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MTA head Thomas Prendergast: Fare hikes coming again in 2015 but agency will try to cut costs

Thomas F. Prendergast speaks during an Assembly public

Thomas F. Prendergast speaks during an Assembly public hearing in Manhattan on the MTA's finances and operations. (Jan. 11, 2013) Photo Credit: Rory Glaeseman

The governor's pick to lead the MTA said Wednesday that he is going ahead with the agency's plans to hike fares in 2015 for Metro-North and the rest of the transportation system's bus, subway and rail systems.

"The current financial plan is the current financial plan which states that there will be a fare increase in 2015," Thomas Prendergast, the MTA's interim executive director, told reporters after the agency's monthly meeting Wednesday in Manhattan.

In addition, Prendergast said, he's directed his staff to slash another $500 million in agency costs over the next two years, on top of the $700 million cut last year.

"It's important as we get additional revenue we look at that and present it to the board in terms of where we have dollars to spend, how best to spend those dollars," Prendergast said.

He added that he wants to enhance or increase services -- not cut them -- while keeping an eye on limiting the size of future fare increases.

"It's my responsibility to bring that forward," Prendergast said.

Prendergast was nominated by Gov. Andrew M. Cuomo earlier this month to be the MTA's next chairman. The nomination awaits the approval of the State Senate. There is yet no date set for his confirmation. If approved, he will replace the acting chairman, former Bronx Borough President Fernando Ferrer.

A 38-year veteran of public transit systems, Prendergast, 60, has served as president of two MTA agencies -- the Long Island Rail Road and, most recently, New York City Transit. He lives in Brewster.

Prendergast will take over an agency struggling to recover after recession-linked downturns in the real estate market drained some $1.2 billion in annual revenue from the MTA's $12.6 billion budget several years ago.

To close the gap, Albany lawmakers in 2009 came up with a plan for 7.5 percent revenue hikes for each MTA agency, including Metro-North, every two years. The most recent hike came in March, and the next increase under the state bailout plan is scheduled for 2015.

Additionally, the MTA faces the potential loss of some $1.8 billion in annual revenue that comes from a payroll tax on businesses in its region.

Last summer, a judge declared the payroll mobility tax unconstitutional after a challenge from towns and counties on Long Island and in the Hudson Valley. One lawmaker called it a "job killer." The MTA has appealed the decision.

Beyond that, Prendergast must find a way to rebuild large swaths of a system badly damaged by the aftereffects of Hurricane Sandy. The storm caused the agency some $5 billion in damages and lost business.

"I know it's a challenge that it's (the MTA) never seen before," Prendergast said.

Metro-North President Howard Permut told board members Monday that it will take four years and $300 million to repair the Hudson Line alone. The superstorm washed out stations from Croton-Harmon south as the Hudson River surged over tracks and rights of way.

"It is going to take time until we can bring the Hudson Line back to where it was," Permut said.

Prendergast said he remains committed to MTA customers in the city and the suburbs.

"You are only as good as your last hour, rush hour," Prendergast said. "You're only as good as your last budget. You're only as good as your last year of service."

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