New York state comptroller says extra Federal funding may reduce need for Thruway toll hike, hits ORT projects

New York State Comptroller Thomas P DiNapoli says in an audit of proposed toll increases by the New York State Thruway Authority (NYSTA) that the authority is underestimating the federal grants it can obtain from USDOT. The toll increases, he says, should be reconsidered. DiNapoli says NYSTA should be able to "conservatively" bank on getting $125m over five years 2008-2012 from the feds, whereas the NYSTA staff are only counting on $4.9m/year. He thinks they are missing out on $100m.

The audit says other measures would also reduce the need for toll revenue increases including deferral of "non-essential capital projects" such as new E-ZPass lanes and rehab of maintenance buildings. This could save $160m.

Included in this list of the comptroller's projects deemed non-essential were:

- $92m for new E-ZPass toll lanes

- $29m of new and rehab work on police barracks, maintenance facilities and other building

- $14m ITS items including new variable message signs

- $9m in noise barriers

- $4m for new parking at service areas

- $3m in new pedestrian bridges over the Thruway

The comptroller says they all appear good projects, but since they don't affect highway or structural conditions he deems them non-essential and says they can be deferred. (p11)

The comptroller claims use of a collection agency could increase $6m more toll immediately and more later.

A "top to bottom analysis" (sounds like the stem to stern one in Massachusetts?) is urged to cut costs rather than the Authority's "modest cost containment initiative" that aims to keep cost increases to 3.5%/year.

The auditor says the authority could be more aggressive in collecting money on delinquent E-ZPass accounts, and could promote private sector sponsorship and advertising more.

BACKGROUND: Toll revenues in 2006 were $554m of which trucks provide 40% while constituting 15% of traffic. By revenue the network is split about one-third toll barriers, two-thirds ticket system. 74% of truck tolls are by E-ZPass electronic tolling (ET) and 55% of passenger car tolls. E-ZPass started in 1993.

Past toll increases (cars,trucks) have been:

1959 28%, 18%
1970 none, 19%
1975 16%, 8% (barriers only)
1980 25%, 30%
1988 32%, 28%
2005 cars cash 25% ET 12.5% cars, trucks cash 35%, ET 28.3%
2008 cash ticket system tolls up 10% all vehicles, barrier system cash tolls increased from 9 to 33%, no ET increases

New toll increases

Proposed new increases 2008 to 2010 are:
July 2008 ET tolls in ticket system increased in effect by 16% with E-ZPass discount cut from 10% to 5% for cars, for trucks on the ticket system an increase of 10% ET, at barriers ET tolls up 10% to 40% for cars, 10% to 18% for trucks.

Jan 2009 all ticket system tolls up 5%, barrier system cars up 0 to 25%, trucks up 5 to 15%, commuter rates up 4 to 6% except at Tappan Zee bridge with 50% rise.

July 2009 some special truck discounts ended

Jan 2010 as in 2009 all ticket system tolls up 5%, barrier system increases for trucks at Tappan Zee Bridge and Spring Valley, another 5% increase in some commuter rates.

21% toll increase weighted average

In total these amount to about a 25% increase in electronic toll rates and a 10% increase in cash rates. 2010 toll revenues would be $719m with the toll increases and $593m without, an increase of 21%.

Currently the authority has toll revenue of around $600m/yr and spends $355 on operating expenses, $160m is debt service. It has 3,400 employees and pays for 350 state troops who patrol its roads for an effective staff of 3,750. This year it gets $30m in federal funds and $32m in state and local funding. Concession revenues are $13m.

Funding of the authority's 7-year $2.7b capital plan initiated in 2005 is the major rationale for the increases.

NYSTA maintains and operates 1,032km (651 miles) of the Thruway tollroad that extends from the New York City line in Yonkers to the Pennsylvania line on Lake Erie that it financed and built in the 1950s, plus several untolled highways: I-287 Cross Westchester Expressway which is a spur off the Thruway in Tarryown and I-84 that crosses the Thruway and runs between Pennsylvania and Connecticut, plus 843km (24 miles) of canals, now mainly used for recreation and of historic and scenic interest. This includes the Erie Canal.

NYSTA has been required by state legislation to fund various other uneconomic projects including an "intermodal transportation center" (for some intermodal is always good) in Syracuse, work on harbors in Syracuse and Buffalo, and many small projects.

Since 1990 NYSTA has spent over $1 billion of toll generated revenue on these non-tollroad items. the larger ones being canals $700m, I-84 $161m, I-287 $101m and mandated 'economic development' projects $61m.

Here's one for the Pennsylvania Turnpike Commission: the PTC gets praise from the NYS Comptroller for getting $1.3m out of State Farm Insurance for selling the rights to place their logo and colors on Turnpike patrol vans (TRnews: we think it's something of a fraud because it represents the patrol service as provided by State Farm when most of the cost is paid for by the Turnpike.) PTC also gets plaudits from the NY Comptroller for selling ad space on toll booths and retail coupons on toll tickets earning $600k/yr.

His report says the Penn Pike is considering sale of naming rights to Interchanges, and Heinz Foods are interested in making Exit 57, the Heinz Exit.

The new director of the Massachusetts Turnpike Authority is seen as setting an example for the New York Thruway in conducting his comprehensive study of costs.

The Thruway is criticized for a poor capital project management system that has engineering and finance departments using different procedures to track projects, leaving management with no way to measure progress.

NYSTA response

The Thruway executive director Michael Fleischer rejects the report's recommendation on tolls saying the Comptroller's spending cuts would only affect $70m of the $520m in extra needs funded by the toll increases. Also they don't accept that that the planned expenditures are non-essential.

Half the projects the Comptroller wants dropped are for construction of highway speed electronic tolling at mainline barrier plazas - a project he says has clear safety, congestion relief, energy saving and emission reductions benefits.

Fleischer also says the extra parking at service plazas is for trucks. This, it would seem, has safety benefits and improves the quality of life of truckers as compared to having jammed service plazas forcing truckers to park on shoulders of the road.  Truckers being the most loyal customers of the Thruway, an intelligent business will take special care to provide them with good facilities, and never deem such items non-essential (our comment).

Fleischer says the recommended top-to-bottom review of costs is irrelevant since the Thruway already has in place financial monitoring and budgeting systems that keep down costs. He claims it has done better than the state as a whole in containing costs (3.5% vs 5.0%).

A collection agency is already being sought, he says, to help with extra collection of unpaid tolls, but only expects an initial $4m extra in the first year and $1m a year after that.

Fleischer says federal funds were projected according to commitments and there is no way of estimating new money. He says that since the March 2005 agreement with NYSDOT under which tolls were removed in Buffalo USDOT interstate maintenance funds that had been used for untolled highways under NYSTA now go exclusively to NYSDOT.

Moreover Fleischer says in his response to the audit, federal funds are under heavy pressure from the rundown in trust fund balances.

The Thruway has looked for extra revenue from advertising and sponsorships. It has concluded, Fleischer says, that the limited revenue to be gained doesn't justify the safety (and esthetic?) costs of distracting motorists with lots of extra ads.

He agrees that capital project tracking can be improved and says that will be addressed as part of a larger financial management system project.

here is the Comptroller's audit of NYSTA: http://www.osc.state.ny.us/audits/allaudits/093008/08s6.pdf

COMMENT: We think NYSTA is mostly right here. The Comptroller's idea that all capital projects can be deferred except those bearing directly on structural integrity of bridges and pavement is preposterous. Did he watch too many videos of the MN/I-35W bridge collapsing?

No new congestion relief, no other safety, no service improvements, he says. Nuts.

In our opinion toll agencies should not, as a matter of principle, seek tax money. It is important for them to be able to say they are self-financing and supported entirely by their users, and make no demands on taxpayers or the state or national budgets.

A comptroller should not be encouraging the state toll authority to join the lobbying circus in Washington DC. Their job is to live on what they can earn from serving their customers, the motorists.

(We'd jettison principle in one instance however: since Delaware doesn't give a damn about the horrendous backups of out-of-state motorists at the I-95 Turnpike barrier plaza and isn't lifting a finger to modernize it they should get a special I-95 toll plaza grant of $10m from USDOT conditional on fixing the tolling within 12 months, and accepting responsibility to provide restitution to all those motorists who have suffered there in the last ten years.)

TOLLROADSnews 2008-01-28 EDITED 2008-01-29 12:45