MTA needs to do more to save money

Days after two Albany heavy hitters vetoed the MTA’s next five-year capital plan, an audit released Thursday by the state Comptroller’s office says that the operators of New York’s largest transportation agency has not done enough to save money.

The lack of money savings is centered around “procurements,” per state Comptroller Thomas DiNapoli. According to the state’s top money big wig, the MTA has “not done enough to consolidate its procurements across its agencies to save money as was expected under its Transformation Plan.”

The MTA was required by law to create a Transformation Plan by June 30, 2019, which it did. One part of the plan was to consolidate procurement for its five operating agencies, MTA Construction and Development, and MTA Headquarters to save money and avoid redundancies, DiNapoli explained.

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But those actions were not enough, and now the state comptroller believes the MTA needs to take additional steps to better coordinate its purchasing efforts.

“The MTA faces continued pressure to implement its capital programs and savings initiatives, which would benefit from furthering its stated goals of transforming its procurement process,” DiNapoli said. “More savings may be possible if it does more to coordinate purchasing among its agencies instead of the status quo of having them procure their needs independently. Consolidation, efficiency, and savings in this area was promised years ago, but has yet to be fully realized.”

The audit follows another blow to the MTA this week, when state Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie rejected the agency’s capital plan for 2025-2029 just days before Jan. 1.

Delving deeper into Thursday’s audit, the MTA’s “actual practice of buying goods and services” has not changed as of September 2023, two years after its October 2021 effective date of consolidation. The audit cites several examples of this lack of progress, mostly with procurement operations, which handles direct purchases of things like parts for train cars and buses.

According to the comptroller’s officer, the MTA reported saving $152 million in 2022, but the audit examined $37.7 million of that total and concluded that “none of it was due to transformation or consolidation.”

The audit revealed that the savings were from canceled orders and services that were no longer needed. According to the audit, just $4.29 million of the sampled savings were the result of procurement operations actions.

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But MTA officials said they largely disagree with the findings. As for consolidation, the agency’s five different procurement departments now fall under one umbrella, with most cost savings coming through construction contracts.

“The MTA successfully consolidated and reorganized the agency per the Transformation Plan, forging ahead with less redundancy and red tape,” MTA spokesperson Joana Flores said. “The MTA is still continuously improving business practices with more cost savings and has achieved reduced costs – identifying an additional $100 million in annual recurring savings for a total of $500 million annually,  all while providing more subway, bus, and railroad service than ever before.”

Riders react

Meanwhile, riders’ groups are responding to the MTA’s heavy blows this week. With the capital plan in limbo, public transit users do not know what to expect regarding the future of MTA projects, including signal upgrades and station improvements.

“Again and again, funding uncertainty has turned MTA capital plans into political footballs, with riders caught flailing like Charlie Brown,” Lisa Daglian, executive director of the Permanent Citizens Advisory Committee to the MTA, said.“Riders deserve a fully funded capital plan now so the MTA can begin the State-of-Good-Repair and system improvement projects we desperately need.”

Danny Pearlstein, the Riders Alliance’s policy and communications director, said in response to the audit that riders’ needs are paramount.

“Efficiency is a work in progress, but elected leaders can’t make the perfect the enemy of the good when it comes to meeting riders’ needs for safe, reliable, accessible public transit service,” he said.