POD Cast Draft

Financial Analysis of the Metropolitan Transportation Authority Bridges and Tunnels: 

Financial Analysis of the Metropolitan Transportation Authority Bridges and Tunnels John Jay College MPA Program PAD 713; Professor Wandt Thomas Koziak – Team Leader Nicole Bishop-Perez Lauren Ruggerio Heather Sinkowitz Michael Zilinski

Slide 3: 

Henry Hudson Bridge

Slide 5: 

Bronx- Whitestone Bridge

Slide 6: 

Throgs Neck Bridge

Slide 8: 

Cross Bay Veteran’s Memorial Bridge

Slide 9: 

Bro oklyn-Battery Tun nel

Slide 10: 

Marine Parkway - Gil Hodges Memorial Bridge

Slide 11: 

Verrazano-Narrows Bridge

Agenda: 

Agenda Current Fiscal State Role of the Media Allocation of Revenues and Tolls Financial Restructuring Issuance and Impact of Bonds Conclusion & Recommendations

CURRENT FISCAL STATE: 

CURRENT FISCAL STATE

Financial Statements: 

Financial Statements 2010 Operational Performance Operating revenues are up year over year Operating expenses are down year over year Operating income is $910M for 2010, up $93M from 2009 Source: Deloitte & Touche LLP. (2011). Independent Auditor’s Report. New York: MTA Triborough Bridge and Tunnel Authority.

Financial Statements: 

Financial Statements 2010 Transfers! $152M to the NYC Transit Authority $277M to the MTA 2010 surplus after transfers of $114M Source: Deloitte & Touche LLP. (2011). Independent Auditor’s Report. New York: MTA Triborough Bridge and Tunnel Authority.

Slide 16: 

The Role of the Media

Newspaper Articles: 

Newspaper Articles News Clips

Financial Restructuring : 

Financial Restructuring MTA’s Capital Program

“Making Every Dollar Count”: 

“Making Every Dollar Count” The MTA has already accomplished a savings of 2 billion dollars.

MTA cuts in administration costs Approval gates Unnecessary overtime: “Save time on the job”: 

MTA cuts in administration costs Approval gates Unnecessary overtime: “Save time on the job”

Transparency Web- Based Capital Program Dashboard Special Committee of the MTA Board Traffic Light Report : 

Transparency Web- Based Capital Program Dashboard Special Committee of the MTA Board Traffic Light Report

Contractors and Unions : 

Contractors and Unions

Allocation of Revenue and Tolls: 

Allocation of Revenue and Tolls

MTA OPERATING EXPENSES: Where the Money Goes : 

MTA OPERATING EXPENSES: Where the Money Goes Source: MTA 2010

Slide 25: 

Throgs Neck Bridge = $13 R/T Bronx-Whitestone Bridge = $13 R/T Of the $13….. $4.68 goes to MTA Payroll $1.30 goes to Health and Welfare $3.13 goes to non-labor costs $1.17 goes to pensions $2.08 goes toward debt service $0.13 goes to other labor $0.52 is for overtime

Issuance and Impact of Bonds : 

Issuance and Impact of Bonds

Bonds Issued by The Triborough Bridge and Tunnel Authority In 2010: 

Bonds Issued by The Triborough Bridge and Tunnel Authority In 2010 $346,960,000.00 in General Revenue Bonds. $66,560,000 in tax exempt bonds (series 2010A-1). $280,400,000 in federally taxable and subsidized Build America Bonds (series 2010A-2).

What These Bonds Intend to Fund: 

What These Bonds Intend to Fund $43,327,635 of the 2010A-1 bonds are to fund MTA bridge and tunnel projects $32,252,841 of the 2010A-1 bonds are to refinance their series 2009 bond anticipation notes $1,433,743 of the 2010A-2 bonds will be applied to various projects. $159,087,372 of the 2010A-2 will refinance the series 2009 bonds

Bond Ratings and Interest Rates: 

Bond Ratings and Interest Rates Moody’s: Aa2 Standard & Poor’s: AA- Fitch: AA The 2010A-1 bonds yield an annual interest rate of 2% in 2011, 4% in 2012 and 5% each year after until 2020 The 2010A-2 bonds are comprised of two sets The first term bond matures 11/15/2032 and yields a 5.45% annual interest rate The second set of term bonds matures 11/15/2040 and yields a 5.55% annual interest rate

Slide 30: 

ISSUE Maturity Range Today Last Week Year Ago National 10 Year 2.60 2.60 3.05 National 20 Year 4.20 4.20 4.40 National 30 Year 4.60 4.55 4.70 Average National Bond Market Yeields for AA rated Bonds as of October 2011 fmsbonds.com:

Slide 31: 

It appears clear that the issuance of bonds to fund projects, cover expenses, and refinance previous bonds has become dangerously habitual. Paying unnecessary higher interest rates on bonded debt compounds the problem

Conclusion: 

Conclusion Capital Program a step in the right direction Too much dependency upon bonds Recommendations: Continue focus on efficiency Reduction of reliance upon the issuance on bonds Further research into initial source of dept issues