Saying Riders Need Data, City Orders Transit Audit

NEW YORK TIMES
December 19, 2002

By RANDY KENNEDY

As plans for raising fares moved forward, the city comptroller's office said yesterday that it would audit NewYork City Transit, accusing the agency of offering far too little information to allow bus and subway riders to determine whether increases were necessary.

The audit was ordered two days after the authority's parent, the Metropolitan Transportation Authority, reached a hard-fought contract agreement with the transit workers' union that included some concessions and a one-year wage freeze but did not exact the kinds of productivity gains from workers that top officials had wanted.

Yesterday, the board of the M.T.A. voted to hold public hearings on fare increases, a necessary first legal step toward increasing the cost of a single ride to either $1.75 or $2. The board also wants to raise fares for the commuter railroads and bridge and tunnel tolls. The hearings will be held around the metropolitan region, probably next March, for increases that could take effect in the spring.

Transit officials insisted yesterday that the labor agreement would have no direct effect on the level of the
fare increase because expectations of increasing labor costs had long ago been built into budget projections,
which show the agency facing huge deficits for a variety of reasons.

"The contract has no bearing on the fare scenarios," said Tom Kelly, the chief M.T.A. spokesman, though he added that the agency was not yet prepared to say how much the new contract will cost or how much had been set aside in the 2003 and 2004 budgets for additional labor costs.

William C. Thompson Jr., the city comptroller, said it was questions like those, long unanswered by transit officials, that led him to order a full audit of the transit authority, also known as New York City Transit, the agency that operates the subway system and city buses.

While the comptroller's office has examined parts of the agency's budget before, Mr. Thompson said that his staff believed this was the first time a top-to-bottom audit had been planned.

The state's laws on public authorities give him the power to perform such a thorough audit, Mr. Thompson said, adding that while he had long believed an audit was necessary he wanted to wait until after labor talks so as not to undermine them.

In a letter to Peter S. Kalikow, the M.T.A. chairman, Mr. Thompson wrote: "While the glaring deficiencies in the M.T.A.'s presentation of the T.A.'s budget proposal may not constitute a breach of the M.T.A.'s fiduciary responsibilities, it does constitute a breach of responsibility to the citizens of New York City."

The 2003 budget proposal, which has been approved by an M.T.A. committee, "does not provide adequate details and appropriate disclosure to allow for proper public debate on the proposed fare increase," Mr. Thompson's letter added.

M.T.A. officials said yesterday that they planned to cooperate with the audit but they did not sound happy about it. `'It's nice to know that the monthly financial committee reports that we've been sending to the
comptroller's office won't be gathering dust," Mr. Kelly said.

At yesterday morning's meeting of the M.T.A. board, hours before the audit was even ordered, Mr. Kalikow took issue with what he saw as mounting accusations that the agency is being less than candid about its finances, saying that it has been warning of deficits for eight months.

But Mr. Thompson contended that the transit agency had poorly explained how it came to face a deficit of more than $1 billion next year after running a surplus of as much as $300 million last year. M.T.A. officials have said that, in part, the recent picture of financial health was deceptive, created with subsidies that Gov. George E. Pataki advanced the agency to avoid a fare increase this year.

They also argue that their deficits are simply a product of increasing expenses and flat revenues, because MetroCard fare discounts over the past several years have lowered the average subway and bus fare to $1.04 though the base fare is $1.50.

Even so, Mr. Thompson said, the agency's most recent operating budget proposal, of $4.8 billion for next year, makes it very hard to tell whether the warnings of huge deficits are exaggerated or not. The budget leaves out several large pieces of income, he said, like subsidies from the city and state and dedicated taxes. It also did not include expenses like new labor costs or debt service on capital projects.

"Therefore," he wrote to Mr. Kalikow, "it was not possible to calculate to what degree costs from a new collective bargaining settlement would impact the T.A.'s projected deficits," a very important question for the hearings.

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