Is the MTA due for a restructuring?
Is the MTA due for a restructuring?
By all indications, New York’s beleaguered central transportation agency is headed for a revamp. What that revamp will look like, however, is an ongoing debate.
The Metropolitan Transportation Authority – the subject of subway riders’ ire and budget analysts’ exasperation – could become a slimmed down version of itself if new restructuring recommendations from consulting firm AlixPartners are accepted by the MTA board.
The MTA released its full transformation plan on Wednesday, in which AlixPartners makes several main recommendations, including consolidating more than 40 functional groups across the MTA’s agencies into six main departments, and having agency heads like New York City Transit President Andy Byford focus on safety, day-to-day operations and maintenance, with capital projects consolidated into a new central group. The plan could also eliminate up to 2,700 jobs, some through layoffs, with estimated annual savings between $370 million and $530 million.
Already, the plans have drawn criticism from transit advocates who say that the recommendations will take power away from Byford – which MTA Chairman Pat Foye denies – and complaining that the process isn’t public enough. Gov. Andrew Cuomo has also asked to see performance metrics and deadlines for the reorganization. Still, the central question remains: Are these recommendations on the right track for a new and improved MTA?
To weigh in on that question and more, we reached out to Jonathan English, a doctoral candidate in urban planning at Columbia University; Reinvent Albany senior research analyst Rachael Fauss; Nicole Gelinas, a policy journalist and senior fellow at the Manhattan Institute; and Ben Kabak, editor of the transit blog Second Ave. Sagas.
Responses have been edited for length and clarity.
What’s your response to the recommendations?
Ben Kabak: After much anticipation and build-up, the AlixPartners’ MTA Transformation Report landed with a bit of a whimper rather than a bang. Instead of tackling big issues – commuter rail inefficiencies and operational streamlining, procurement reform and cost containment – the preliminary report focused largely on centralizing invisible back-office functions, a task that hasn’t worked out well for the MTA in the past, and questionable proposals for reducing the powers of agency heads. It also includes a series of recommendations urging the MTA to focus on accessibility, communications and safety – in other words, tasks on which the MTA has already been focused in recent months – while urging an already top-heavy organization to add a handful of new executive positions reporting directly to the CEO (and in effect, directly to Gov. Andrew Cuomo, the one state official who controls the MTA CEO). At best, this is shuffling deck chairs on the Titanic, and at worst, it’s another political power grab by Cuomo, who wants to run the MTA as a fiefdom rather than as an effective transit agency.
A few elements of the report concerned me. As part of transformation, AlixPartners suggested centralizing operating support functions, such as standards and service design. Thus, the agency heads who are in charge of service delivery and operations would not have oversight over the design of the service they are supposed to deliver. This doesn’t appear to be based on any international best practices and, in fact, runs counter to streamlining transit operations.
Finally, I was dismayed to see the report recommend that all construction-related work should be centralized under Capital Construction. Now, Capital Construction, the agency with the worst record with respect to budgeting and on-time delivery, will have more of a say in all construction. This would, in effect, remove the execution of Andy Byford’s Fast Forward plan from Transit and from Byford’s purview and place it under the Capital Construction umbrella. Again, this isn’t transformation as much as it is a political power play.
Rachael Fauss: The AlixPartners recommendations would create disorganization and confusion at the MTA, rather than clarify accountability. For the first time, a staff member – the director of transformation – would be appointed directly by the MTA board to implement the reorganization plan. The plan also proposes having a managing director/chief operations office report to the board, if it so chooses. The board cannot hire/fire the CEO or any other staff. Yet the person ultimately responsible for the MTA's reorganization is Gov. Andrew Cuomo, who has continually cast blame on the board and agency staff despite the fact that he controls both. These recommendations obfuscate the governor's role in demanding the MTA reorganize itself. They also fail to address the governor's meddling with MTA professional staff.
It is our understanding that the MTA board will be voting on this plan with an up-or-down vote next week. Despite past claims from MTA leadership that there will be opportunity for more public input and revisions based on additional “reviews” from AlixPartners that are due July 31, the MTA board is highly unlikely to change its votes on the major substance of this report, so this appears to be the plan that we'll all be stuck with.
Jonathan English: Since the MTA was created over 50 years ago, there has long been a belief that getting the organizational structure right is key to fixing the agency’s operational problems on the ground. The problem is that no organizational structure is a panacea. Eliminating silos, as this plan proposes, is certainly an admirable goal, but this brief and vague plan opens the door to creating new, potentially equally troublesome silos. For example, while it proposes to consolidate separate human resources, legal, and communications departments at the separate agencies, which is probably not likely to cause too many issues, the consolidation of engineering and construction will separate those roles from day-to-day operations and maintenance, which will remain with the individual agencies. Dividing these responsibilities is likely easier said than done. Who handles a several-month-long track reconstruction or tunnel rehabilitation? Certainly that fits into the engineering and construction realm, but it also needs to be closely coordinated with day-to-day maintenance and operations. Furthermore, the workers performing the two jobs may well be one and the same. The same is true for the rehabilitation of vehicles – that is likely done at the same facilities by the same workers as some of the regular maintenance of those vehicles. Operating these two functions in separate segments of the MTA, necessitating negotiations between them for each project, may create more problems of coordination than it solves. An intimate understanding of operations is essential to properly design and implement a major rehabilitation project. Consolidation is also no guarantee of cost savings. Though the MTA consolidated capital construction into a centralized department years ago, its construction costs remain the highest in the world. The review also recommends studying the separation of bus and subway operations. This would be a mistake, as the city needs more and better coordination between those two modes, not less.
Nicole Gelinas: One big change from the early version is that we now have a firm number on cost savings: $370 to $530 million a year. The MTA must update its budget before the end of July. Since the document says the MTA expects to implement the “majority” of this plan in six to nine months – an ambitious undertaking – these figures likely will allow the MTA to significantly pare back its projected deficits, which reach nearly $1 billion annually by 2022, in the July budget update.
Several of the recommendations to achieve these savings while improving performance are sound, if not particularly revolutionary: merging three separate bus divisions into one operation, for example, and furthering consolidating the back-office functions the MTA continues to separate across different operating units.
Merging bus operations may be more complex than the consultants expect, as it involves the transfer of city subsidies to bus lines for which the city once held responsibility. It is not clear how much the city should save in projected MTA consolidation in terms of its level of the subsidy it currently provides to the MTA.
One potential change – the document only promises a review on this point – is worrisome: separating the bus system from the subway system. As the MTA embarks upon its Fast Forward plan to modernize signals on subway lines, the MTA likely will need to coordinate replacement bus service for individual subway lines so that it can shut down lines to do its signal work as safely and quickly as possible. It will be more difficult to achieve such coordination if two separate divisions run subways and buses.
The creation of a new transformation officer reporting directly to the board, as well as the possibility of the newly created chief operating officer reporting to the board, though, as opposed to reporting to the chairperson, illustrates Gov. Andrew Cuomo’s strategy of not wanting any one person to have full autonomy or leverage over the organization.
What do these recommendations mean for Andy Byford?
Rachael Fauss: Nothing good for Byford or New York City Transit: Our best guess is that this Cuomo disorganization plan could derail Byford's successful Fast Forward plan. Under the proposal, New York City Transit's engineering experts – the people who actually know about signals, trains, tracks – would be centralized to MTA HQ and taken away from coordinating with the staff who do the day-to-day work of keeping the system running. Under the guise of "efficiencies," the plan says it will centralize management, but it will instead create confusion and fragmentation by having some executives report to the CEO and some to the board. By centralizing capital projects, engineering and procurement, while limiting agencies to operations, new silos are being created. We think in practice this will allow the governor to more easily directly intervene in vanity projects, like the Belmont LIRR station and the LaGuardia AirTrain. In other words, why should the people who fix and maintain signals be separated from people who buy and install them?
Nicole Gelinas: That depends. Byford, the subway and bus chief, will continue to report to the chairperson and CEO, but he’ll also report directly to the new chief operating officer, who may or may not report directly to the MTA board. Nothing in the document prevents Byford from spearheading the Fast Forward plan to modernize subway signals on an aggressive nine-year time frame, one of his key goals. This project could theoretically fall under “safety,” for which Byford will retain responsibility. But nothing directly guarantees that he will retain this responsibility; the MTA could just as easily determine that Fast Forward falls under a new centralized construction division, for which Byford won’t have responsibility. AlixPartners has left this matter up to political and MTA discretion. A possible separation of bus and subway divisions would reduce Byford’s scope of management, as improving bus service is another of his key goals.
Ben Kabak: For now, these recommendations are just that: recommendations that the board will have to approve. It is now up to the board to determine which, if any, they will accept. Now, Gov. Andrew Cuomo is putting a lot of pressure on the MTA board to accept the recommendations, and since he is in charge of the MTA and effectively runs the board, he’s likely to get his way. Thus, it’s likely these recommendations will become a reality, and at that point, we will have to see how it affects Byford and his work to fix the subways.
MTA sources have told me they expect Byford to retain a significant voice, if not control, over the key pieces of Fast Forward, including signal modernization, but on its face, the report does not contemplate this outcome one way or another. It could read as a move to sideline Byford, and if so, that would be a mistake. Byford is a highly competent and thoughtful leader who has been successfully implementing a plan to fix the subways. The governor should find a way to support, rather than undermine, Byford while funding and boosting Fast Forward. The AlixPartners report is instead a step backwards by the governor and highlights his inability to defer to experts when those experts are rightly praised for a job well done.
Jonathan English: The report proposes to create several new senior executive roles, including: chief operating officer, which would supervise the heads of agencies and day-to-day operations, chief engineering officer, which would supervise long-term construction projects and major maintenance, and chief transformation officer, responsible for implementing the organizational restructuring. If Andy Byford were to remain simply the head of the NYCTA, now reporting to the COO and stripped of his role in the long-term construction and engineering of projects relating to the subway and buses, there is no question that it would be a significant demotion and he would no longer be using many of the skills and expertise that he brings to the role. Byford has done much work developing the Fast Forward plan for rehabilitating the subway, and he is best suited to deliver it. It is not clear that creating another layer between the CEO and the actual operations of the transit system will improve efficiency.
What, if anything, should the MTA be doing differently?
Nicole Gelinas: The new document remains vague on the MTA’s future approach to labor unions and labor agreements, saying only that “the MTA will need to negotiate changes” with unions. A stronger document would have assigned a specific cost-savings goal to the current round of collective-bargaining negotiations between the MTA and its subway, bus, and commuter-rail unions.
Jonathan English: While the MTA was created to develop an integrated regional transportation network, it has made limited strides toward that goal. A unified fare payment system, fare structure, planning, scheduling, and customer information system for all of the MTA agencies is a worthy aspiration. Riders should be able to use the same fare medium to ride the subway, LIRR and Metro-North, and the transfer penalty between them should not be as punitive as it is today. From a rider's standpoint, the distinction between agencies should be blurred as much as possible, since riders shouldn’t have to worry about which department is operating their trip. A genuine, unified long-term plan for the MTA’s agencies, encompassing both rehabilitation and expansion, is also something that has been missing for a long time. At the day-to-day level, however, it is not clear to me that segregating major rehabilitation work from day-to-day maintenance is the best way to resolve the serious backlog of deferred maintenance and the outdated technologies that plague the MTA’s operations.
Rachael Fauss: Reinvent Albany in May 2019 released our mega-report on the MTA, Open MTA, which includes 50 recommendations to renew public trust in the MTA. These can be implemented by the MTA without any changes in its power structures, and without a reorganization plan. They include robust transparency initiatives like overhauling the MTA’s Freedom of Information Law and Open Data processes, using best practices from other jurisdictions. The report addresses conflicts of interest at the MTA, to make sure that the public interest is being followed by the MTA board and management. It also includes recommendations to improve oversight by the state Legislature, such as holding more hearings, having more robust oversight from the state comptroller, and giving more resources to the Authorities Budget Office, which oversees all of the state’s public authorities. Lastly, it calls for ending the governor's Emergency Order 168, which was put in place two years ago, so that anti-corruption and environmental safeguards to MTA procurement can be restored.
Ben Kabak: This is a tough and loaded question. The MTA should be running more trains at faster speeds while working aggressively to reform construction practices and updated its antiquated signal system. But that’s the default answer to anything. With respect specifically to transformation, the MTA should take a thoughtful and considerate approach to understanding its cost and construction crisis. Why do projects cost orders of magnitude more in New York City than in other developed countries with equally tough labor and environmental laws? Why are projects routinely late and over budget? Why do seemingly simple pieces such as escalators and elevators keep breaking down?
These are the true transformational questions, not the findings of a slapdash report thrown together in three months with obvious political undertones. These are also tough questions that require a strong leader to push through, and now would be a great time for Andrew Cuomo to take a step back from perceiving political slights everywhere and instead focus on real transformation. The MTA, and New York City, would benefit tremendously from it. The AlixPartners report is instead a smokescreen.