Port of New York and New Jersey Board approves 2010 budget

In response to the historic economic downturn, the Port Authority Board of Commissioners today approved a $6.3 billion budget for 2010 that controls spending by providing for zero growth in operating expenses for the second consecutive year and reducing agency headcount to its lowest levels in 40 years. The budget also calls for $3.1 billion in capital spending to keep its priority projects moving forward, but also defers certain major capital expenditures in response to the economic downturn, which has significantly impacted the agency.

The budget approved today reduces agency headcount by 150 positions, bringing staff levels to the lowest in 40 years, and includes other cost-control measures including: a 20-percent reduction in overtime and a 32-percent reduction in external consultants. Taken on top of previous staff reductions, the Port Authority has now eliminated 507 non-police positions since 2004, a 9 percent reduction.

The agency also said its 10-year capital capacity has shrunk $5 billion, from $29.5 billion to $24.5 billion, due to the economic recession, which has caused continued projected declines in activity levels at all Port Authority facilities in 2010 when compared to originally forecasted estimates, including declines in passenger traffic of 10 percent at the airports and 11.8 percent on the PATH rapid-transit system, a decline of 6.1 percent in vehicular traffic at the bridges and tunnels, and a decline of 16 percent in cargo volumes at the marine terminals.

As a result, in addition to controlling operating costs, the agency said it will defer certain discretionary capital projects beyond the end of the current 10-year capital plan in 2016. For example:

• The bus garage for the Port Authority Bus Terminal, which would act as a traffic reliever to the Lincoln Tunnel and adjacent Manhattan streets.
• The replacement of LaGuardia Airport's Central Terminal Building and Newark Liberty International Airport's Terminal A have been restricted to planning dollars, allowing these projects to advance while future funding opportunities are explored.
• The replacement of the Lincoln Tunnel helix must be restaged to ensure that its structural integrity is maintained while deferring its complete replacement.

This fiscal discipline allows for enough capital spending in 2010 to keep priority projects moving forward, such as Access to the Region's Core, the modernization of the PATH system and the World Trade Center rebuilding, as well as to continue maintaining agency facilities in a state of good repair.

It is also because of this continued financial discipline in controlling operating expenses and prioritizing capital spending that the 2010 budget calls for no increases in tolls and fares.

Port Authority Chairman Anthony R. Coscia said, "In these tough economic times, we've been forced to make difficult choices to live within our means. Making these choices meets our commitment to spend the public's money wisely and allows us to move forward on the region's most critical infrastructure needs."

Portt Authority Executive Director Chris Ward said, "The Port Authority is not recession-proof and we have been forced to defer some important capital projects due to the historic economic downturn. This budget meets our critical spending needs, but only because we continue to reign in operating expenses and prioritize capital projects, which we will continue to do going forward."

In addition to the $3.1 billion in capital expenditures, the 2010 budget includes $2.5 billion in operating expenses, $689 million for debt service and $44 million for other expenses, such as heavy vehicles and equipment and computer systems, which are deferred and amortized in future periods.

Major highlights of the Port Authority's 2010 operating budget include:

• Zero growth in operating spending in 2010, continuing the fiscal discipline of the last several years. Operating spending growth was also 0 percent in 2009, 0.9 percent in 2008 and 1.1 percent in 2007.
• Headcount reduction of 150 positions, bringing staffing levels for 2010 to 6,977, the lowest in 40 years, compared to 7,127 in 2009.
• Cutting overtime by 20 percent, or $24 million, as a result of efficiencies and new management control strategies.
• Cutting the use of external consultants by 32 percent, or $15 million.
• Closing the Ramada Plaza Hotel at JFK International Airport because of declining aviation activity and a need for substantial renovation. The closing will save the agency $1 million per month.
• An investment of $444 million in operating costs for facility security and $326 million in capital security projects, bringing the Port Authority's total investment in security to $5.2 billion since 9/11.
• A commitment of $21 million toward ongoing conservation and environmental programs to reduce greenhouse gas emissions, a new Clean Trucks Program to finance replacement of older, more polluting trucks at the port facilities, and other regional investments in green projects.

Major highlights of the Port Authority's 2010 capital budget include:

• Continuing development of the World Trade Center site.
• Investing in the continued construction of the ARC Tunnel project.
• Continuing investments in the PATH Modernization Program, including funds to continue to replace the 340-car fleet and to install a new signal system.
• Advancing the JFK Flight Delay Reduction Program, in addition to modernizing Stewart International Airport and planning for the future modernization of Terminal A at Newark Liberty International Airport and the Central Terminal Building at LaGuardia Airport.
• Continuing the 50-foot channel-deepening program in the Port of New York and New Jersey.