MTA Subway Station projects with significant delays in completion dates

Award MonthsDate Initial Latest Late

Single StationsCompletedWest 8th St. & Neptune Stations (Q/B,F) May-02 Oct-04 Dec-05 (14)Myrtle/Wyckoff Station Complex (M/L lines) Dec-03 Sep-07 Feb-08 (5)Chambers St. (1,2,3 line) Sep-06 Jun-08 Apr-09 (10)

In Construction96th St. (1,2,3 line) May-07 Jun-08 Sep-10 (27)59th St./Columbus Circle Dec-05 Jun-09 Mar-10 (9)

In DesignEast 180th St. (WPR line) Dec-03 Sep-08 Sep-09 (12)

Completion Date

Signals and Communications

• Automatic Train Supervision System (A Division) – completed in September 2008, more than three years behind plan.

• Communications Based Train Control (L line) – completed in December 2004, two years late.

• SONET cables (A Division) – substantial completion was expected in July 2009, more than five years later than planned.

• Public Address and Customer Information Service (PA/CIS) (L line) – substantial completion was reported in December 2007, more than two years later than planned.

• PA/CIS (156 stations on A Division) – initial completion scheduled for September 2006; currently projected in December 2010, more than four years behind schedule.

Finding #3

Many projects are completed close to initial cost estimates, but cost estimates are problematic for some mega-projects and some important signal and communication projects are seriously over budget.

Mega-projects

• East Side Access – Estimated costs increased 14 percent as of early 2009.

• Second Avenue Subway – Estimated cost for the work in the first phase of the project increased 13 percent.

• #7 Line Extension – Estimated cost increased 6 percent between early 2005 and 2008, and the scope of the project has been reduced to scale back plans for the Tenth Avenue station.

• Fulton Street Transit Center – The most recent cost estimate of $1.4 billion is nearly double the original estimate.

• South Ferry Terminal - Estimated cost increased 24 percent.

Signals and Communications

• ATS (A Division) – Cost escalation of about 35 percent.• CBTC (L line) – The last two phases of the Canarsie line

project increased 51 percent.• CBTC (#7 line) – The estimated cost for the still to be

initiated Flushing line project has increased 71 percent.• SONET (A Division) – Cost 41 percent more than the

initial contract award amounts.• PA/CIS (L line) – Cost more than 50 percent more than

the contract award amount.• PA/CIS (156 stations on A Division) – Reported to be

15 percent above the initial award amount, but the IEC projects even greater cost escalation.

Recommendations

1. The MTA should commit to an improved management information system for tracking capital projects and to greater transparency in informing the public about the status of its capital projects.

2. The MTA should improve its capacity to manage mega-projects and improvements in signaling and communications systems.

3. The next five-year plan should be based on a realistic assessment of what can be accomplished.