Aggarwala: Reforming Public Authorities

The following remarks were made by Rohit Aggarwala, Chief Policy Officer of Sidewalk Labs and Chair of RPA's Fourth Regional Plan, at the 2017 RPA Assembly on April 21, 2017. 

Tomorrow marks an important milestone. Ten years ago on April 22, Mayor Michael Bloomberg unveiled PlaNYC -- the city’s first long-term sustainability plan since the Lindsay Administration.

I was honored to help lead that effort as part of Mayor Bloomberg’s team. And I valued tremendously the support that so many of you offered both in the plan’s development and in its implementation.

PlaNYC owed a great debt to the RPA -- not only because RPA was a tremendous supporter, but because many of the ideas it contained were advanced first in the RPA’s Third Regional Plan, released in 1996.

Given that debt, I’m honored to be here today as the Chair of the Fourth Regional Plan. And I’m here to build on many of this morning’s comments to talk about one of the key ideas that will be in the Plan when it is released later this year: The need to reinvent our public authorities.

The Fourth Plan and Transit Agencies

When we started the Plan four years ago, we knew that our transportation agencies were struggling to retain public confidence. Since then, it’s only gotten more clear.

Bridgegate highlighted the damage of political meddling. Rail crashes on Metro-North, New Jersey Transit, and Amtrak have all reminded us how important the health of these organizations is, quite literally, to our lives. Our inability to complete East Side Access, build new tunnels under the Hudson, or even conduct a conversation on the future of the Bus Terminal gives many of us a constant sense of despair.

And the few successes -- Select Bus Service in New York City, the Goethals Bridge replacement -- these seem to be too slow in arriving, and too small in scale, to give us hope. If anything, as ew just heard, the Second Avenue Subway extension was so expensive that no one really expects it to continue.

It’s no wonder, then, that two years ago here at the regional assembly, 85% of the audience said they expected the Hudson River tunnels to collapse before replacements were built. That was a stunning vote of no-confidence in our region’s future, and in the institutions charged with managing our infrastructure.

What’s going wrong?

All this time, we’ve been trying to understand what has been undermining these entities. Because there is no question that in the past, the Port Authority, the MTA, and NJ Transit have been a critical source of New York’s greatness.

The Port Authority was formed in 1921, and over the next 30 years it tied New York and New Jersey together in ways that made our city the global standard for infrastructure innovation. The MTA was created in 1968, and over the next 15 years it completed the herculean task of returning a collapsed transit system to good working order. It’s not an understatement to say that the MTA saved New York City. Across the river, New Jersey Transit was formed in 1979, when the very existence of commuter rail seemed to be in doubt; over the next 25 years, it gave New Jersey arguably the best rail and bus service in the nation.

So we’ve been asking ourselves over and over: what happened? What’s gone wrong? And what’s to be done?

The Non-Issues

→ Political meddling

Bridgegate especially made us all focus on the way political interference can warp the way these agencies are intended to function. So it was easy to think that we should just make these agencies more politically independent and our problems would be solved.

But we also know that, in a democracy, power must eventually flow up to the elected representatives of the people. And as we’ve seen in the case of the SecondAvenue Subway, some political meddling can be quite useful in expediting project delivery.

So it’s not just about political meddling.

→ People

It’s equally tempting to blame the people who staff and lead these agencies. But we don’t believe that, either. The RPA’s board has former leaders of all three of these entities, and of course, the current chairman of Amtrak and acting chairman of the MTA. So we understand the challenges and constraints that leaders of these agencies face. And we know that the staff of these agencies include some of the best transportation professionals anywhere. So it’s not the people.

→ Money

And it is, of course, most tempting to think that the problem is just money. But we don’t believe that either.

Across the country, voters have been willing to approve bond issues, sales tax increases, and even gas tax increases to pay for transportation. But here in New York -- the most transit-dependent place in North America -- we believe that voters would do no such thing. Not because they don’t want the transit, but because they don’t have faith they would get what they paid for And our region would clearly reap gigantic economic benefits from smart transit investments, if they were delivered on time and at reasonable cost.

So we no longer believe that funding is the major problem.

The Need for Reinvention

What we have concluded is that the problems lie in the very shape and the structure of our transit agencies. We have come to believe that no amount of planning or funding will move our region forward unless we address a sobering fact: That we are managing our transportation infrastructure through a set of organizations that are deeply flawed in their very structure. In what they control, in who they report to, in how they are organized.

In short, we we have concluded that we need to reinvent the most important set of institutions we have. And I mean reinvent them. Not just reform them.

Global Comparisons

As we study the rest of the world, we realize that most other world cities have recognized that changing times require changing institutions.

→ London

We often look first to London as New York’s most comparable city, and the transformation of London’s transit system over the last 15 years has been dramatic. When we’ve asked people in London how that happened, they all start their answer with the same moment: 1999, when an entirely new transportation entity – Transport for London – was created.

It reflected a massive change: the transfer of the entire transit system from the national government to the municipal government. By shifting accountability to an official elected only by people who lived in TfL’s service area, it focused leadership attention on making the system better, rather than using it as a political tool.

London is just one example.

→ Hong Kong

In Hong Kong, MTR was reorganized fundamentally only 17 years ago, turning what had long been a government agency into a corporation that was owned mainly -- but not entirely -- by the government.

By selling a minority stake in the system to the public, it obtained an influx of capital. More importantly, however, it also obtained the benefits of corporate governance, while retaining the government’s ultimate ability to set policy. And one of the benefits of corporate governance is that there are very strong legal checks on the ways that government can influence the board’s decisions.

→ Los Angeles

Here in the United States, it’s been hard to ignore the fact that one of the most aggressive transit expansions in the nation has been happening the city that most of us still think of as the iconic city of sprawl. In Los Angeles, LA Metro has set the standard for value capture, for transit construction, and for the generation of transit-oriented development around new stations.

So it’s worth noting that LA Metro itself is the result of a public realization that organizational structure was the problem. It was created in 1993, from the merger of two entities which were each struggling to gain the public’s confidence. One was controlled by the City. The other was controlled by the County. And they just couldn’t get along. They failed to coordinate schedules. They even planned two nearby transit stations that didn’t connect. And the public got angry.

So a new agency was created, with centralized governance that reflected the prerogatives of both the City and County and included elected officials from each body. By eliminating squabbling between jurisdictions, LA Metro regained the public’s confidence. Twice over the last twenty years, Angelenos have supported tax hikes to fund transit expansions. And in California, that requires a two-thirds majority.

That’s an impressive vote of confidence -- and unfortunately one we can’t imagine in this region under current conditions.

Historical Context

What all of these examples have in common is that those other cities had the courage to recognize when their older institutions had outlived their usefulness.

It used to be that New York was a place that did that. In fact, all of our agencies were once state of the art innovations, well designed to meet the challenges of their time. So it’s not that our institutions are fundamentally flawed; it’s just that they were designed for challenges that no longer exist.

In 1921, the Port Authority’s authority structure and ability to issue bonds was hugely innovative. It solved the problem of tapping the bond markets for public works. But that’s not the problem now.

In 1968, the MTA allowed the strong tax base of the thriving suburbs to help resurrect the subways. Among other things, it shielded the MTA from the problems of a city government that was on the verge of bankruptcy. But that’s not the problem now.

In 1979, New Jersey Transit helped convince New Jersey residents that commuting by rail and bus could be a viable option in a world that was rapidly shifting jobs to the suburbs, and expanding highways. But that’s not the problem now.

The times have changed, but our institutions have not. Closing and charge to the audience

So that is going to be the first set of recommendations in the Fourth Regional Plan: a package of proposals to reinvent our region’s institutions to meet the challenges of today.

And I repeat: reinvent them. Not just reform them. That’s a tall order. And we don’t expect everyone to be happy about it.

Twenty-one years ago, when the Third Regional Plan was released, one elected official called it “dead on arrival.” And in fairness, it included a bunch of ideas no one considered realistic at the time. Or even necessary. Ideas like extending the subway to the West Side. And up Second Avenue.

Ideas like converting traffic lanes into bike lanes and pedestrian plazas.

Ideas like a Central Pine Barrens Commission to protect Long Island’s water supply.

Ideas like reclaiming the Hudson River waterfront for residential and recreational use.

It even included the idea of charging cars to drive into Manhattan. And the crazy idea that we needed another set of rail tunnels under the Hudson River.

Just like many of these ideas that seemed crazy at the time, it merely took the courage and the creativity to embrace them, to get them realized. We see that with the 7 train. And Second Avenue. And the Pine Barrens.

And just like the rail tunnels, it’s also easy to limp along, and delay and delay, because it will these are not easy problems to solve.

But the need isn’t going to go away. It’s just going to get more urgent. And until we do it, there’s not much other progress we can make.

Questions

We’re still working on the Fourth Plan, so I’m not here to share any solutions. But I am here to make clear the kinds of deep questions we are asking. Questions like:

Should we really group airports, container ports, the PATH system, and the Hudson crossings in the same agency? Or would they be better off as separate entities?

Does it make sense to group New York’s commuter railroads together with the city’s bus and subway system? And if we group them, why don’t we integrate their operations further?

As commuting patterns change, why do we divide the region’s commuter rail system at the Hudson River?

As Penn Station is clearly the most important point in the region’s transportation network, does it make sense for it to be operated by a national railroad that answers mainly to Congress?

And the most fundamental questions of all:

If we didn’t have them today, would we actually invent organizations that look like the ones we currently have?

And if not, why don’t we make them into the institutions we need?

 

Closing

Because that is the biggest question of all. And the answer to that question is likely to determine much about our future.

Whether we get new tunnels built before the old ones fail. Whether we can keep up with our competitor cities around the world. Whether we can create an equitable, prosperous, and sustainable future we know is possible for this region. We won’t be able to get there with the institutions we have. So I hope you will join us in asking those deep questions.

And that you will help us in following through on the answers. It’s time for reinvention.