MTA riders won't be stuck with tab from Sandy damage

MTA chairman and CEO Joseph Lhota said the MTA chairman and CEO Joseph Lhota said the Metropolitan Transportation Authority won't alter its proposal for a 7.4 percent fare increase as a result of lost revenue related to superstorm Sandy. (Nov. 5, 2012) Photo Credit: Faye Murman

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Hurricane Sandy cost the MTA more than $5 billion in damage and lost business, but straphangers and rail riders won't get stuck with the tab, the transportation agency's head promised Wednesday.

"The burden of Sandy will not be upon our riders," Metropolitan Transportation Authority chairman and CEO Joseph Lhota said at a news conference after the board's monthly board meeting in Manhattan.

Specifically, Lhota said the economic loss caused by Sandy won't force the MTA to alter its proposal for an across-the-board fare revenue increase of 7.5 percent in 2013's $12.6 billion budget. Metro-North riders are facing potential ticket increases of as much as 9.3 percent, depending on the route they travel. A board vote on the hike is scheduled for December.

"No connection whatsoever," Lhota said when asked whether unanticipated storm costs could force the MTA to reconsider its fare hike proposal.

During Sandy, Metro-North suffered its worst damage along the Hudson Line, where water surges of 10 feet or more washed out stations from Croton-Harmon and south. Some of the fixes needed along the commuter rail include:

• $10 million to fortify the Hudson River shoreline.

• $1 million to repair the dock at the Haverstraw ferry landing, which is operated by Metro-North.

• $1.8 million to replace six coaches and seven locomotives stored at an NJ Transit facility in the Meadowlands that was flooded.

MTA officials said they hope to recover at least 75 percent of the $4.75 billion in infrastructure-related damage from the Federal Emergency Management Agency. That could be supplemented by the $1 billion in insurance the agency has.

An additional $268 million in business lost when riders could not use much of the bus, rail and subway system will be recouped through insurance and federal reimbursement, officials said. Already, the feds have agreed to reimburse the MTA for the $144 million in lost ridership incurred through Nov. 14.

The MTA estimated that Metro-North lost 620,000 riders in October, due to four days when the nation's busiest commuter rail was largely shut down.

Despite the decrease, Metro-North ridership is up 2.2 percent -- or 1.5 million riders -- during the first 10 months of this year compared with the same period in the previous year.

The agency will be forced to borrow money to cover its losses while it waits to find out how big the reimbursements will be, MTA officials said.

"This process is in the first inning," Lhota said. "I have a lot of confidence in the federal government and how they have reimbursed in other natural disasters."

State and city officials are pressing the feds to go beyond the typical 75 percent reimbursement rate for disasters so that nearly all the region's expenses are covered. If they don't, MTA officials said the agency could be left with a $950 million hole, which would have to be made up through further cost cutting at the cash-strapped agency.

"This will be a full-court press by the City of New York and the State of New York," Lhota said. "No doubt about it."

Whatever money is poured back into the system will go to getting the transportation system back to the point where it was before Sandy hit. It will not, however, cover expenses for so-called "hardening" of the system to prevent the sort of flooding that put subway and commuter rail stations out of operation.

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