MTA chief Joe Lhota: 'Burden of Sandy' won't fall on customers
The MTA won't impose additional fare hikes or service cuts to cover the nearly $5 billion needed to rebuild its network after Superstorm Sandy, chief Joe Lhota said yesterday.
During an MTA board meeting, Lhota said he had "an enormous amount of confidence" that FEMA would cover 75% 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.
"The burden of Sandy will not be upon our riders," Lhota said, adding that the agency's plan to raise fare revenue by about 7% in 2013 and again in 2015 would not be increased.
Still, CFO Robert Foran said the agency could still be responsible for about $950 million in repair costs.
The storm-related expenses halted what was a better-than-expected financial outlook for 2013, Foran said.
Real estate revenue and favorable interest rates 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.
The MTA, which has already achieved about $700 million in annual cost cutting since 2010, will look for more efficiencies that could 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 Gene Russianoff, of the Straphangers Campaign, cautioned that "the agency already faced major financial challenges before Sandy hit."