The Metropolitan Transportation Authority will not seek additional fare hikes or service cuts to cover the nearly $5 billion needed to rebuild its transit network after superstorm Sandy, agency chairman Joseph Lhota vowed Wednesday.
Lhota said at a Manhattan meeting of the MTA board that he had "an enormous amount of confidence" that the Federal Emergency Management Agency would cover 75 percent or more of the $4.75 billion in infrastructure damage caused by the Oct. 29 storm. The MTA also has about $1 billion in insurance coverage.
But chief financial officer Robert Foran said the MTA could still be responsible for about $950 million in repair costs.
The storm-related expenses undermined what had been a better-than-expected financial outlook for 2013, Foran said. Real estate revenue and favorable interest rates had put the agency on a better financial footing than in July, when it released its preliminary 2013 budget, which predicted the MTA would end 2013 with a small surplus.
"And then Sandy came along," Foran said.
The MTA, which has already achieved about $700 million in annual cost cutting since 2010, will look for more efficiencies to help cover its share of the Sandy bill, Foran said. The agency will work to save another $29 million next year and $48 million in subsequent years "until it's paid off."
But reimbursement from FEMA and insurance companies could take years, so the MTA will look to borrow money, including from employee retirement accounts, and dip into emergency reserves to pay for repairs.
One place the MTA will not look for extra money is in customers' pocketbooks, Lhota said. He promised that the agency would stick with its plan to raise fare revenue by about 7 percent in 2013 and again in 2015, but not increase the amount.
"The burden of Sandy will not be upon our riders," Lhota said, also ruling out any service cuts.
"The agency already faced major financial challenges before Sandy hit," Russianoff said. "These have greatly increased in the devastating wake of the storm."
The MTA also faces future expenses related to hardening its infrastructure to protect itself from future natural disasters.
Agency officials did not have an estimate on what those investments could cost, but Lhota emphasized that the immediate goal is to "get the functionality of the system back to where it was the day before the storm hit."